In a potential blow for the African-focused gold group Perseus Mining, its newly acquired gold mining prospect in Tanzania faces an obstacle from a new rule that could see a 20% cut in free market sales of the precious metal.
There will be no room for negotiation because the new rule comes into force tomorrow, October 1. According to media reports, there’s no word on prices, rates, or other terms—just a demand to be ready to start selling 20% of production to the state.
Perseus acquired the Nyanzaga gold project in Tanzania when it completed the $258 million takeover of OreCorp. The company intends to release the project's first mineral resource and ore reserve estimates by the end of this year.
Drilling to enhance Perseus’s understanding of the Nyanzaga Mineral Resources is planned, along with studies across the project to optimize engineering and capital cost estimates.
Perseus expects a Final Investment Decision (FID) for the Nyanzaga Gold Project by year-end, enabling project development to commence in the new year, with the aim of first gold production during the first quarter of 2027.
The prospect is 80% owned by Perseus and 20% by Tanzania. The estimated cost could be $450 million to $500 million or more, with final figures to be determined next year.
While Perseus faces potential challenges, existing miners like Barrick Gold and AngloGold Ashanti are already feeling the impact. Barrick Gold’s outspoken CEO, Mark Bristow, is likely to voice his concerns if he disagrees with the new rule.
Late last week, Tanzania's mining regulator ordered all mining firms and traders exporting gold to allocate at least 20% of the metal for sale to the central bank, part of an effort to diversify its foreign reserves. The Central Bank of Tanzania (BoT) began buying gold from local traders and miners in the financial year ending June 30 to bolster its reserves amid depreciation pressure on the local currency, the shilling.
The central bank purchased 418 kg of gold to boost its reserves and intends to raise those purchases to 6 tonnes in the current financial year—worth around $463 million at current prices.
This move aligns Tanzania with a growing list of central banks in the developing world, led by China, Turkey, and India, that are buying gold.
Reuters reports that the Tanzania Mining Commission stated late on Friday that the directive will take effect tomorrow (October 1) as part of a newly enacted mining law.
Miners and traders, according to the statement, will be required to submit the reserved gold to two major mineral refineries: Eye of Africa Ltd in the capital, Dodoma, and Mwanza Precious Metals Refinery Ltd, located in the lake city of Mwanza in northern Tanzania.
"All payments will be made according to the Bank of Tanzania arrangements," the statement said, without providing details on prices or rates.
