Leasing firm wins gold mining tender in Tanzania
| Nov 17th 2021 | 2 min read
Regional leasing firm, Vehicle and Equipment Leasing Limited (VAELL), will be supplying mining equipment to the second largest mine in Tanzania. Machinery worth $20 million (Sh2.2 billion) have been ordered and about $10 million (Sh1.1 billion) has already been delivered.
In the arrangement, the leasing firm will be equipping Star Planet Consultancy (T) Limited (STAPCO) that was awarded the contract to mine gold in the Stateowned Biharamulo mine located in Kagera Region. Tanzania is the fourth-largest gold producer in the continent after South Africa, Ghana and Mali.
The mining industry experienced an estimated 15.3 per cent growth in the first quarter of 2020 compared to 10 per cent growth during the same quarter in the previous year. Some of the equipment leased to the miner includes articulated dumpers that have become popular in many industries because of their unique hauling capabilities. In particular, an articulated dump truck has the power and dependability you need to accomplish the toughest of tasks and the precise handling required to ensure safety and efficiency.
Other equipment that will be supplied in the arrangement include includes excavators, loaders, breakers, tippers, wheel graders, drills and compressors. The contract will run for a period of five years. Bertha Mvati, VAELL’s Managing Director, said: “We aim to support more government initiatives, particularly in the gold mining sector. In our operations in East Africa, we have realized that locals have the capacity and they can do more when supported.
We have collaborated with Tanzanians to develop the capacity as we create more job opportunities for the locals. We believe local content has become of age and we need to empower them so as to uplift the standards of living.” Most Small Medium Enterprises (SMEs) currently prefer to lease owing to the flexibility of leases. In keeping with its focus on flexibility, SMEs are keen to adopt lease solutions to ease their operations.
Leasing increases total capital investment in an economy. Leasing is a complementary form of financing that serves as an alternative to traditional bank lending and increases the ability of companies to source different types of financing for capital investment. “Businesses and governments prefer leasing model which enables them to concentrate on their core business, cut business operational costs and increase efficiency in their day-to-day operations,” said Bertha.
“With this transaction, our group turnover will increase from Sh950 million to approximately Sh1.3 billion which will, in turn, translate to a 40 per cent growth in our revenue. Our gross profit and net profit will grow by 25 per cent annually boosting the internal cash flows, creating Investments Avenue which will, in turn, provide employment within the East Africa Region.”
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