by Ben Taylor
Significant breakthrough in helium explorations
Helium One Global, the firm licensed for helium exploration in southwest Tanzania has discovered 4.7% helium concentrations at Rukwa Rift Basin. The company described the high concentrations as a big milestone towards achieving commerciality at the earliest opportunity.
“When performing the Basement Drilling Stem Testing (DST), high concentrations of helium began to flow to the surface,” read the statement from the company. The statement went on to add that the quantity of helium increases with depth.
Helium One Global’s Chief Executive Officer (CEO), Lorna Blaisse said that she was delighted with the findings. She added that she appreciated all collaborators including the Ministry of Minerals and the Mining Commission of Tanzania among others involved in bringing the project to the point of success.
Commenting on the findings, Assistant Commission in the Ministry of Minerals, Mr Francis Mihayo said the positive results from the exploration strengthen hope for helium extraction in Tanzania. He said the discovery of helium stands as the basis for further exploration, which will lead into a feasibility study and finally exploitation.
University of Dar es Salaam’s Head of School of Mines and Geosciences, Dr Elisante Mshiu, also the President of the Tanzania Geological Society (TGS), noted that concentration of 4.7% helium signals existence of huge volumes of the gas. “Concentration of 4.7 per cent is massive”, he said. He said further exploration will be undertaken at the area to estimate the actual volume of helium available, and expressed his optimism that Tanzania can become the global leading supplier of helium upon effective exploitation of the deposits.
Today, helium is produced primarily in just four countries including in the USA, Qatar, Algeria and Russia. It has multiple essential uses including in manufacturing of medical equipment.
Helium One Global holds prospecting licences totalling more than 2,965 square km across three distinct project areas which are Rukwa, Balangida, and Eyasi located within rift basins in the north and southwest of Tanzania.
The Company’s flagship Rukwa Project is located within the Rukwa Rift Basin covering 1,900 square km in the south-west.
First turbine at Nyerere Hydropower Plant (Stiegler’s Gorge) switched on
In February, Tanzania switched on the first turbine of a new hydroelectric plant at Steigler’s Gorge on the Rufiji river. This was announced by Doto Biteko, energy minister and deputy prime minister, while visiting the 2,115 megawatt (MW) Julius Nyerere Hydropower Plant (JNHPP). He said that the first turbine was now contributing up to 235 MW of power to the grid.
The project has been highly controversial. Before construction began in 2019, conservationists warned that building the dam could affect wildlife and their habitats as well as agricultural productivity. The site is located within the Selous Game Reserve, one of the largest protected areas in Africa, harbouring one of the most significant concentrations of animals including elephant, black rhino and cheetah and a large variety of habitats, according to United Nations agency UNESCO.
On the positive side, the plant is expected to provide a major boost to the country’s electricity generation capacity. Many areas have recently been suffering from extended power shortages, and load shedding has been estimated as costing between 5-7% of Tanzania’s GDP. Further, it will achieve this at a much lower cost than existing sources: an estimated 4.5 cents per kilowatt-hour.
Nevertheless, in addition to critics of the project’s impact on the environment and livelihoods, analysts have suggested that had the same level of investment gone into alternatives such as geothermal, solar and wind, the country could have generated double the output of JNHPP. It is impossible to make these calculations with any certainty, however, as little reliable information has been made public about the construction cost. The official price tag is USD $2.9 billion, but experts claim this is unrealistic. Competing estimates range from $3.9 billion to $9.8 billion.
LNG project delayed further
Negotiations for the development of Tanzania’s $42 billion liquefied natural gas export plant have been delayed by proposed government changes to a financial agreement reached last year, according to a government spokesperson and sources within the companies involved in the project.
The government and investors announced in May 2023 that they had completed negotiations on the project to unlock Tanzania’s vast offshore gas resources. The government said at the time that the cabinet would review the agreements the following month.
Energy Minister Doto Biteko told parliament in April 2024 that the attorney general and other government institutions had provided feedback on the deals and negotiations were expected to conclude during the 2024/25 fiscal year.
A source from one of the investors told Reuters news agency that the delay related to changes that Biteko proposed to the host government agreement after he became energy minister last August. Biteko also serves as deputy prime minister.
The source, who asked not to be identified, said Biteko and his team came back to investors with a “rather interesting amendment to the HGA which completely blew the project economics out of the water”. The source did not provide details but said that progressing on the project would be “definitely not quick” and that the minister’s talk of completing negotiations in the coming fiscal year was “optimistic”.
Meanwhile, “a source privy to the matter” told The Citizen newspaper that the government had concerns about several aspects of the proposed agreement. The source said the government was weighing a proposal by the companies that proceeds from the planned $42 billion project be banked in foreign financial institutions, as well as a proposal that the companies should be compensated by the government in case that natural gas prices drop in the international market in the future.
Contacted for comment by The Citizen, Biteko said that the government and companies were “still negotiating to find common ground.”
In March, the United States government warned Tanzania of a likely exodus of investors if delays continue. US Deputy Assistant Secretary of State, Joy Basu, told The EastAfrican newspaper that companies such as Exxon Mobil that have been pushing the deal with Tanzanian authorities had reached a point where they were now “willing to walk away.”
“There is LNG in lots of places around the world now, and for Tanzania the window for this particular investment is closing fast. Such windows do not remain open forever,” said Ms Basu whose portfolio in the Joe Biden administration includes overseeing economic and regional affairs in Sub-Saharan Africa.
Exxon Mobil, based in Houston, Texas, is one of several multinational firms that have stakes in the LNG project. Britain’s Shell and Norway’s Equinor, have been earmarked as joint main operators of the project, with Exxon Mobil, Pavilion Energy (Singapore), Medco Energi (Indonesia) and the state-owned Tanzania Petroleum Development Corporation (TPDC) as partners.
Barrick settles legal claims relating to North Mara gold mine
Barrick TZ Limited and North Mara Gold Mine Limited, local subsidiaries of Barrick Gold, announced in March that they have reached a settlement of the claims by Tanzanian residents against them in their UK legal action. They said that the settlement was reached “with no admission of liability on their part,” but provided no further details about the settlement’s content.
Fourteen Tanzanian citizens made claims against Barrick TZ and North Mara Gold Mine Limited for alleged human rights incidents between 2014 and September 2019. The Tanzanians alleged that the companies were legally responsible for deaths and injuries caused by the Tanzania police during security operations on or around the mine. The mine had a memorandum of understanding with the police for security under which it paid, housed and equipped the police.
Barrick TZ Limited and North Mara Gold Mine Limited denied the allegations.
The company’s decision to settle comes over four years after the proceedings were brought forward in the UK.
RAID, a UK-based NGO that exposes corporate wrongdoing, environmental harm, and human rights abuse, has repeatedly raised concerns about human rights violations at the North Mara mine.
In November 2022 it published findings showing the reported death toll at the North Mara mine had risen to at least 77, along with 304 wounded, by police responsible for mine security, most of which occurred after Barrick acquired the mine in 2006. This would rank the North Mara mine as one of the deadliest industrial mines in Africa in terms of security-related violence.
RAID Executive Director Anneke Van Woudenberg said after the settlement was announced that she “welcomes any settlement that brings relief to the claimants after so many years.”
Two further legal actions alleging killings and injuries by security forces at Barrick’s North Mara mine remain ongoing – one in the Canadian courts against Barrick Gold and one in the UK against London Bullion Market Association (LBMA). The latter case alleges that the LBMA is liable in respect of the deaths of two artisanal miners at the mine in July and December 2019 because it certifies gold from the mine as responsibly sourced and free from serious human rights abuses. The LBMA says the claim has no merit.
Zanzibar launches first oil and gas licensing round
The President of Zanzibar, Dr Hussein Ali Mwinyi, on March 20 commissioned the first round auction of oil and gas blocks to investors.
Dr Mwinyi said the government had reviewed the legal and contractual frameworks around oil and natural gas before launching the round, to attract investors into the hydrocarbon industry.
“We made the review to create a friendly investment environment in the oil and gas sector here in Zanzibar because companies need to invest in a safe place where they can be profitable,” he said.
The government of Zanzibar has embarked on the “blue economy” policy, which includes oil and gas among the main priority areas.
“The government believes that the blue economy has many opportunities to promote economic development plans that aim at reducing poverty and creating employment opportunities,” said President Mwinyi.
He said that the exploration activities for oil and gas in Zanzibar started in the 1950s with the British Petroleum (BP) Company, in collaboration with Shell, conducting detailed investigations and drilling two wells on both sides of Unguja and Pemba, which were completed in 1963. After the union of Tanganyika and Zanzibar in 1964, oil and gas exploration activities were under the government of the United Republic of Tanzania.
The Minister for Blue Economy and Fisheries in Zanzibar, Mr Shaaban Ali Othman, said the launch covered eight blocks out of the 12 existing blocks. “We are waiting for applications from investors for the eight blocks that are up for grabs in the next 10 years,” he said, welcoming investors.
He said both the laws governing the sector and the production sharing agreement (PSA) model were reviewed to facilitate investment.
The chief executive officer of the Zanzibar Petroleum Development Corporation (ZPDC), Mr Mikidadi Alli Rashid, said the investors will sign the PSA model with the minister and ZPDC to officially start oil and gas exploration and drilling.
He also urged residents to be patient, as oil and gas exploration and potential development take time. (The Citizen)