- China has launched a truck assembly plant in Tanzania.
- At the same time, President Samia has ordered long-stalled coal and iron mines to be revived.
- Over 1000 persons to be relocated to establish coal and iron mines .
Tanzania has inaugurated a new truck assembly plant to be run by a Chinese company as the country pushes its industrialization agenda. This truck assembly plant has raised talks of power and metal ore supply for companies, and two key mines have resurfaced, the Mchuchuma coal and Liganga iron ore mines.
Known as the Saturn Corporation Limited Company, the truck assembly plant has this May been inaugurated by the country’s President Samia Suluhu Hassan.
Located in Kigamboni District of the coastal commercial port city of Dar es Salaam, the plant is run by China’s SinoTruk International. The company is renowned for trucks, tippers, tankers and spare parts under the premier brand HOWO.
Saturn Corporation is an official distributor for China’s SinoTruk International and the deal is expected to generate more than 2,050 job opportunities for Tanzanians.
“Industries increase production and provide employment for our people…for us, employment is a very important factor in promoting an integrated economy,” President Samia said at the inauguration.
The president also cited the fact that the assembly plant also means increased government revenue through taxes and related fees. “ but also when there is investment like this, the government’s revenues increase which gives us the ability to better provide social services for the people,” she said.
Another key benefit for Tanzania is the fact that establishment of such a factory in the country means direct transfer of new technology as well staff training.
According to company officials, this single plant has the capacity to assemble over 30 trucks on a daily basis making Tanzania a supply venue for the rest of the region. Notably, this strategic investment serves to bridge the gap for large trucks in East Africa a region that is investing heavily in infrastructure.
Further still, the fact that key government investments in the region is in public works like roads, bridges and other transport infrastructures, means there is high demand for trucks to help with bulk transportation.
Read also: Tobacco’s toll: Tanzania rakes in $400M annually, but at what cost to smokers?
Truck assembly sign of Tanzania’s improving business environment
Speaking at the inauguration of this new truck assembly plant, Tanzania’s President Samia Suluhu Hassan said this investment is a direct result of the country’s efforts to improve its business environment.
Notably, the president pointed to its most recent move to lower corporate tax from 30 percent to 10 percent.
“Tanzania is ready for investment, and this is the right time for investment,” the President said.
“Let companies come, and we will cooperate with them. We have strengthened the investment environment, and our goal is to stimulate more investment, increase employment, and ease the availability of vehicles that will help in economic activities, especially agriculture and business,” local media quoted President Samia.
As part of its efforts to improve its business and investment environment Tanzania is working to increase power supply to feed the growing industry sector. To this end, President Samia announced plans to expedite opening new ones and revamping old coal mines.
The president cited Mchuchuma and Liganga coal projects which will also help increase its steel production capacity. According to the president, the construction of the Mchuchuma coal mine will bring to life the long coveted 220kv transmission line that will supply the Liganga Metallurgical Complex, and an accompanying 600-megawatt (MW) thermal power station.
These two mining projects represent billions of dollars in investment and will ensure availability of affordable power and metal for investors and for export.
However, it has been a long time coming for the revival and active running of these two mines. As far back as 2013, it was reported that a power station will be constructed (within three years) and would have the capacity to produce some 300 MW by 2015, the plans did not materialize.
The estimated cost for Mchuchuma coal and Liganga iron ore mines and related production plants was estimated at US$3 billion. The deal was then to be signed between the government of Tanzania and China’s Sichuan Hongda. The investment would have led to opening of the Mchuchuma mine that is estimated to have coal deposits in excess of more than 480 million tonnes.
After years of dormancy, in January 2021, it was reported that one, Tanzania China International Mineral Resource Ltd (TCIMRL) had filed for tax incentives on import duty. The tax break would cover goods to be imported for the construction work at the mines, incentives for related spare parts and machinery, as well as relief on fuel.
It should be noted that investment works at these two cites faced environmental challenges and were at the time said to be contrary to the Natural Wealth and Resources (Permanent Sovereignty) Act, 2017 along with the Natural Wealth and Resources (Contract Review and Renegotiation of Unconscionable Terms) Act of 2017.
However, as of June 2021, President Samia Suluhu Hassan issued an executive plea for the ‘removal of red tape delaying the implementation of the Mchuchuma and other projects.’
The president said and has now reasserted that, it is high time these projects take-off and deemed them to be flagship projects necessary to spearhead national development.
Revive mines
With the new call by President Samia, it is hoped that now, the country will move on to revive these two mines and settle the related relocation of local in the region, a fact that hampered plans in the first attempt over a decade ago.
According to the Global Energy Monitor, as 2021, drilling exploration had been completed, Environmental and Social Impact Assessment (ESIA) studies done, and ESIA certificates and licenses for mining coal and water rights for use of Katewaka and Mchuchuma Rivers had been obtained.
Then in May 2022 Parliament debates over the 22/23 national budget brought the issue to the table with members calling for the speed up of the projects. However, by the end of the year, the House Members had not passed the resolution.
As of last year, January and February 2023, the government revived negotiations with investors and announced that if the government could not reach a conclusion with current investors, they would consider seeking other investors for the project.
Come June 2023, the government identified the projects as top priorities in its National Development Plan for 2023/2024, and launched a compensation program for some 1,142 residents that would be displaced by the project.
It is now reported that the power plant project is expected to begin construction in 2025 and start commercial operation in 2026.
