Atomic lays firm foundations in Tanzania

18/02/2009 - 22:00

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Extensive, untouched coal reserves and increasing demand for power generation makes Tanzania an attractive prospect for WA miners.

Atomic lays firm foundations in Tanzania
DIVIDENDS: David Holden is confident his relationship with the Tanzanian government will continue to pay off for his company. Photo: Grant Currall

THE establishment of strong relationships with the government of Tanzania has given one Western Australian mineral exploration company the inside running in accessing the country's vast coal reserves and the potentially lucrative opportunity to develop power stations for the emerging African nation.

West Perth-based Atomic Resources was primarily involved with uranium in WA and Tanzania, and it was during discussions with the Tanzanian government regarding yellowcake deposits that coal-mining opportunities became apparent.

However, progressing from an initial invitation to mine Tanzania's coal reserves to Atomic's first drilling results, which were announced last week, has been a delicate and sensitive transition for both parties.

Atomic's executive director, David Holden, believes his frank discussions with government officials and the skills of his organisation were vital in securing the deal.

"Saying things could be done smarter and better and [that we] we were serious and genuine about what we were trying to achieve in the country ... I think they liked that," Mr Holden told WA Business News.

"And I guess they were also impressed with the mining expertise and background.

"In a way we are exporting our mining and business skills to somewhere like Tanzania where they desperately need it."

But Atomic needed to be sensitive in light of dealing with a developing nation such as Tanzania.

"They've had a number of other companies that have come in there with promises and ideas and disappeared with lots of local money and never came back, so they were pretty shell-shocked and gun-shy about what was going on," Mr Holden said.

In contrast to some of the practices of other companies in the region, Atomic took a pro-active approach to building strong relations with the government and opposition in Tanzania. About a year ago, the company donated $15,000 worth of textbooks and scientific equipment to schools in areas where it had identified coal deposits.

This largesse has left the door open for Atomic to partner with the Tanzanian government on future, more lucrative opportunities, such as developing the country's electricity supply through coal-fired power stations.

"I think only 7 per cent of the Tanzanian people have reticulated power," Mr Holden said.

"They are probably one to one-point-five gigawatts short of power and that's not even taking into account the growth that's going on at the moment, so they are so far behind the eight-ball with power its just not funny."

To enhance the chances of Atomic's involvement in Tanzania's future power generation, Mr Holden is utilising the expertise of a Canadian project manager experienced in building power stations in South America and Africa.

"He's liaising with the Tanzanian government with the intention of helping them decide how they are going to put the power station in, how they are going to pay for it and what size it's going to be based around our coal mine," Mr Holden said.

"That's what Collie is when you think about it and we're kind of replicating that [model] that's done pretty well for Wesfarmers, Griffin, Western Power.

"Taking that template and that idea and those skills and things we know about what works and what doesn't work here ... we're going over there to say 'this is how you do it' and we've got the best example of how a moderate sized coal field with a power station next to it can work."

Mr Holden believes this approach, and the existing relationships he's established, will ensure Atomic's ongoing involvement in Tanzania.

 

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