Tanzania inks US $77M iron mining deal
A US $77million iron mining deal has been sealed between Tanzania’s National Development Corporation (NDC) and Fujian Hexingwang Industry Tanzania.
The agreement aims initiate iron ore mining operations in the Ludewa District, Njombe region. The Tanzanian government will hold a 36% stake in the project, with the remaining 64% controlled by the investors.
The project is expected to boost domestic steel production within the next three years, reducing Tanzania’s dependency on steel imports, which currently cost the nation an average of US$1.22 billion annually, making it the country’s second-largest foreign exchange expenditure after oil.
The project is significant, given that a 2020 verification confirmed the presence of 101 million tonnes of iron ore in the target area. Over 300 residents who will be displaced will be compensated to facilitate the project.
Mining in Tanzania
Tanzania, a major player in Africa’s mining sector, is the ninth-largest diamond producer on the continent and holds 13% of the world’s graphite deposits. The country produces approximately 55,603 kg of gold annually, with gold exports amounting to US$2.95 billion in the year leading up to August 2023. This marks an increase from US$2.75 billion in the previous year, contributing about 39% of Tanzania’s goods exports. Coal exports also saw significant growth, reaching US$227 million, up from US$82 million the previous year.
The mining sector, which currently contributes around 7% to Tanzania’s GDP, is targeted to increase its contribution to 10% by 2025 as part of the country’s Development Vision 2025. Analysts project that the sector could reach a value of US$6.6 billion by 2027, highlighting its crucial role in Tanzania’s economic transformation efforts.
