How Tanzania’s coal found its way to European markets

  • Tanzania coal is now exported to foreign markets
  • Tanzania’s Mchuchuma coal deposits has around 540 billion tonnes of reserves
  • Mining in Tanzania is one of the most vital sector in the country

Mining in Tanzania has emerged to become the most vital vein in the nation’s economy. After a series of policy and law changes within the mining industry, Tanzania’s mining company, Ruvuma Coal limited, has expanded the nation’s coal materials to European markets.

According to information from The Citizen, the vital breakthrough is a product of a one-year contract signed by Ruvuma Coal Limited and Hong Kong-based Kenexon Company.

The two companies will impact the coal mining landscape in Tanzania as at least 60,000 tonnes of coal will be shipped off to the Netherlands.

Further, the agreement is now in execution and the consignment was transported on a ship known as Southern Cross, which docked at the Mtwara Port on May 31 2022.

Mining in Tanzania has become an essential activity. In 2019 Tanzania earned around $2.3 billion with minerals exports, a significant increase over the 2018 level of $1.6 billion (International Trade Administration).

Mining and quarrying operations contribute significantly to enhancing the Tanzanian economy. The sector contributed extensively to Q1 2021 GDP. The sector recorded 10.2 per cent of the GDP.

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The Tanzanian company has grown enormous wings as it now ships its coal to Europe, India, China, Egypt, and Senegal and exports it to Ghana and Ivory Coast (Citizen).

Coal mining in Tanzania

Tanzania has more than gold and natural gas reserves. It has coal reserves, too, in abundance. Tanzania’s coal reserve is estimated at 1.9 billion tonnes, 25 percent proven (Tanzania Invest).

According to Tanzania Invest, coal projects are located in south-western Tanzania and include the Ngaka coal mine, the Rukwa coalfields, and the Kiwira coal mine.

Mchuchumba coal deposits only, located in the Southern Highlands in Tanzania, have massive deposits estimated at 540 million tonnes of reserves, enough to produce 600 MW for over 100 years (The Citizen).

Over time, coal mining in Tanzania has grown. Coal production reached 712,136 tonnes in 2019, compared to 257,321 tonnes in 2015.

Coal in Tanzania is used for industrial applications. Tanzania’s industries use coal for thermal applications, particularly in cement factories and agro-processing industries

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Tanzania’s coal mining landscape is featured with attractive investments. In September 2011, a Chinese company, Sichuan Hongda Co. ltd, signed a $3 billion deal with Tanzania to mine coal through the Mchuchuma Coal mine and iron ore, yet another big win for the sector (Global Energy Monitor – GEM).

The current agreement comes to supplement the existing efforts the government of Tanzania and other private actors made to enhance coal mining.

In January 2021, it was reported that Tanzania China International Mineral Resource Ltd. (TCIMRL) requested tax incentives on import duty on goods to be imported for the construction work, incentives on spare parts and machinery, and relief on fuel.

In response to the latter, Tanzania’s President Samia Suluhu Hassan made a serious move to complement the sector’s development by calling for the removal of bureaucracy, delaying the implementation of the Mchuchuma and other projects and letting them take off.

Tanzania’s coal mining operations are extensive. Another vital project is the Ngaka coal project, one of the largest operational coal mines in Tanzania and East Africa. The project began operations in 2011, and it was expected to produce between 2-3 million tonnes of coal for export (GEM).

Further, it was estimated the project to carry a maximum production rate of 4-5 million tonnes per annum, “the Ngaka Coal project has sufficient proven coal resources for over 50 years of profitable, low-cost production” GEM

However, the new agreement is setting a whole new bar for the coal mining and shipment landscape in Tanzania.

The Ruvuma Coal Limited manager Mr Saidi Gadafi revealed during the event to load the coal onto the ship yesterday, argued that consignment brings the total volume of coal transported outside the country to 300,000 tonnes since the two firms marked the deal several months ago (The Citizen).

Over the past five years, Tanzania has worked tirelessly to reshuffle its mining sector by placing strategic plans and institutional frameworks for the betterment of attracting investment and operations.

“We are grateful to the government for improving the port infrastructure. In the past, we could transport only once in every three months, but with facility improvement at the port, we have been receiving two to three ships for the purpose every month,” noted Mr Gadafi.

Tanzania is working on utilizing every form of fuel, including coal, on boosting energy production.

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Padili Mikomangwa is an environmentalist based in Tanzania. . He is passionate about helping communities be aware of critical issues cutting across, environmental economics and natural resources management. He holds a bachelors degree in Geography and Environmental Studies from University of Dar es Salaam, Tanzania.

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