Tanzania, Chinese firm to ink deal on iron ore project

Dar es Salaam. The government will this Friday sign a contract worth $77.4 million with a Chinese firm, Fujian Xho Company Limited, to implement the Maganga Matitu Iron Ore project, the Industry and Trade Minister, Dr Selemani Jafo, said yesterday.

At least Sh4.2 billion will be spent on compensating 385 people to be affected by the project.

Covering an area of 19.63 square kilometres, the Maganga Matitu Iron Ore project is part of the Liganga Iron Ore project which is located in Ludewa District, Njombe Region.

As part of the wider Mtwara Development Corridor, the Maganga Matitu Iron Ore project seeks to produce sponge iron as raw material for steel industries.

Speaking during a visit to the offices of the National Development Corporation (NDC) yesterday, Dr Jafo said the project was important for Tanzania’s economic growth endeavours.

"This is one of our major projects that will bring economic benefits by employing many Tanzanians and also producing iron that is needed for many of our infrastructural projects that the government is implementing," he said during his visit while reviewing the projects under NDC’s stewardship.

Elaborating on the project, the NDC Managing Director, Mr  Nicolaus Shombe, said the full implementation would start in January, 2025.

He said the project, worth $77.4 million in equity money, would have the capacity to produce 1 million tonnes of iron every year for 35 years.

It will be owned jointly between the investor (64 percent) and the government (36 percent).

"After the signing, in January they will pay compensations to the surrounding communities to pave the way for the project, including the mobilization of equipment," he said.

He noted that they would expect production to start 18 months after the implementation had begun in January.

According to him, the project will produce iron ore that will be used by other industries for production.

Currently, he said, they were using recycled iron, whose quality was not good for production.

The Liganga Iron Ore project is among the anchor projects in the Mtwara Development Corridor.

Maganga Matitu is one of the five hills of the Liganga Iron Ore Project set aside by the government for a local programme to produce sponge iron as raw material for steel industries.

The Maganga Matitu project is meant for the development and implementation of an iron ore mine, a beneficiation plant, and the associated infrastructure.

Speaking on the Mchuchuma Liganga projects, Dr Jafo directed the NDC to expedite its implementation.

According to Mr Shombe, NDC has completed a feasibility study and an environmental assessment to enable the implementation of the project.

However, he noted that they were still in discussions with the investor on a number of issues, including tax exemption.

"We have started talks and are currently in the third meeting on that," he said.

On soda ash in Engeruka, he said they had completed a market study, environmental assessment, and infrastructure review, and what was being awaited was compensations to the surrounding communities.

He further told the minister that while the Corporation was making strides in the implementation of major projects, they were facing the challenge of lacking enough financial resources.

"We are a business entity and not a service provider, and the current law does not favour us," he said.