Tanzania to unlock challenges hindering mining projects

Dar es Salaam. The government has resolved to unlock challenges that could hinder the implementation of over $2.5 billion in projects in the country’s mining sector.

The project’s value, which is equivalent to over Sh6.3 trillion, will significantly transform the country’s economy through job creation, revenue collection, and the value chain.

The project-implementing companies are Tembo Nickel (Kabanga Nickel), Mamba Resources (Peak Rare Earths), Mantra Tanzania Limited, Sotta Mining (OreCorp Limited), and Faru Graphite (Black Rock Mining Ltd).

Working in the basis of a 2.2MTPA case, and further work in the DFS required to define the costing, Tembo Nickel (Kabanga Nickel) estimates capex +/- $1.3 billion (Sh3.3 trillion) for nickel project in Ngara, Tanzania.

Sotta Mining (OreCorp Limited) is executing the $474 million gold mining project in Sengerema District, Mwanza Region.

Faru Graphite (Black Rock Mining Ltd.) is executing the $320 million project to produce 340,000 metric tonnes of graphite in Ulanga District, Morogoro Region.

On the list is the $320 million (Sh800 billion) rare earth minerals project, which is implemented by Mamba Resources (Peak Rare Earths).

It also involves the development of a world-class rare earth mine in Ngualla, Songwe Region, as well as uranium mining in Namtumbo District in Ruvuma Region, which is implemented by Mantra Tanzania Limited.

All projects, with the exception of gold mining in Nyanzaga, involve critical mineral mining, including graphite, uranium, nickel, neodymium, and praseodymium, which are highly demanded worldwide.

Yesterday, Mineral’s permanent secretary, Kheri Mahimbali, told The Citizen during an exclusive interview that the government convened a meeting with investors in the five above projects to establish challenges decelerating their projects.

“The meeting aimed at enabling the government to understand the challenges they are facing in order to resolve them and therefore accelerate their implementation,” he said.

"Speeded implementation will enable citizens to receive compensation for those relocated to give room for project implementation,” he added.

He said accelerated investment activities will benefit citizens through job opportunities and enable the government to quickly start collecting revenues from the sector.

Mr Mahimbali highlighted challenges in road infrastructure development in project areas, noting that investors wanted to know whether it was the responsibility of the Tanzania National Roads Agency (Tanroads) or individual companies.

They urged that while Tanroads was a responsible institution for road construction, road construction in project areas couldn’t be their priority at a certain particular time, according to him.

“The companies sought to know how roads stretching over 54 kilometres could be developed for smooth transportation of goods to and from project areas,” he said.

Furthermore, he said electric connectivity and railway development at Dar es Salaam Port were other challenges highlighted by investors, especially when scheduling exports, saying they could lead to long queues.

According to him, investors were also of the view that the Tanzania and Zambia Railway Authority (Tazara) wasn’t efficiently utilised and that the railway could need major rehabilitations in order to meet their demands.

“Some investors said they were having challenges with the President’s Office Regional Administration and Local Government (PO-RALG), especially when they want to compensate residents in project areas, blaming the absence of clarity over those liable for compensation,” he said.

"Others hinted at challenges in securing funds, therefore requesting the government’s recommendations. The government will come up with intervention measures after challenges in the public and private sectors have been listed,” he said over the phone.

Detailing intervention measures, he said the ministry would schedule joint meetings gathering investors and government institutions such as Tanroads, PO-RALG, the Tanzania Electric Supply Company Limited (Tanesco), etc.

Tembo Nickel country manager Benedict Busunzu said yesterday that the meeting provided investors with an opportunity to address infrastructure challenges, noting that most projects are implemented in places with poor road infrastructure development.

He said Tembo Nickel is planning to commence implementation of the project next year, noting that the job would involve moving heavy consignments to project areas.

However, he was worried about whether the available roads and railways would withstand the volume of cargo that would be transported through them.

“For instance, 40 lorries will be sending cargo via roads at the beginning. The number is expected to be 100 lorries per day after achieving full operations,” he said.

“During the meeting, we asked the government to prioritise the road to the Tembo Nickel project under Tanroads. The agency should be provided with funds to address the project’s infrastructure challenges,” he said.

Mr Busunzu said that regarding electricity challenges, the company has signed an agreement with Tanesco to ensure the company has reliable electricity.

“We have no funding challenges because investors have disbursed enough funds for the initial stages of project implementation. They are also waiting for the completion of the feasibility study in order to dish out more funds for the project,” he said.