Dar es Salaam, Tanzania — ESI-AFRICA.COM — 19 January 2011 – China’s Sichuan Hongda Company Limited is to invest a total of US$3 billion in a coal-fired power plant and a coal mine to supply the facility, as well as an iron ore mine in Tanzania, according to the Tanzanian state-run National Development Corporation (NDC).
Sichuan Hongda is in advanced talks with senior Tanzanian government officials to sign contracts for the projects, after beating bids from more than 20 international companies including Rio Tinto and BHP Billiton.
“The Chinese firm was picked from a long list of bidders as the preferred investor after winning an international bidding process. We are now negotiating final details before a contract can be signed,” NDC board chairman Chrisant Mzindakaya told Reuters here.
China has invested billions of dollars in Africa in the production of minerals and oil, hoping to secure the resources it needs to fuel its booming economy.
Tanzania “’ Africa’s fourth-largest gold producer, and with reserves of uranium, nickel and coal “’ passed a new mining law last year requiring the government to own stakes in future mining projects and mining companies to list on the Dar es Salaam Stock Exchange.
The investment involves construction of the Mchuchuma integrated coal mine and thermal power station, and an iron ore mine in Liganga. NDC said the projects would be implemented in a joint venture with the Chinese investors under a public-private partnership.
Financial details of the investment projects are yet to be confirmed “’ senior Sichuan Hongda officials are in Dar es Salaam for negotiations with their Tanzanian counterparts to finalise the deal.
“Our aim is to have the contract signed next month in order to pave the way for the actual implementation of the projects,” NDC managing director Gideon Nassari told reporters.
Mchuchuma, located 800km west of Dar es Salaam, has identified reserves of 536Mt of coal. The investment in the coal mine would also involve construction of a 600MW coal-fired power plant.
NDC said early studies indicated that the Liganga area was rich in iron, vanadium and titanium minerals. Reserves are estimated to be between 200 and 1 200Mt, with 45Mt already proven through drilling.