IPP Resources

IPP Resources of Tanzania has a double distinction: not only is the company Tanzania’s largest diversified resources group, but also Tanzania’s only wholly indigenous mining and exploration entity.

Tanzania, East Africa’s largest state by land size, is blessed with a Pandora’s Box of natural resources. Gold takes the spotlight, with output increasing tenfold in the 10 years leading up to 2007, when the country’s annual output of 50 tonnes per annum elevated it to the position of Africa’s third largest producer after South Africa and Ghana. The gold rush began in earnest in the mid 1990s, and Tanzania now hosts operations by some of the world’s largest mining companies, including Barrick of Canada, AngloGold Ashanti of South Africa and Australia’s Resolute.

However, the largest diversified resources group in Tanzania, IPP Resources, is not a subsidiary of one of these mining mega-enterprises: it is a wholly-owned Tanzanian group which forms part of one of East Africa’s leading business conglomerates. IPP was founded by the renowned Tanzanian entrepreneur Reginald Mengi in the 1980s. Mengi has also been heavily involved in many social development activities, especially in the areas of health, environmental management and poverty alleviation; and has been a leading advocate of the role of the private sector in the prevention and treatment of HIV/AIDS.

IPP Resources currently holds the country’s largest portfolio of primary mining licences and prospecting licences. Gold is the main focus, but IPP’s operations encompass a broad spectrum of other metals and minerals, including platinum, uranium, coal, bauxite, magnesite, nickel, diamonds and a wide variety of gemstones, including rubies, emeralds and tanzanite (this is the blue/purple variety of the mineral zoisite and is unique to Northern Tanzania). In total, IPP Resources has acquired over 150 concessions, most of which are located in the country’s richest mineralised belts.

The group’s focus is on the acquisition of mineral and metal properties and assets that are deemed to have a high potential for success, then exploring these assets with a view to developing an internal mining capability, potential joint ventures, sale to other companies or the realisation of royalty payments.

Operations are directed from the company’s headquarters at Dar Es Salaam and a small regional office has been established in Mwanza to manage gold interests in the Lake Victoria gold area. IPP Resources acts as a holding company beneath which dedicated subsidiaries operate according to the nature of the activity, such as IPP Gold, IPP Gemstones, IPP Energy and IPP Base Metals.

A tanzanite mine is already operational in the Merelani area, supported by a gemstone cutting centre; and thegroup’s eight exploration teams are involved in numerous projects across the country. The most promising sites to date include the Handeni Gold Project and the Bukwimba Gold Project, which are both at an advanced stage of exploration.

For Dr Reyno Scheepers, IPP Resources’ president and managing director since 2005, it is a source of great pride that an enterprise of this scale is also a truly indigenous operation, wholly owned by Tanzanian nationals. “There are many other indigenous exploration companies, but we are the only one to operate on such a major scale and to have extended our reach into exploration, drilling and actual mining,” he states.

While many foreign operators have become mired in land disputes and clashes with small-scale miners, Scheepers believes the advantages of being a domestic operator are readily apparent. “We have a unique insight into the operating environment and the law. This is a big operational advantage as we work almost exclusively with Tanzanian people and their land interests. When we acquire a licence to explore, there are almost invariably people located there. We understand how local people think, speak their language, share their culture and can much more easily negotiate agreements that are acceptable to all parties,” he comments.

“For example, our tanzanite mine is located in a traditional Massai homeland with an important burial site on the property. We arrived at an amicable settlement giving the Massai access to water across the area that are vital for their cattle and promised we would never disturb the graveyard area. In seven years of operation, we have had no issues or problems at all.”

He explains that each subsidiary has its own operating arm and wherever possible, local contractors are used or IPP will utilise its own exploration capacity. “Sometimes though, it is simply not possible to source the technology we need in-country. For example, local provision of geophysical data is difficult to obtain because the provider of some sophisticated geophysical expertise and equipment is state-owned and simply does not have the resources to meet demand, so we also work with teams from South Africa and Botswana who can give us access to this sort of expertise.”

Scheepers’ future vision for IPP Resourcesis clear. “We want to become the first black wholly-owned Tanzanian gold mining operation. In September 2010, we acquired a majority shareholding through a reverse merger of Douglas Lake Minerals, registered on the New York OTCBB, which added a series of very exciting prospects to our portfolio. It was the first example of such a takeover by a Tanzanian company in this industry, and we achieved very positive feedback from many levels of society for showing how Tanzanians can take control of their own resources and destiny.”

Meanwhile, the Bukwimba gold prospect in the Kahama greenstone belt in the Lake Victoria gold field is one of IPP Resources’ most exciting prospects. It has been systematically explored for a period of approximately five years and to date, drilling at the site has discovered gold values of up to 59.8 grams per ton. Within two or three years, he envisages it can be brought into medium scale production.

Scheepers wants the success of IPP Resourcesto empower and inspire others to follow suit. In Tanzania and many other mineral-rich countries, African people and companies have not traditionally participated in the exploration process, or derived any value from it. He hopes that the lead taken by IPP Resourceswill change this. “Other Tanzanian companies will surely follow our example and, we hope, indigenous operators in other African countries too.” www.ippresources.com