President Samia urges foreign miners to invest big in Tanzania’s untapped mining industry.
The move is part of Tanzania’s bold plan to create jobs, boost domestic revenue and attract Foreign Direct Investment.
Tanzania has vast deposits of cobalt, copper and rare earth elements, among other critical minerals, with high demand globally.
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Tanzania has reasserted its commitment to developing its mining sector and improving its investment environment to attract more Foreign Direct Investment. President Samia Suluhu Hassan affirmed this at the 2023 Tanzania Mining & Investment Forum (TMIF) in Dar es Salaam.
The two-day event took place from the 25th to the 26th of October at the Julius Nyerere International Convention Centre, with the theme “Unlocking Tanzania’s Future Mining Potential.”
In a speech delivered on her behalf by Deputy Prime Minister Dr Doto Mashaka Biteko, who also serves as the Tanzanian Minister for Energy, the President stressed that the country welcomes foreign investors, recognizing that the mining sector holds the potential to create jobs, boost domestic revenue, and attract foreign direct investment.
She reiterated Tanzania’s commitment to conducting the necessary geological surveys to reduce investors’ costs. She added that surveys will also facilitate investment in strategically significant mining areas currently in high demand.
The President also highlighted Tanzania’s abundant resources, including cobalt, copper, and rare earth elements, among other critical minerals. Globally, their minerals are experiencing increased demand, a trend that can see Tanzania earn billions.
Tanzania mining industry reforms
According to the International Energy Agency (IEA), the demand for critical minerals will increase by 3.5 times by 2030. This growth is partly a result of the global drive towards zero emissions.
As the rising demand and elevated prices of key energy transition minerals are primarily associated with the energy sector, Tanzania is taking steps to address this. They are implementing reforms, including separating the Ministry of Minerals from the Ministry of Energy.
These sentiments were echoed by Uganda’s State Minister for Minerals, Peter Lokeris, who pointed out that “80 per cent of Uganda is rich in minerals.” He stressed the need for collaboration among East African Community (EAC) countries to refine minerals within the region rather than exporting them in raw form.
Furthermore, Malawi’s Minister of Mining, Monica Chang’anamuno, highlighted the opportunities for foreign investment in Malawi through collaboration with Tanzania and other African nations. She underscored the importance of such collaboration for job creation and national development through value addition.
Geophysical surveys of Tanzania’s mineral wealth
Among the event delegates was Anthony Mavunde (MP), the Minister of Minerals for Tanzania. He highlighted that only 16 per cent of the country has undergone high-resolution airborne geophysical surveys. This situation disadvantages Tanzania, as potential investors cannot fully grasp the industry’s potential, and policymakers struggle to identify the readily available minerals in the country.
Moreover, this lack of geological data increases costs for foreign investors compelled to conduct expensive explorations. Mavunde explained that conducting surveys to identify mineral types and locations would ease attracting foreign investors.
To achieve this objective, the Minister introduced ‘Vision 2030, Minerals are Life,’ which aims to drive Tanzania’s economy through the mining sector. This vision prioritizes the minerals sector as the development engine across various industries.
As the Minister elaborated, “Tanzania continues to be a net importer of fertilizers, which can be produced through phosphorous, urea, and other minerals all available for mining in Tanzania. With more information, we will be able to attract more investment in the mining sector.”
Furthermore, Mavunde pledged to reduce unnecessary bureaucracy and ensure a business-friendly environment in Tanzania’s mining sector. He assured delegates of his open-door policy and invited them to partner with the country.
Another event organizer, Abdululsamad Abdulrahim, Director of Ocean Business Partners, emphasized the need for a balanced distribution of profits between investors and Tanzania to increase the mineral sector’s contribution to the country’s GDP.
Finance is crucial to developing mining value chains
During the summit, the financial sector received recognition and was challenged to reduce interest rates on lending for the mineral sector. President Samia noted that the financial sector remains significant in providing essential funding for the mineral sector’s prosperity.
She acknowledged the contributions of CRDB and NMB banks, commending their leadership in lending to the sector. The President urged other financiers to follow suit, acknowledging the capital-intensive requirements of the mining sector.
Tanzania’s Ministry of Minerals organized this forum with DMG Events and Ocean Business Partners Tanzania Ltd. It attracted over 1,500 participants from more than 25 countries globally and coincided with a significant technology and innovation exhibition.
Tanzania is rich in rare earth elements and critical minerals, with approximately 24 currently under exploration. The sector generates over $2.5 billion annually, accounting for roughly half of the country’s exports by value. The Ministry of Minerals reported that the sector has attracted new foreign direct investment in mineral development exploration. Moreover, local investment has exceeded $1 billion.
The Tanzanian government aims to increase mineral earnings by 33 per cent over the next three years, resulting in a revenue boost of up to $302 million between 2023 and 2024. The sector is projected to attain a value of $6.6 billion by 2027. In addition to mineral extraction, this burgeoning sector offers opportunities to capture more value from critical minerals by establishing mineral processing centres within Tanzania before exporting.
Tanzania is the world’s sole producer of the precious stone Tanzanite. Moreover, the East African nation is the fourth-largest gold producer in Africa, after South Africa, Ghana, and Mali. The country’s annual gold production stands at approximately 40 tonnes. Copper production stands at 2,980 tonnes, silver at 10 tonnes, and diamonds at 112,670 carats.
According to the Tanzania Investment Sector (TIC), the government has set the goal for the sector to contribute 10 per cent of GDP by 2025 and has launched the sector’s Vision 2030. The sector comprises various companies, including major, medium-scale, and small-scale mining enterprises.
Across the country, key mineral deposits include coal, copper, diamonds, gold, nickel, silver, and uranium. Significant discoveries of natural gas may alter the energy landscape. The government’s plans involve using coal-fired power to address energy shortages.
The global transition towards cleaner energy continues gaining momentum. Consequently, the demand for rare earth elements and critical minerals continues to rise. In response to this growing demand, mineral exploration in various regions of Tanzania has significantly expanded in recent years.