State, TanzaniteOne in share purchase talks

TanzaniteOne, a subsidiary of Richland Resources are still negotiating with the government on the best way to sell 50 per cent stock in accordance with the new Mining Act.
 
The government said it would acquire 50 per cent shares in the company through the State Mining Company (STAMICO) as condition for renewing the company’s mining licence. 

TanzaniteOne Executive Chairman, Ambassador Ami Mpungwe said they were in the middle of negotiations with the government on the sale amount and modalities for disposal.

“This is a listed company, you cannot just get hold of shares without thinking of the shareholders,” Mr Mpungwe told the ‘Daily News’ when commenting on the government stance. “Some of our shareholders are institutional, like pension funds. 

"You cannot just take their interest by a simple announcement,” the former ambassador added.

TanzaniteOne is listed at the London Stock Exchange through its parent company, Richland Resources, which also has interests in sapphire mining in Australia. 

The company said they want the discussion to be sorted out without delay and amicably as the longer it takes the “higher the certainty” in business circles.”

The new Mining Act of 2010, stipulates that gemstone mining, will be carried out exclusively by Tanzanians, except when it requires heavy investments and sophisticated technology.

The Act, however, also provides an opportunity for existing firms to list on the Dar es Salaam Stock Exchange (DSE) and float 50 per cent of their shares to Tanzanians in order for their gemstone mining licences to be renewed. 

“We wanted to offload our shares at DSE since 2004, but we could not sail through…we tried again last year, but capital market (and securities authority) failed us,” Mr Mpungwe said.

Early this year, the firm, mining tanzanite gemstones in the northern part of the country, announced plans to list on DSE last April in a bid to comply with conditions for licence renewal. “We still want to offload our shares at DSE,” he emphasized.

Richland Resources, which owns TanzaniteOne, says the company plans to float 20 per cent of its shares to the public through an Initial Public Offer (IPO) at the Dar bourse.

The deputy Minister for Energy and Minerals, Mr Stephen Masele, told reporters that the government would not renew TanzaniteOne licence, which expired last August, until the company sold 50 per cent of its stake to the government and sorted out other management issues. 

Recently CMSA said the firm has yet to present a formal application for listing at the Dar bourse.
Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza
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