July 1, 2011 / 2:36 PM / 8 years ago

Tanzania eyes $400 mln uranium mine in 3 yrs

* Govt targets $250 mln annual turnover from mine

* Australian firm to build project in game reserve

By Fumbuka Ng’wanakilala

DAR ES SALAAM, July 1 (Reuters) - Australian-based miner, Mantra Resources plans to build a $400 million uranium mine in Tanzania within the next three years, a cabinet minister in the east African country said on Friday.

The government will allocate 34,532 hectares of land inside a world heritage game reserve to the Australian uranium miner for the project, Tanzania’s Natural Resources and Tourism Minister Ezekiel Maige said.

Tanzania has at least 54 million pounds of uranium oxide deposits and expects to start mining some of the minerals.

“Mantra Tanzania Limited, an affiliate of Mantra Resources of Australia, plans to construct the uranium mine in the Selous Game Reserve,” he told Reuters.

The project will have an annual gross turnover averaging $250 million for 15 years, he said.

Tanzania passed a new mining law last year that increases royalties paid on minerals and requires a government shareholding in future mining projects.

Maige said the company was now seeking clearance to build the mine in the game reserve, which is a world heritage site.

The minister said Tanzania has sought approval from U.N. world heritage body UNESCO to re-demarcate the territory of the Selous Game Reserve, one of the world’s largest wildlife sanctuaries, to allow the uranium mine to be set up.

“Tanzanian laws allow high value natural resources such as oil, gas and uranium to be mined in game reserves. But since the Selous is a world heritage site, we have officially notified UNESCO about our plans,” he said.

“The proposed land to be removed from the Selous to pave the way for the mine is just 0.69 percent of the total land surface of the game reserve. We expect to get final UNESCO clearance on the project by June 2012.”

Maige said Selous would benefit from an expected income of $5 million in annual fees from the uranium mine against the game reserve’s current annual earnings of around $500,000, which would be used in the conservation of the wildlife population.

(Editing by Keiron Henderson)

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