Tanzania is located along the coast of the Indian Ocean and is a member of the East Africa Community. Dar es Salaam is the largest port of entry in Tanzania and serves as a gateway to landlocked neighbouring countries.
The United Kingdom is the largest foreign investor in Tanzania followed by India, China, Kenya, USA, Netherlands, South Africa, Canada, Germany and Oman.
Tanzania is endowed with abundant natural resources, a favourable climate, political stability and an excellent geographical location in the region, which makes it accessible to potential export markets in the region, the Gulf States and South Asia.
Mining is one of the leading sectors in Tanzania, with the value of mineral exports increasing tremendously each year. In 2011 the value of mineral exports reached $2.1 billion, more than 95 percent of which came from six gold mines.
The mining sector contributes approximately 3.0% to annual GDP. Tanzania has the ambition to make the mining industry account for 10% or more of GDP by 2025. In the last decade, the country has witnessed growth in mining sector with reputable mining companies e.g. Barrick Gold, Ashanti Anglo-Gold, and Resolute investing in large-scale mines.
Minerals available in Tanzania include gold, diamonds, gemstones (such as rubies, aquamarine, tanzanite, sapphire; emerald, rhodolite, opal, zircon, alexandrite, garnets, tourmaline, spinel, peridot, iolite) Iron and Base metals (nickel and cobalt), platinum group metals: (platinum, palladium and Rhodium), Industrial minerals (soda ash, kaolin, salt along the Coast and inland lakes, vermiculites, limestone, silica sands, phosphate, gypsum, mica, dimension stones i.e. granites, travertine, marbles, quartzite) and coal resources.
Tanzania is the 4th largest gold producer in Africa after South Africa, Ghana and Mali and is the sole producer of the precious stone Tanzanite in the world. Gold production currently stands at roughly 40 tonnes a year, copper at 2980 tonnes, silver at 10 tonnes and diamond at 112670 carats. Business Monitor International (BMI) forecasts average annual growth in the mining sector of 7.7 per cent between 2013 and 2015. BMI also predict a doubling in value of the sector to around US $ 1.28bn in 2015.
However, nearly all major developments have been seen in the gold sector. As is stands, minerals make up over 52% of the country’s exports, of which, a large part results from gold, and it continues to see the majority of developments within the sector while other minerals also play a key role in the continued development of the mining industry in Tanzania.
The Tanzania mining industry remains attractive to investors, given the next few years of significant diversification to the mining of nickel, uranium and coal. There is also availability of investment incentives and supply chain opportunities in the mining sector.
Moreover investments in coal would receive a boost as Tanzania looks to coal-fired power stations to offset energy shortages. Gold mining exploration and gold production, gem stones mining and trading, as well as, small and artisanal mining activities are experiencing considerable growth as well.
Tanzania is said to have the largest gold reserves in Africa behind South Africa, making the country a major focus for the exploration and development of gold on the African continent.
Prospecting done revealed that some 130.2 million tons of gold reserves are present in Tanzania. The discovery and exploration of gold in Tanzania offers one of the best areas for investment in the country’s mining sector.
Tanzania is the sole producer of this precious gemstone. Currently, there is only one major investor, Tanzanite One and other small scale miners on Tanzanite.
Coal and Iron
Identified projects in the coal and iron sub sectors can also mean business opportunities include; further development of the Kiwira and Mchuchuma-Katawake coal deposits as well as Liganga iron ore deposits. There is a potential demand for the reserves of coal and iron at both global and regional level; their prices are globally high and projected to steadily rise through 2030 and beyond.
Tanzania urgently needs to develop new energy sources to supplement the national grid and for specific industrial projects. This sector has the potential to generate more than US$60-100 million per year in coal export revenues and generate 400MW of additional power.
Other minerals play key roles in attracting investments into the country and development of the mining industry in Tanzania.
Opportunities in the supply chain
Value adding ventures particularly in gemstones and jewellery manufacturing (e.g. lapidary, cutting, polishing, etc).
Supply of mining services such as drilling, airborne geophysical surveys; or refining. This also includes supply and/or hiring of equipment for large and small scale miners as well as contract mining.
Training in gemstone cutting and polishing;
Training in jewelry designing & manufacturing;
Training in gemology;
Training in diamond grading;
Establishing laboratory for testing and certification of gemstones;
Gemological research and development
Getting into the market
Production Sharing Agreements (PSAs)
Companies interested in acquiring acreages shall contact the Tanzania Petroleum Development Corporation (TPDC), who grants the rights to start the negotiations for a PSA, either through a competitive selection or on first-come first-served basis for open-areas. PSAs are signed for an 11-year period, with an obligation to redeem half of the block after 3 years if exploration work is not conducted, and half of the remaining acreage after another 3 years, and so on until the end of validity of the agreement. A Production Sharing Agreement template can be downloaded on TPDC website (www.tpdc-tz.com).
The exploration market is dominated by British companies. The supply can be directly from the UK (with a 15% withholding tax) or through local representatives or branch. Down the supply chain, several global specialised service providers have and are already setting up offices in the country.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
The Commercial Section
Ms. Misbah Mughal, Head of UK Trade and Investment (UKTI) Tanzania; Tel: +255 22 2290248; Email: Misbah.Mughal@fco.gov.uk
Ms. Beatha Ndekuso, Trade Officer; Tel: +255 22 2290271; Email: Beatha.Ndekuso@fco.gov.uk
Other important organizations for establishing contacts:
Ministry of Energy and Minerals (MEM) – www.mem.go.tz
Tanzania Chambers of Minerals and Energy (TCME) – www.tcme.or.tz
Tanzania Exporters Association (TANEXA) – www.tanexa.com
Tanzania Extractive Industries Transparency Initiative (TEITI) – www.teiti.or.tz
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
Tanzania Oil and Gas Suppliers Conference
Dar es Salaam
25th – 26th July 2013
2nd Tanzania Oil and Gas Conference and Exhibition
Mwalimu Nyerere International Conference Centre
Dar es Salaam
23rd – 25th October 2013