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A TanzaniteOne miner holding a recently extracted piece of tanzanite rough.



  Richland Resources reinforcing Tanzanian credentials to protect TanzaniteOne's status


February 12, 2012


Richland Resources Limited, the owner of the TanzaniteOne mining company, appears set to offer 20 percent of its shares to the public through an Initial Public Offer (IPO) at the Dar es Salaam Stock Exchange (DSE) in April. The move evidently is related to company's bid to renew TanzaniteOne's mining license in the northeast of the country, which expires in March.

Foreign-dominated companies in the Tanzanian mining sector are currently scrambling to increase local ownership, in order to comply with new criteria set by the country's government. Tanzania's recently passed Mining Act 2010 requires foreign mining companies to have more substantial local ownership. In the gemstone mining sector the figure will rise as high as 50 percent.

The law may not affect Richland Resources, however. According to Denis Maringo, a lawyer specializing in mining issues, this is because new requirements only apply to companies that began operations after the new law was enacted.

The company's also unveiled plans on expansion that include the establishment of a new local plant for cutting and polishing the tanzanite under the supervision of Urafiki Gemstone Limited. It also has promised to support in the mining area the construction of a secondary school, a community center, the renovation of a medical clinic and dispensary, the expansion of a primary school and to provide water to 2,000 villagers and more than 5,000 heads of cattle.

TanzaniteOne has been operating in block "C" of the tanzanite mining site in the Mererani hills, about 60 kilometers southeast of Arusha, since 2004. It purchased its operations from the South African mining company, African Gem Resources (AFGEM), seven years ago

In Tanzania, TanzaniteOne is considered to be a foreign investment firm that enjoys investment guarantees under the Tanzania Investment Act, no. 26 of 1997. The act, among other things, provides a guarantee of a predictable investment climate.

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