MINING’S UNDERDOG
Recent helium discoveries may have stolen the show, but Tanzania's gypsum production continues strong and steady with an increasingly important role to play in the country's industrialization narrative.
In 2016, the global gypsum market was valued at USD1.49 billion, just one-sixth of the value of the global helium market. Indeed, while Tanzania's helium discoveries made headline news last year, its gypsum production has gone fairly unnoticed. It is true that Tanzania ranks 42nd on the list of global gypsum producers, information that may not be quite so newsworthy as the bumper helium find.
However, gypsum, unlike helium, is a product for the masses. A mineral with a large calcium component, gypsum is used mainly in construction and agriculture, for fertilizer, cement, concrete blocks, and wall plaster. When we consider the world's rapid population growth, corresponding housing shortages, and gypsum's important role in the construction industry, it is not hard to see why growth of the world's gypsum market is estimated to hit 9.9% by 2018. It has other, more diverse uses too, and can be found in tofu (it can be a good source of dietary calcium), shampoo and cosmetics, and water decontamination products.
According to geologists, Tanzania is home to the world's purest gypsum. Its deposits, situated in Pindilo, Mbane, and Kilwa in the Southern Lindi region, have a purity percentage of 90%. Experts also say there is enough stock for domestic supply, and even export, to last for several decades.
However, while Tanzanian gypsum's purity might make it attractive for certain global industries and players, the focus for Tanzania's Ministry of Energy and Minerals is on domestic production and supply.
The former Minister of Energy and Minerals Sospeter Muhongo announced in 2016 that gypsum mining was vital for Tanzania's economy, since the compound–when produced locally—saved the country from importing and also increased job creation, subsequently fueling the economy in general. To further support the country's industry, Tanzania banned the import of gypsum in November 2016. According to Muhongo, local industries required 312,000 tons of gypsum annually, and with production at 320,000 tons per year, supply just outstripped demand.
Considering the ambition at the forefront of the country's Five Year Development Plan II to dramatically boost domestic manufacturing, industries like gypsum—in which products are sourced, extracted, processed, and consumed locally—are becoming increasingly important.
Furthermore, a study completed by the University of Dar es Salaam in 2012 revealed a missing link between mining and manufacturing in Tanzania, with too much of what was being extracted from the country's underground reserves heading straight for export in its raw form.
Many of Tanzania's gypsum companies, however, sing a different tune, focused as they are on in-country production and distribution. As Zachopoulos Georgios, Director for Knauf Tanzania, a global leader in gypsum production told TBY, “We are producing gypsum from local sources and then sending the finished material to the local market as well as for export. The government needs to attract more companies like us into the country in order to reach its industrialization target.” Increasing overall production is key to augmenting exports without sacrificing local consumption, and Knauf Tanzania's USD17-million investment in production aligns with its goals to increase exports from 8 to 30%.
However, local supply of raw materials is not enough for the industry to thrive; there needs to be a drastic improvement in transport and logistics infrastructure in gypsum mining areas and their surroundings in order to ramp up production, thus increasing the ratio of supply to demand and freeing up more compound for export. Many critics claim that scarce in-house production, transport, and distribution facilities are holding the country back. This will be the key challenge for the government as it rolls out its industrialization agenda, not just in gypsum production but also in industries across the board.
MINING’S UNDERDOG
TABLE OF CONTENTS
Guest Speaker
Hon. Patricia Scotland, Secretary General, Commonwealth of Nations
TBY talks to Hon. Patricia Scotland, Secretary General of the Commonwealth of Nations, on the advantages of being a member of the Commonwealth, the need to celebrate diversity, and Tanzania's war against corruption.
read articleGuest Speaker
Libérat Mfumukeko, Secretary-General, East African Community (EAC)
TBY talks to Libérat Mfumukeko, Secretary-General of the East African Community (EAC), on Tanzania's importance to the EAC, the major achievements of regional integration, and obstacles ahead of a monetary union.
read articleInterview
Raymond P. Mbilinyi, Executive Secretary , Tanzania National Business Council (TNBC)
TBY talks to Raymond P. Mbilinyi, Executive Secretary of Tanzania National Business Council (TNBC), on its work to support the private sector in the country, tackling challenges in the economy, and clamping down on corruption.
read articleReview: Banking
The Quest for Depth
If Tanzania is to meet its 2025 vision of attaining middle-income status, it will need to corral its bank-centric financial and capital markets for greater depth by extending participation and rendering credit more accessible to SMEs, women, and the young to spur economic growth.
read articleInterview
Dr. Baghayo A. Saqware, Commissioner , Insurance, Tanzania Insurance Regulatory Authority (TIRA)
TBY talks to Dr. Baghayo A. Saqware, Commissioner of Insurance, Tanzania Insurance Regulatory Authority (TIRA), on achieving universal healthcare coverage, the brilliance of microinsurance, and how to partner with public and private entities to increase the industry's penetration.
read articleReview
Legal Thunder
With the stepping down of Minister of Energy and Minerals Sospeter Muhongo in May 2017 over transparency issues and the introduction of three new laws that give the government the right to renegotiate or revoke existing mining and oil and gas rights, private players in the country are unsure of what future lies ahead. On the other hand, project-specific developments bode well for a sector in need of a breakthrough.
read articleInterview
Kapuulya Musomba, Managing Director, Tanzania Petroleum Development Company (TPDC)
TBY talks to Kapuulya Musomba, Acting Managing Director of Tanzania Petroleum Development Company (TPDC), on the planned expansion of the Mtwara-Dar es Salaam natural gas pipeline, entering northern industrial hubs, and empowering nascent industries.
read articleInterview
Marc Den Hartog, Managing Director, Shell/BG Tanzania
TBY talks to Marc Den Hartog, Managing Director of Shell/BG Tanzania, on the critical need for economies of scale, the importance of developing LNG for export, and why renewables must be taken into account in any long-term plan.
read articleInterview
Hon. Charles Mwijage, Minister, Industry, Trade and Investment
TBY talks to Hon. Charles Mwijage, Minister of Industry, Trade and Investment, on how to reach middle-income status, employing the private sector toward this end, and what sets the country apart from the rest of East Africa.
read articleFocus: Helium
Discoveries of Magna-tude
Despite being the second most common element in the universe, helium is in short supply on earth. With global reserves of the gas steadily dwindling, and demand steadily increasing, the discovery of a whopping 1.53 billion cbm of helium in underground chambers in Tanzania could not have come at a better moment.
read articleInterview
Gilliard W. Ngewe, Director General, Surface and Marine Transport Regulatory Agency (SUMATRA)
TBY talks to Gilliard W. Ngewe, Director General of Surface and Marine Transport Regulatory Agency (SUMATRA), on transportation budget allocation and cross-sector dialog and partnerships.
read articleInterview
Jared H. Zerbe, CEO, Tanzania International Container Terminal Services Limited (TICTS)
TBY talks to Jared H. Zerbe, CEO of Tanzania International Container Terminal Services Limited (TICTS), on regional trade flows and Tanzania's potential to take a leading role in orchestrating cargo movement.
read articleFocus: Tanzania Strategic Cities Project (TSCP)
East Africa’s “Geneva”
If Rome wasn't built in a day, it is not surprising that Tanzania's project to revamp eight of its largest cities is entering its eighth year of implementation. A release of further funds from the World Bank has given the project a new lease of life.
read articleReview
Lost in the Maize
Agriculture accounts for 30% of Tanzania's GDP, and the sector has experienced above-average output in recent years compared to the rest of the African continent. However, the sector's development is held back by poor rural farming practices and general infrastructure bottlenecks.
read articleInterview
Fred Kafeero, Tanzania Representative, Food and Agriculture Organization (FAO)
TBY talks to Fred Kafeero, Tanzania Representative of the Food and Agriculture Organization (FAO), on the organization's long-term support for Tanzania's development, recent initiatives in agriculture, and financing.
read articleFocus: 2020 Irrigation Target
Reap What You Sow
In 2006, the Tanzanian Ministry of Water and Irrigation set a target for Tanzania's agriculture sector: to irrigate 1 million ha of land by 2020. More than 10 years on and moving ever closer to the deadline, this target has not yet been met, though the first seeds are being sown.
read articleFocus: Southern Circuit Tourism
Hidden Gems
Tourism is frequently described as the jewel in Tanzania's economic crown. In 2016 alone, the industry contributed over USD2 billion in revenues. However, for at least three years, the government has expressed concern that tourism is not well distributed across the country.
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