MIGA issued a guarantee totaling $115.8 million to Société Générale S.A. as an agent for a syndicate of international banks for their nonshareholder loan investment to Kahama Mining Corporation Limited (KMCL), an indirect wholly-owned subsidiary of Barrick Gold Corporation. A portion of MIGA's guarantee will be reinsured by private insurers. The MIGA guarantee will cover the investment against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project involves establishing and operating a mill complex under a mining and development license from the Government of Tanzania to mine underground gold, silver, and copper. KMCL is expected to operate at a rate of 2,500 tonnes per day, resulting in gold production of 400,000 ounces per year.
KMCL will hire approximately 1,500 people during construction and create more than 1,000 new jobs to operate the facilities. Under agreement with the government, the project enterprise is required to prepare and carry out an effective training and employment program for its Tanzanian employees in each phase and at all levels of operation. The project will pay approximately $75 million in taxes, royalties and duties to the government during the initial 15 years and procure some $10 million in local goods and services per year.
The investment will contribute to the development of the country's infrastructure, as the establishment and operation of the plant will require constructing roads, and power transmission and water pipeline facilities. Communities surrounding the plant will benefit indirectly through improved access to potable water drawn from the water pipeline, availability of electrical power to local households, and the development of roads.