Tanzania to start domestic steel production to reduce imports
Deputy Prime Minister and Energy Minister, Dr Dotto Biteko (second right seated), in a group photo with Fujian Hexingwang Industry Tanzania Co Ltd and National Development Corporation (NDC) officials and other dignitaries shortly after signing the $77 million investment contract for the implementation of the iron ore mining for the Maganga Matitu project in Ludewa District, Njombe Region. PHOTO|SEIF JUMANNE
What you need to know:
- Tanzania spends an average of $1.22 billion, which is equivalent to Sh3.2 trillion for annual steel importation, making it the second largest foreign exchange expenditure after oil
Njombe. Tanzania plans to commence domestic steel production within the next three years.
The project is located in Ludewa District, Njombe Region has already been found.
The National Development Corporation (NDC) on Saturday, August 3, 2024, signed a $77 million contract with the investor, Fujian Hexingwang Industry Tanzania Co Ltd, to facilitate iron ore mining.
Currently, Tanzania spends an average of $1.22 billion, which is equivalent to Sh3.2 trillion for annual steel importation, making it the second largest foreign exchange expenditure after oil.
NDC managing director, Dr Nicolous Shombe, said production is expected to commence in 2027.
"Over 300 residents of the area will, in January 2025, start receiving compensation as Sh4.2 billion has been set aside for that purpose,” said Dr Shombe.
Deputy Prime Minister and Energy Minister, Dr Doto Biteko, who graced the event, said iron ore and coal mining contracts need to be beneficial to local communities.
He assured residents in Njombe Region, particularly Ludewa District, that the contracts would significantly benefit and transform their lives.
He added that 36 percent of the project will be owned by the United Republic of Tanzania, while the investors will hold 64 percent.
“The government will not accept having all the management positions occupied by foreigners. Part of the contract specifies that some management positions must be held by Tanzanians,” he said.
Industry and Trade deputy minister, Ms Exaud Kigahe, said that the Maganga Matitu project in Ludewa District was crucial for the country’s economic growth.
He said iron ore significantly contributes to industrial development, and a 2020 verification of the Maganga Matitu project revealed the presence of 101 million tonnes of iron ore.
The NDC Board chairman, Dr Yamungu Kayandabila, said the organisation is a strategic institution in driving the national economy and the Vision 2050 development plan.
Njombe Regional Commissioner Anthony Mtaka, said they are prepared to make the region the leader in the provision of a conducive investment environment.
Regarding the project, Ludewa legislator, Mr Joseph Kamonga, stated that the signing of the contract paves the way for residents’s compensation, ready for the project's execution.
