Rosatom is suspending the $1.2 billion dollar project at Mkuju River uranium mine test site, Tanzania

Rosatom, the Russian state nuclear corporation, suspends Mkuju River uranium project in Tanzania for at least three years due to depressed uranium market. Rosatom hoped to start construction and mining uranium at Mkuju River project by 2013, but the demand for uranium doesn’t seem to restore earlier than 2020. So, the project will remain suspended until then.

The other reason for putting off the project is the major overhaul of Tanzania’s mining industry commissioned by the local authorities in March of this year. The Tanzanian parliament has approved three bills at once, which aims at providing the state with a greater share of revenue from the country’s natural resources. According to a report, royalties on the export of precious metals and copper will be increased from 4 to 6%, and from 5 to 6% for uranium. The bills also provide the state the right to revise contracts in the field of mining and energy.

As for the project, it has been on the advanced stage of development for some time now, with a key mining license granted back in April 2013. The operator of the project, Uranium One, has current activities at Mkuju River focused on licensing and permitting matters, and value engineering opportunities to optimize the capital and operating costs for open-pit operation. There are still many unresolved issues and problems this project faces, and it can be said that Mkuju River uranium project is going to have a tough time.