Katewaka project stalled over fee dispute

NJOMBE: THE Katewaka coal mining project in Ludewa, Njombe region, has been delayed due to a disagreement between the investor and a government institution over a management fee.

The dispute, between the National Development Corporation (NDC) and MM Steel Resources, concerns a 3 per cent management fee, payable once production starts. This is standard practice in the mining industry.

Industry and Trade Minister Dr Suleiman Jafo has given the NDC and MM Steel three weeks to resolve the issue.

“If the agreement is not reached within the specified period, the government will not hesitate to take decisive action, including seeking a new investor to expedite the project’s progress,” Dr Jafo said when touring the project on Tuesday.

He said the ongoing delay in reaching an agreement is holding back the potential benefits, including job creation, industrial development and economic growth, for both the people of Nkomang’ombe Village in Ludewa and the nation as a whole.

The Katewaka contains 100 million tonnes of coal which will last for 100 years while generating 1,000 jobs, including 250 direct employments.

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The Liganga and Mchuchuma Projects Officer, Eng Wallu Kapaya, said that the delays in the project’s launch were caused by slow negotiations between the investor and NDC, particularly over a 3.0 per cent management fee.

“This fee is paid once production begins, in line with standard mining industry practices,” Eng Kapaya said.

The NDC Director of Value Addition Department, Ms Esther Mwaigomole, said upon completion the project is expected to provide direct employment to 6,000 as well as indirect support to 24,000 others through the economic supply chain.

The Ludewa Member of Parliament, Mr Joseph Kamonga, said that the successful completion of the Katewaka project would mark a significant step in transforming the economy of Ludewa and surrounding areas.

Njombe Acting Regional Commissioner, Mr Juma Sweda said that both projects, Mchuchuma and Katewaka will significantly impact the district economy.