• Tanzania has signed a multi-dollar deal with Australia and the US to enhance its mining sector.
  • Tanzania Deputy Minister of Minerals, Dr Steven Kiruswa, will join a high-level line-up of speakers at the upcoming Critical Minerals Summit 2023 to affirm the country’s position as a leading mining hotspot.
  • Mining in Tanzania includes metals, industrial minerals, and fuel minerals, with gold having the highest contribution to the value of mineral exports.

The mining industry in Tanzania holds a unique position as one of the most financially rewarding sectors, consistently generating foreign currency. Beyond its economic significance, this sector also wields considerable political influence within the nation.

Therefore, a recent multi-million-dollar agreement forged with Australia and the US for the extraction and processing of critical minerals positions Tanzania advantageously as it prepares to participate in the forthcoming Critical Minerals Summit 2023.

In alignment with an announcement from the Critical Minerals Summit, Dr. Steven Kiruswa, the Deputy Minister of Minerals in Tanzania, is set to join a distinguished panel of high-level speakers at the upcoming Critical Minerals Africa event. This participation reaffirms Tanzania’s standing as a leading mining hub on the African continent.

Mining in Tanzania

Over the past decade, Tanzania has experienced a significant shift within its institutional frameworks, strategically positioning itself for change.

The Tanzanian mining sector encompasses a diverse range of operations, including both small-scale and large-scale endeavors. It covers a spectrum of minerals, including metals gold, iron ore, nickel, copper, cobalt, silver, industrial minerals (diamonds, tanzanite, ruby, garnet, limestone, soda ash, gypsum, salt, phosphate, gravel, sand, dimension stones, and graphite), as well as fuel minerals (coal and uranium).

Further, Tanzania boasts substantial reserves of rare earth and critical minerals, currently in the exploration phase. In terms of economic figures, Tanzania’s mineral exports yielded approximately $2.3 billion in 2019, marking a substantial increase from the previous year’s level of $1.6 billion.

Gold, in particular, made a significant contribution to the total value of mineral exports. Tanzania ranks as the fourth-largest gold producer in Africa, following South Africa, Ghana, and Mali, and is globally renowned as the exclusive producer of the precious gemstone Tanzanite.

During the first quarter of 2021, mining and quarrying activities made a substantial contribution to Tanzania’s Gross Domestic Product (GDP) growth, accounting for 10.2 percent of the GDP.

Partnerships within the sector are also proving to be fruitful and mutually beneficial. Foreign companies are now adding substantial value to the industry.

Mark Bristow, President, and CEO of Barrick Gold, highlights the success of Twiga Minerals, a joint venture between the Tanzanian government and Barrick Gold Corporation. This partnership has revitalized Tanzania’s gold mining sector, setting an example for similar collaborations, particularly in developing regions.

Read Also: Tesla set to use Tanzania’s Graphite in Mining Deal

Tanzania minerals to the world

Tanzania finds itself in a highly competitive position poised for a significant transformation of its mining sector, as underscored during the IEA Critical Minerals and Energy Summit in Paris on September 28.

Dr Kiruswa noted, “Tanzania possesses a substantial portion of the world’s critical minerals demand, encompassing graphite, nickel, cobalt, lithium, and rare earth elements such as copper, manganese, zinc, and aluminum.”

As global demand for green energy and transition minerals continues to surge, Tanzania has garnered considerable global interest in harnessing and exploiting its critical mineral resources. This aligns with its objective to augment the mining sector’s contribution to the GDP, targeting a 10 percent share by 2025.

In a broader context, the IEA stressed that the escalating demand for minerals vital to powering electric vehicles, wind turbines, solar panels, and other clean energy technologies underscores the imperative for international cooperation. As the global energy transition gains momentum, the need for these minerals intensifies.

According to the IEA’s Critical Minerals Market Review 2023, the market for energy transition minerals has doubled in size over the past five years, reaching a valuation of $320 billion in 2022. Its trajectory points toward continued rapid expansion, propelling it to a central role within the global mining industry. This places it firmly on the agenda of policymakers focused on energy and climate objectives.

Notably, Tanzania’s vast potential aligns with global mineral demands, as evidenced by the interest of US electric vehicle giant, Tesla, in Tanzania’s Anode Active Material (AAM).

According to Uranix, this development transpired after Tesla’s agreement with Magnis Energy Technologies Limited, a vertically integrated lithium-ion battery company, and its Tanzanian subsidiaries, Uranex Tanzania Limited (Uranex) and Magnis Technologies Tanzania Limited (MTT).

Escalating demand for minerals

Under this undisclosed agreement, Tesla has committed to procuring between 17,500 tonnes and 35,000 tonnes per annum of Anode Active Material (AAM) from Magnis Energy Technologies, commencing in February 2025 and spanning a three-year duration.

Tanzania finds itself in a highly competitive position poised for a significant transformation of its mining sector, as underscored during the IEA Critical Minerals and Energy Summit in Paris on September 28.

Dr Kiruswa noted, “Tanzania possesses a substantial portion of the world’s critical minerals demand, encompassing graphite, nickel, cobalt, lithium, and rare earth elements such as copper, manganese, zinc, and aluminum.”

As global demand for green energy and transition minerals continues to surge, Tanzania has garnered considerable global interest in harnessing and exploiting its critical mineral resources. This aligns with its objective to augment the mining sector’s contribution to the GDP, targeting a 10 percent share by 2025.

In a broader context, the IEA stressed that the escalating demand for minerals vital to powering electric vehicles, wind turbines, solar panels, and other clean energy technologies underscores the imperative for international cooperation. As the global energy transition gains momentum, the need for these minerals intensifies.

According to the IEA’s Critical Minerals Market Review 2023, the market for energy transition minerals has doubled in size over the past five years, reaching a valuation of $320 billion in 2022. Its trajectory points toward continued rapid expansion, propelling it to a central role within the global mining industry. This places it firmly on the agenda of policymakers focused on energy and climate objectives.

Notably, Tanzania’s vast potential aligns with global mineral demands, as evidenced by the interest of American electric vehicle giant, Tesla, in Tanzania’s Anode Active Material (AAM).

Read AlsoTanzania’s ambitious journey to energy riches

Multimillion dollars mining deals

According to Uranix, this development transpired after Tesla’s agreement with Magnis Energy Technologies Limited, a vertically integrated lithium-ion battery company, and its Tanzanian subsidiaries, Uranex Tanzania Limited (Uranex) and Magnis Technologies Tanzania Limited (MTT).

Under this undisclosed agreement, Tesla has committed to procuring between 17,500 tonnes and 35,000 tonnes per annum of Anode Active Material (AAM) from Magnis Energy Technologies, commencing in February 2025 and spanning a three-year duration.

Tanzania has strategically positioned itself to capitalize on lucrative mining ventures. In a noteworthy development reported by the Critical Mining Summit last April, Tanzania inked contracts totaling $667 million with three Australian firms to exploit graphite and rare earths. Further, Tanzania is actively seeking to enhance its collaboration with Australian service providers in the areas of mining, machinery, and technology services.

Concurrently, the US unveiled plans in March to bolster bilateral trade and investment ties with Tanzania. This endeavor culminated in the signing of a $500-million trade agreement designed to facilitate the export of goods and services across strategic sectors such as infrastructure, energy security, and power generation.

Additionally, the US is supporting the construction of a mineral processing plant in Tanzania, spearheaded by LifeZone Metals. This facility will use low-emission technology to process and export battery-grade nickel to the United States, commencing in 2026.

Tanzania boasts extensive reserves of critical and industrial minerals, metallic minerals, coal, uranium, and precious gemstones, including the renowned tanzanite. It is an established mining market and stands as the third-largest gold producer on the African continent.

The mining sector plays a pivotal role in Tanzania’s economy, accounting for over half of the country’s total exports, with a substantial portion attributed to gold production, thanks to world-class deposits situated around Lake Victoria.

Extractive industries

Consequently, investment opportunities in mining span the entire value chain, encompassing resource extraction, precious metal, and gemstone processing, iron ore and steel production, and the electrification of mining regions.

Beyond its mineral wealth, Tanzania enjoys a geostrategic location, boasting direct trade routes to Asia and access to six landlocked East African nations. The country also maintains a stable operating environment, bolstered by its participation in the Extractive Industries Transparency Initiative.

The Critical Minerals Africa 2023 event will delve into Tanzania’s potential to emerge as a regional leader in the critical minerals market, fostering connections between investors, project developers, and the nation’s top prospects.

Read Also: Tesla is in Africa with Econet already on-board

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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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