Tanzania: Tanzania's Helium

Last Updated: 11 July 2016
Article by Amne Suedi

While the existence of helium in Tanzania is not novel, not many people know much about element other than it is used in party tricks.

Helium is associated to natural gas. It has been located in several blocks in Tanzania, where there has exploration for oil and gas. Exploration has taken place in Tanzania since the early 50's and continues to date. The Tanzania Petroleum and Development Corporation (TPDC), a government parastatal established in -May 1969, has been an important party to the Production Sharing arrangements signed in Tanzania and continues with oil and gas exploration to date. Helium has been located in few of the blocks where natural gas was discovered, but hardly anything to go to the news about.

The recent discoveries made a few days ago are novel because of the scale of the discovery which amounts to 54 Billion Cubic feet.

Hellium One, a company that not many people knew about until more recently, has been prospecting quietly in the Great Rift Valley in Tanzania. "Project Rukwa" seems to have several parties, the main one being Helium One, registered in Tanzania since September 2015 as an explorer, developer, and producer of high value bulk liquid helium for the international market. To date, this company has applied for and secured 20 Prospecting Licences with a further two applications submitted. All PLs are held solely by the Helium One, which has exclusive rights for another 9 years before they are converted into MLs and mining begins

Since the discoveries, Minister of Energy and Minerals Professor Muhongo made a statement hailing the discoveries of Helium. Netherland Sewell and Associates Incorporated (NSAI), independent experts, have publicly estimated an "Unrisked Prospective Recoverable Helium Resource (P50)" of 54.2 billion standard cubic feet. Helium occurs in 27 leads, defined by 2D seismic and is supported by data from two legacy exploration wells. Further, Oxford University's Department of Earth Sciences had conducted a geochemical analysis of the surface gas emanations and confirmed helium migration within the basin through their recent geochemical analysis of surface gas emanations (cf. company website of Helium One for more information). Helium One has declared that it also planned an extensive work programme to convert this resource into reserves and define additional prospects.

This discovery makes Tanzania a potential global player when it comes to trading Helium in the future.

The main use of helium is in medical appliances and military technology, space technology, light aircraft fuel. It is also used in nuclear reactors, welding and magnet productions for laboratories. Helium doesn't form compounds easily with other elements. It is also very stable and its stability and non-reactive nature makes it the perfect tool for handling unstable materials. It is the only gas that can reduce temperature and be an effective cooler. 

The global market for helium is estimated at USD 6 billion and it is growing. The USA supplies 40 percent of global consumption. Other principal actors are Qatar and Algeria. It is estimated that by the year 2021, the USA will not be supplying the open market and that the remaining reserves will be for strict federal usage only. The USA regulates its helium usage through price regulated auctions and storage in reserves. This translates into an opportunity for Tanzania to become a new market player in the helium gas industry. The current biggest consumers of helium in Tanzania are Industries, the military, hospitals and TPDC.

In order for this discovery to be beneficial to Tanzania, work needs to be done to align all strategies so as to find a "win -win" situation for everyone. Currently, the Government of Tanzania's interests will be safeguarded by the Mineral Policy (2009) and other relevant policies and laws available for regulating the mining industry. Should this materialize into a large scale industrial project, the Land Policy will also be applied as well as land legislations when it comes to acquiring land or evacuating people from the land in order to develop the project. Tanzania has several frameworks already in place through the Mining Act 2010 and its regulations. Additionally, the Environmental Management Act and its regulations will be applied to the mining project.

The Government of Tanzania may enter into a Development Agreement for the mining of Helium and shall be subject to the provisions in the Mining Act and its regulations. If the project will require a capital expenditure of more than USD 100,000,000 and that the holder of the mining rights, Helium One are deemed to have the financial and technical capacity to undertake a large scale investment. The government stands to win revenues in terms of taxes, royalties as well as free carried interest.

Tanzania will have to guarantee fiscal stability to the investor /developer in the Mining Development Agreement. For example, the Finance Act 2016 contains major changes in sectors such as tourism, where the introduction of VAT has already affected the cash flows of companies in this sector. Helium One or any other investor would insist on a stabilization clause so as to avoid this kind of situation and negative impact in their industry. The Government of Tanzania must undertake and guarantee that there will be no major fiscal changes detrimental to the investors through the lifecycle of the project.

There is a big market opportunity for Tanzanians producing goods and services since these discoveries can create employment and businesses to cater for the entire chain of the product. The Mineral Policy as well as the Mining Act guarantees the use of local products and services. Another benefit will be from infrastructure development, which will not only support the production and distribution of helium, but also by extension the communities.

In a country where the mining industry has not had a significant and powerful impact on Tanzania, one hopes that the production of helium will be different. However, the reality is that helium is non-renewable, it is not as abundant as oil and gas, and the market is relatively small compared to gas or other resources.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions