China eyes Tanzania for Mining Investment

Posted on : Thursday , 29th January 2015

 Mwanza — Chinese resource companies are looking at making Tanzania an investment stronghold.

Mining and infrastructure projects are attracting more Chinese companies and individuals in the Tanzanian economy.

There are 6,000 Chinese interested in exploiting minerals in South Tanzania.

The Njombe Regional Commissioner, Rehema Nchimbi was quoted recently as saying, "There are more than 6,000 Chinese individuals who have shown interest to invest in Liganga iron ore mining in Ludewa district, Southern Tanzania."

Mining is one of Tanzania's biggest foreign exchange earners. Between 2001 and 2011, mineral-rich Tanzania received funding worth $4.6 billion from the Chinese.

China emerged as Tanzania's single biggest trading partner in 2012, accounting for 15% of Dar es Salaam's trade.

Tanzania is expected to export the first consignment of iron ore and steel in four years to come.

It is this ample iron ore and coal that has prompted Tanzania in the Mtwara Development Corridor initiative to commission a Tsh 2.4 trillion Mtwara-Mbamba Bay railway line with spurs to the mineral-rich Liganga-Mchuchuma.

According to the National Development Corporation (NDC) Tanzania is set to produce 1.1 million metric tonnes annually.

It is envisaged that once the commercial production takes off, Tanzania will be one of the top four iron producers in Africa.

Iron ore production in Africa is dominated by South Africa, Mauritania and Algeria. Some countries possess iron ore deposits that are as yet to be developed.

For Tanzania this will be the basis for putting up an iron and steel metallurgical complex that in turn will create hundreds of jobs.

China, the world's biggest iron ore consumer, needs to invest more in overseas mining projects to improve its pricing power.

China imported 819 million tonnes of iron ore last year, an increase of 10.2% from 2012, with Australia and Brazil together supplying almost 70% of the shipments.

Last year, the Minister for Industry and Trade, Dr Abdallah Kigoda said, "China is largely importing ores mainly copper and precious metal ores, but also smaller quantities of niobium, tantalum, vanadium, zirconium and manganese, vegetable and animal products from Tanzania."

Tanzania's National Development Corporation (NDC) is embarking on five major projects which are coal mine, iron ore and production of 600MW electricity.

NDC also is involved in the construction of a steel complex and installation of a transmission line from Mchuchuma to Liganga for the iron production complex.

The Liganga iron ore mine and Iron and Steel Complex is expected to produce one million metric tonnes of iron and steel products, vanadium pentoxide and titanium dioxide.

NDC on behalf of the government in September 2011, signed a Joint Venture Agreement with Sichuan Hongda Group limited to implement the project.

They created Tanzania China International Mineral Resources Limited (TCIMRL) that would invest $1.3 billion.

The explorations carried at the Mchuchuma-Liganga projects have already confirmed that the coal and iron ore deposits will be mined for more than 100 years.

According to the study, more than 364 million tonnes of coal and 219 million tons of iron ore deposits have been confirmed at Mchuchuma-Liganga projects.

However according to some analysts Tanzania's mining industry will come under pressure over our forecast period to 2018 .

This will largely be a result of weakness in global gold prices disincentivizing production growth. Although gold is the current mainstay of the sector , there are plans to diversify into nickel , coal and uranium production in the long term

Tanzania is East Africa's top producer of gold, diamonds and the gemstone, Tanzanite.