Tanzania's coal exports rise to a record high
What you need to know:
- Tanzania – which sits on 1.9 billion coal reserves out of which 25 percent are proven – saw its exports of the commodity reach a record $223.8 million (nearly Sh527 billion) during the year ending March 2023
Dar es Salaam. Energy supply challenges caused by the ongoing war in Ukraine are increasingly pushing consumers to alternative energy sources, with Tanzania benefiting through record coal exports, latest data shows.
Tanzania – which sits on 1.9 billion coal reserves out of which 25 percent are proven – saw its exports of the commodity reach a record $223.8 million (nearly Sh527 billion) during the year ending March 2023.
The Bank of Tanzania (BoT) says in its Monthly Economic Review for April 2023 that the amount was a big jump from $31.9 million (nearly Sh75.12 billion) that was recorded during the preceding year.
“Exports of coal edged up to $223.8 million from $31.9 million, induced by rising demand for alternative energy, amid supply challenges caused by the war in Ukraine,” the BoT says.
Most of Tanzania’s coal reserves exist along the Songea Karoo belt while fields are found in Rukwa, Mbeya and Njombe.
The BoT said in one of its recent reports that most of Tanzania’s coal is destined to neighbouring countries including Kenya, Democratic Republic of Congo, Rwanda and Uganda and other countries outside Africa, especially Poland, Hong Kong and India.
With the war in Ukraine disrupting supply systems, demand for alternative energy sources to crude oil and natural gas – which have been in short supply due to the war – has been on the rise globally.
Most of Tanzania’s coal leave the country via Mtwara Port which is located closer to major fields than Dar es Salaam and Tanga.
Mtwara Port manager Norbert Kalembwe told The Citizen that from July, 2022 to March 2023, the port shipped nearly 1.5 million tonnes of cargo, which coal accounting for nearly 80 percent of the total.
He said Tanzania’s coal was also sold in countries such as the Netherlands, Poland, India, Egypt, the Democratic Republic of Congo and some West African countries such as Ghana.
“Up to March this year business has been good. We have seen an increase in revenue both for the port and government collections,” Mr Kalembwe said.
Late last year, Minerals minister Doto Biteko highlighted that in the financial year, 2021/2022 Ruvuma region produced coal weighing 1,477,351.24 tonnes worth approximately Sh485.545 billion.
Songwe region produced coal weighing 16,328.35 tonnes worth Sh1.122 billion and the Njombe region produced coal weighing 2,762.76 tonnes worth Sh234.19 million.
In the current fiscal year 2022/2023, by September 2022, he said Ruvuma region has produced 764.816.15 tonnes of coal valued at Sh287.557 billion; while Songwe has produced 4, 587.9 tonnes valued at Sh331.371 million and Njombe produced 444.41 tonnes of coal valued at Sh47.04 million.
The coal business is also in the rush as the demand for the product is said to be temporary considering big buyers, on this case the European countries aim to be climate-neutral by 2050 – an economy with net-zero greenhouse gas emissions, marking a stop to coal usage.
This objective is at the heart of the European Green Deal and in line with the EU's commitment to global climate action under the Paris Agreement.
During a recent interview with The Citizen, the head of the European Union Delegation to Tanzania, Mr Manfredo Fanti, also hinted that in the coming years, the volume of Tanzanian coal exports to Europe will decrease because of the EU’s policy on carbon emissions.
“And also using other energy sources like coal, which were being phased out because of concerns related to climate change. So in the short-term and with the effect of the war, the EU has increased its import in coal, but we shouldn’t expect that in very few years to come,” he said.
