Why critical minerals are vital to Tanzania

Dar es Salaam. Experts want the formulation of a policy, amendment of laws, harmonization of ministries and increased public awareness for the country to benefit from abundant critical minerals found in the country.

They also want the country to carry a comprehensive research to establish opportunities associated with increased demand of critical minerals following the world’s shift from carbon energy sources to green or clean energy.

This call was made following a recent presentation during the breakfast debate organized by Policy Forum themed ‘Minerals Extractive Sector Governance: Critical Minerals Potential and Implications for Tanzania’.

The presentation was made by former Commissioner of Minerals, Dr Dalaly Kafumu who was commissioned by the National Resources Governance Institute (NRGI) to research on the area.

Speaking to The Citizen after the presentation, Dr Kafumu said the on-going global energy transition requires Tanzania to formulate specific policies for critical minerals and consider providing incentives to investors carrying exploration and extraction of critical minerals.

“However, we are not forced to have specific policies on critical minerals, rather amendments could be done on the mineral acts in order to include sections on development of critical minerals in the country,” he says.

Dr Kafumu said the ministries of Energy; Minerals; Investment, Industry and Trade involved in the energy sector should be harmonized to increase their understanding on their responsibilities in the energy transition journey.

He also says the ministry of Investment, Trade and Industry should really be responsible for attracting Foreign Domestic Investment (FDI) in utilization of critical minerals for production of clean energy or equipment used for that purpose.

According to him, the public should also be educated on the importance of clean energy in environmental cleanness and climate change mitigation.

“Therefore, Tanzanians in rural areas should be mobilized to shift to solar energy. They should also be provided with skilled technicians to service and fix damaged equipment in their respective areas,” he says.

But, the Natural Resource Governance Institute (NRGI) manager for East and Southern Africa, Mr Silas Olan’g said the government, lawmakers and policy makers should carry a comprehensive research to establish available opportunities based on the country context and how the country would benefit with available critical minerals.

“The country should also formulate policies that will stimulate growth and prosperity of the whole minerals industry and prevent stunting of either production of main minerals such as gold or critical minerals which are by-products of main minerals,” he says.

He says it was the right time for Tanzania to go for clean energy, noting that the World Bank (WB) and International Energy Agency (IEA) statistics show that demand for critical minerals keeps increasing due to the world transition.

According to him, reports will increase a demand for critical minerals which will attract price hikes, noting that appropriate strategic plans should be put in place for the country to benefit.

Furthermore, he said Tanzania shouldn’t only focus at trading the clean energy, but also making better use of it in order conserve the environment and join the world society in the migration.

“The country should see the possibility of attracting investment in the production of equipment using critical minerals as raw materials such as car batteries,” he said.

He said the factory could utilize raw materials from other East African Community (EAC) member states in order to enable it operate throughout the year and make it economically viable.

Mr Olan’g was supported by Dr Kafumu who said critical minerals are important in the production of clean energy (green energy) production equipment such as solar panels, wind turbines, geothermal, ocean waves energy etc.

He said the government should attract domestic investment for manufacture of such mentioned equipment and adds that there were no reason for the country to import.

“What we are supposed to do is to ensure manufacturing companies invest in the country in order for the business to be localized,” he says.

Most used minerals

Dr Kafumu says the IEA 2020 research findings show that there is a significant increase on the use of critical minerals in the clean energy technologies.

He said while conventional cars constitute of 40 kilo of critical minerals; electric cars have 200 kilogrammes of the natural resources.

In the area of power generation; reports show the quantity critical minerals in kilogramme required for production of one megawatt of clean energy in brackets as; wind offshore (15,000) and wind onshore (10,000).

Others according to him are; Solar PV (6,600); Nuclear (5,000); coal (3,000) and Natural Gas (1,500).

Emphasizing on increased demand for critical minerals, Dr Kafumu said in the past, investors arriving in the country were looking for major minerals like gold, noting however that things have changed since 2015 when they shifted preferences to critical minerals.

“Therefore economically, Tanzania stands a better position to influence the world market, especially benefiting through foreign currency earnings from the exports,” he says.

He says the known graphite deposits have ranked the country sixth worldwide giving it an opportunity to play fairly in the global business.

According to him, once the country successfully attracts investment, manufacture of clean energy and production equipment, the sector will be linked to other economies, creating more jobs, increase generated income especially foreign currency; referring to it as a boom.

Tanzania’s critical minerals

According to Dr Kafumu, in 2020 Tanzania’s copper production stood at 12,000 tonnes per year which was insignificant in the world ranking.

However, in 2019 Tanzania estimated to have 18 metric tonnes of graphite, ranking it fifth globally and that it would have significant influence on the world supply by 2025.

“The Kabanga nickel resources with 58 metric tonnes is 19 percent of the world reserves. This will make Tanzania a world production player by 2025,” he said.

Dr Kafumu said the Mkuju uranium resources is about one percent of the world reserves, therefore it can have a significant impact on world production.

Limitations

According to him, Tanzania has no specific policy, code, strategy or plan dedicated to promoting critical minerals for energy transition in order to tackle climate change.

“The government considers most critical minerals as strategic minerals in the national economic development strategy. It mentions some critical minerals in the Mining Act RE [Cap 123] 2018 Section 4(h)(b).

Lesson from others

Dr Kafumu cited the US, Canada and Australia as world countries that have managed to enact policies, laws and strategies to attract growth and protection of the sector.

For instance; he said the US has formulated the Critical Minerals and Public Policy of 2014; listed 35 critical minerals; increased domestic production and created reliable supply chains.

He said the US also enacted the National Rare Earth Cooperative Act, 2014; the Regulation of the Rare Earth Element (REE) minerals for green economy and the national security; the Critical Minerals Policy of 2013 and regulates exploration, mining and trading to support the energy transition.

But, Canada has listed 33 critical minerals, provides incentives for the mining of minerals needed for clean energy technologies and electrification.

According to him, Australia has enacted the Critical Minerals Strategy 2019; developed the official critical minerals list with 24 elements; promotes investment; provides incentives to boost innovation and increased competitiveness.