Tanzania's parliament went ahead and passed new laws allowing the government to force mining and energy companies to renegotiate their contracts; Australian mining companies weren't looking forward to it.

The new laws apply to natural resources contracts, sovereignty, and amendments to existing law, and they come after months of wrangling between the government of President John Magufuli and mining companies.  Particularly troubling is the passage that gives the government the right to "expunge" contracts when the mining companies fail "to agree to renegotiate the unconscionable terms or no agreement is reached". 

"Unconscionable terms" is nebulously defined as as anything that is "contrary to good conscience and the enforceability of which jeopardizes the interests of the people" of Tanzania.

 

OreCorp of Subiaco, WA expressed concerns the legislation could potentially have an adverse effect on its Nyanzaga gold project, which was supposed to deliver some 213,000 ounces per year over a 12-year lifespan.  Kibaran of West Perth was also determining the impact on its graphite operation.

West Perth-based graphite developer Walkabout Resources believes its interests in Tanzania reside outside the framework of the new laws.  But executive chairperson Trevor Benson said that the company would continue to engage with the government.  Walkabout recently got environmental approvals on its graphite-in-concentrate mine at the Lindi Jumbo project located in south-east Tanzania.

Canada's Barrick Gold, whose Acacia subsidiary has most of its productive assets in Tanzania, is already feeling the pinch; its share price has halved since March.