By TBY | Tanzania | Feb 03, 2014
The country is best known for its gold, diamonds, rubies, and tanzanite, an eponymous gemstone unique to the country. In addition, it has further deposits of minerals including coal, copper, […]
The country is best known for its gold, diamonds, rubies, and tanzanite, an eponymous gemstone unique to the country. In addition, it has further deposits of minerals including coal, copper, nickel, cobalt, gypsum, iron, lead, limestone, phosphate, tin, titanium, vanadium, and uranium.
The Tanzanian mining sector was, for a long time, held back by policies that discouraged private investment. However, the government got involved in 1997 through new fiscal measures and a new Mining Act in 1998 that brought about a revival. The most major impact of the reforms was the establishment of large-scale gold mines, with Canada’s Barrick Gold and South Africa’s AngloGold Ashanti the largest investors. Today, Tanzania is one of the continent’s largest gold exporters, with profits continuing to expand—in 2011 gold export earnings rose 31% to reach $1.88 billion, up from $1.4 billion the year before, thanks to higher world prices. Today, the sector has a renewed sense of growth, sparked by the introduction of a new Mining Act in 2010. Regulation changes include measures to boost small-scale miners, grant rights and licenses, outline terms for the exploration and production of radioactive metals, and combat occupational health and safety hazards. An additional article includes a requirement for investments to be 30%sourced from a company’s own funds, with the remaining 70% eligible to be funded by a loan. Requirements for corporate social responsibility (CSR) are also in place.
DIG IT UP
Aside from gold, diamonds are big business in Tanzania. For more than a decade, the country has been one of the largest producers in the region, with over 300 kimberlites confirmed, 20% of which are diamondiferous. The bulk of production comes from the Williamson Diamonds Mine at Mwadui, where production has been ongoing since 1925. While alluvial diamonds have been recorded, significant deposits have not been discovered. Indicative of the impact new technologies could play in the sector, the implementation of airborne infrared surveys could yield the discovery of new deposits.
The most significant gemstone mined in the country is tanzanite, or blue zoisite, which is unique to, and named after, the country. The gemstone is primarily mined at Mererani, while other gemstones mined in Tanzania include ruby, rhodolite, sapphire, emerald, amethyst, chrysoprase, peridot, and tourmaline.
Significant investments were also given the green light in mid-2012, including coal and uranium projects. Australian miner Mantra Resources received approval from UNESCO to build a $450 million uranium mine in a world heritage park, which will allow the country to begin more adequately tapping its 136.5 million-pound reserves of uranium. The government was also looking to tender the construction of a 200-MW coal-fired plant to the tune of $400 million in 2012, an effort to take advantage of the country’s 1.5 billion tons of proven coal reserves, most of which are located in the Ruhuhu and Songwe-Kiwira basins in southwest Tanzania. The country’s only coal mine has an annual output of approximately 35,000 tons, almost all of which is consumed locally for power generation, with the remainder exported to neighboring markets.
Recent exploration in the northwest of the country has revealed base metals and platinum group minerals (PGM), including nickel, cobalt, and copper mineralization. In terms of ferrous metals, a significant amount of iron ore has been identified, with titanium recorded in beach sands along the coast and titaniferous magnetic bodies identified in southwest Tanzania close to coal resources in Ketewaka-Mchuchuma. In the northwest, meanwhile, tin and tungsten are produced from the Karagwe Tinfields. Hope is also high that volcanic carbonates could yield a significant source of niobium and phosphates.
The industrial minerals sector is also strong in the Morogoro area, where there is a high occurrence of limestone and dolomite-rich resources of high purity. At Merelani in the north of the country, a mine has also been established to produce graphite, of which there is a 40-year supply at a mining rate of 15,000 tons per year. The mine will also produce tanzanite, the cost of which can vary between $2,000 and $3,200 for top-quality specimens when set in jewelry. Tanzanite occurs naturally in association with graphite, and earns the government an approximate $20 million a year through export revenues.
The country’s phosphate deposits have also traditionally been the source of the fertilizer industry’s inputs, with around 50,000 tons mined in the Arusha Region every year.
As the effects of the Mining Act of 2010 begin to be seen, the country looks set to begin leveraging new technologies to boost exploration and, thus, production in its minerals sector. Investors will be keen to ride the wave of high technologies to begin getting Tanzanian minerals out of the ground and on their way to market. “At the moment, the mineral sector is contributing 3.5% to GDP, but our intention is that it should contribute to the tune of 10% of GDP. We are on the march toward that percentage,” concluded Sospeter M. Muhongo, Minister of Energy and Minerals, in an interview with TBY.