TanzaniteOne to list IPO on Dar bourse in bid to renew licence

TanzaniteOne — a firm mining tanzanite gemstones in the northern part of the country — has announced it will list on the Dar es Salaam Stock Exchange in April in a bid to comply with set conditions for its operating licence to be renewed.

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

The Act was set up to protect the country’s resources from exploitation by foreign-owned mining firms, which were repatriating their profits.

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

The chairman of TanzaniteOne, Ambassador Ami Mpungwe, says the listing of TanzaniteOne will be remarkable in its nature and also in its objective to provide local ownership to Tanzanians in a transparent and equal manner.

Unlike the mining giant, African Barrick Gold (ABG), which only cross-listed its shares at the DSE in December, 2011, TanzaniteOne will be the pioneer mining firm to float its shares through an Initial Public Offer (IPO) by April.

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

“We will be able to reveal all the details of the IPO when we are finally cleared by the Capital Markets and Securities Authority, and the DSE,” said Farai Manyemba, Richland Resources Finance Director.

Although TanzaniteOne is listed at the London Stock Exchange, Mr Manyemba is optimistic that local investors will be receptive to the IPO in order to own a stake in the largest gemstone mining firm.  

“With cross-listing you wait for the share owners to sell, but with an IPO, local investors have a huge opportunity to buy and sell shares,” he said.

TanzaniteOne’s corporate governance manager and company secretary, Lusekelo Mwakalukwa told The East African in an earlier interview that his firm had submitted an application for the government to renew their license.   

Controversy

An eight square kilometre Block ‘C’ Tanzanite site — which the firm purchased for its operations from the giant South African mining company African Gem Resources (AFGEM) seven years ago — has been the epicentre of long running confrontations between TanzaniteOne and small scale miners.

A majority of local miners, who were evicted to pave the way for the flamboyant foreign mining firm two decades ago, still believe that they were robbed of a rich tanzanite deposit at Mererani hills.

The small scale miners have been trying to get the company to relocate to a different site but to no avail.  Aware of the new law, the miners and some activists are currently forging a united front, and trying to stop the firm’s request for their licence to be renewed.
The lobbying movement is targeting influential people like spiritual leaders, policy makers and the government to join forces in blocking TanzaniteOne’s application.