Nyanzaga gold project stalled amid ongoing talks with government
The Nyanzaga gold project is located in the Lake Victoria Goldfields of Tanzania. Image courtesy of OreCorp.
What you need to know:
- The government insists that negotiations are a part of a common procedure in investments projects of that scale to ensure that the country gets its fair share of revenue from its natural resources
Dar es Salaam. Australia’s Perseus Mining, behind Tanzania’s Nyanzaga Gold Project, has announced that it has yet to make a Final Investment Decision (FID) for the project, as negotiations with the Tanzanian government continue.
The company, which also operates in Ghana and Côte d’Ivoire, reported on Wednesday that talks to clarify or modify key clauses within the framework agreement have yet to reach completion, despite being in advanced stages.
“Finalisation of fiscal terms is a critical pre-requisite for taking a FID to advance to the stage of full development of the Nyanzaga Gold Mine,” Perseus Mining stated.
However, the Tanzanian government maintains that the negotiations are standard procedure for such investments.
Speaking to The Citizen on Wednesday, the Permanent Secretary in the Ministry of Minerals, Mr Yahya Samamba, confirmed that the review of key aspects, including tax issues, aims to ensure Tanzania secures a fair share of returns from the project.
“It is a completely normal process,” Samamba said, adding that while it’s difficult to predict when the discussions will conclude, both sides aim to reach a mutually beneficial agreement.
The government, he emphasized, is committed to concluding the negotiations swiftly to allow Tanzanians to benefit from the project and to secure national tax revenues for development.
In the meantime, Perseus Mining has continued preparations for the project’s advancement, including implementing the Resettlement Action Plan (RAP), preparing early construction work and conducting additional feasibility studies.
The company also noted that its plans for the development of Nyanzaga remain on track for a FID in the second half of 2025, with an expected production start in early 2027.
“Delay in finalising fiscal terms has impacted the finalisation of the Nyanzaga Definitive Feasibility Study (DFS) and Feed Study, but at this stage, the schedule for producing first gold from Nyanzaga in early 2027 has not been impacted,” Perseus Mining said.
However, industry stakeholders have voiced concerns over the delays, highlighting the broader implications, including the potential loss of government revenue and missed job opportunities for local communities and service-providing companies.
One anonymous mining stakeholder warned that delays could dissuade future investors, despite ongoing reforms in Tanzania’s mining sector.
The project, which is set to produce an estimated 2.5 million ounces of gold over a 10.7-year lifespan, is expected to create approximately 1,000 permanent jobs once operational.
However, only 300 temporary jobs will be available during the construction phase, leading to concerns about local employment opportunities during the waiting period.
The Nyanzaga Gold Project, located 60km southwest of Mwanza, is poised to become the first large-scale mining development of its kind in the region.
With gold prices reaching $2,700 per ounce, the delay in the project’s progress means both the Tanzanian government and Perseus Mining are missing out on substantial revenue.
