Tanzanian Royalty Exploration (TSX:TNX,AMEX:TRX), a long-time explorer of Tanzania, is betting that the country's Kabanga belt, which is rich in nickel, cobalt and platinum group elements, could soon become a major supplier to metal-hungry Asian nations.
At the close of 2012, the historically gold-focused explorer announced plans to spin off Northwestern Basemetals Company to explore for nickel-related elements at Kabanga. Tanzanian Royalty already holds numerous mineral concessions in this part of the country. Aside from the geological prospectivity of the area, a company press release cites the ease of shipping metal from Tanzania to Asian markets as one of its major reasons for the strategic move. As CEO Jim Sinclair stated, “Tanzania looks right across the Indian Ocean at the growing markets of India and China … If current trends continue, India and China will grow into membership of the three largest markets on the planet for these products.” China looks to East Africa Northwestern Basemetals' share roster seems to back up the assertion that Asia is interested in Tanzania. China's Beijing Songshanheli Mining Investment will take a 10-percent stake in the new company, with Tanzania's national mining company owning 15 percent and Tanzanian Royalty anchoring the remaining 75 percent. Asia's drive to acquire projects in the Indian Ocean sphere mirrors recent dynamics in the coal sector, which has seen projects in places like Mozambique and Madagascar bought out by Indian, Chinese and even Thai firms over the last few years. For example, in September, India's Jindal Steel (BSE:532286) purchased TSX-listed Botswana coal developer CIC Energy (TSX:ELC). Canada's Pan African Mining was previously bought out by Asia Thai Mining for its coal projects in Madagascar. Barrick to ship first Tanzanian nickel The interest in Tanzanian base metals comes as Barrick Gold (TSX:ABX,NYSE:ABX) and Xstrata (LSE:XTA) prepare to boot up the country's first major nickel mine at Kabanga.