Richland Resources (LON:RLD) has confirmed talks are ongoing between subsidiary Tanzanite One and the Tanzanian government over a joint venture agreement.
The talks are reported to concern the transfer of a 50% stake to state mining company (STAMICO) as a condition of renewing Tanzanite One’s licence.
Richland said today that the potential joint venture and shareholding currently under discussion related to the ownership structure of the mining licence covering Block C, Merelani - Tanzanite One's deposit.
Bernard Olivier, Richland’s chief executive, said: "We are confident of reaching mutually beneficial terms for a joint venture partnership with the government of Tanzania to enable the company to continue and even grow its mining operations in Tanzania.
"The partnership will, amongst other things, ensure further assistance from the government regarding the challenges that TML [Tanzanite One] has faced, including illegal mining and the development and regulation of the tanzanite industry."
Tanzanite One has been hit recently by an increase in illegal mining in the blocks neighbouring Block C, which are mined largely by artisanal miners and who have been pushing into Tanzanite One’s licence area.
Richland said the Minister for Energy and Minerals held public meetings in Arusha on 23 and 24 November with all stakeholders in the tanzanite industry, to address the various issues plaguing the industry, including, illegal mining and smuggling.
Earlier this month, Richland said it was very concerned about the situation in Tanzania and that it needed help to tackle the problem because of the aggressiveness of the illegal miners. It called for police assistance and a task force to be set up.
The company is also embroiled in a dispute over royalties with the mining ministry in Tanzania, which claims it is owed an additional US$1.73mln for the period 2004-2008.