Why Tanzania’s Sh600 billion steel plant matters nationally

The plant, to be constructed at Nala in Dodoma City by A1 Iron & Steel Tanzania Ltd, will be a fully integrated steelmaking facility. It will create about 1,500 direct jobs and more than 5,000 indirect jobs in one of the country’s most significant mineral value-addition investments.

It will use locally sourced iron ore as its main raw material and deploy blast furnace technology alongside the Basic Oxygen Furnace (BOF) process to produce finished steel products within Tanzania, reducing the need for the country to export raw minerals.

Once completed, the facility is expected to produce hot-rolled coils (HR coils), roofing sheets, steel mesh, binding wire and nails—products widely used in construction, infrastructure development, manufacturing and agriculture.

Minister for Minerals Anthony Mavunde announced the project on June 15, 2026, after meeting investors from A1 Iron & Steel Tanzania Ltd in Dodoma, saying the investment reflects growing confidence in Tanzania’s industrial policy environment under President Samia Suluhu Hassan.

He said the project fits directly into the government’s long-term objective of value addition, which seeks to ensure that minerals extracted in Tanzania are processed domestically into industrial inputs and finished goods.

“This is a strategic area, and we have placed great emphasis on ensuring we achieve the goal of ending the export of raw minerals,” Mr Mavunde said.

Beyond its industrial scale, the project signals a structural shift in Tanzania’s development model.

For decades, the country’s mining sector has largely focused on exporting raw or semi-processed minerals, limiting the extent to which natural resources translate into domestic manufacturing activity.

The new steel plant is designed to reverse that trend by creating a full production chain within the country.

The integrated design means the entire process—from iron ore processing and ironmaking to steel production and fabrication—will take place at a single site.

The blast furnace will convert iron ore into molten iron, which will then be refined into steel using the BOF process, a widely adopted method in global large-scale steel production.

Mr Mavunde said the project will also support the country’s broader industrialisation drive by creating linkages between mining, manufacturing and construction.

He said such integration is key to transforming minerals from “resources in the ground” into productive economic assets.

He said that the project is expected to reduce Tanzania’s dependence on imported steel, which has long exposed the construction and manufacturing sectors to global price fluctuations and supply chain disruptions.

By producing steel domestically, the country is expected to stabilise supply and potentially lower costs for infrastructure development.

The investment also comes at a time when government data suggests Tanzania’s steel sector is already expanding rapidly.

During a previous visit to a steel plant in Mkuranga, Coast Region, Minister of State in the President’s Office (Planning and Investment), Prof Kitila Mkumbo, said the country now hosts 19 major steel and corrugated iron sheet manufacturers.

He said Tanzania’s combined production capacity stands at about 1.2 million tonnes, compared with domestic demand of roughly 600,000 tonnes, suggesting that local industry is increasingly capable of meeting national needs.

“We now have the capacity to meet our local needs, with 19 major steel industries capable of fulfilling domestic requirements,” Prof Mkumbo said in March, last year (2025). “With production exceeding demand, we are confident that we no longer need to rely on steel imports.”

Meanwhile, A1 Iron & Steel Tanzania Ltd Managing Director Himanshu Tiwari said the Nala facility will be a fully integrated plant designed to ensure complete value addition within Tanzania.

He said the use of blast furnace and BOF technology will allow the company to process iron ore into finished steel products locally, while also building technical skills and industrial expertise within the country.

Mr Tiwari said construction is expected to begin in July 2026 and be completed within 15 months.

Once operational, the plant is expected to create about 1,500 direct jobs and more than 5,000 indirect jobs through supply chains, transport services, construction activities, mining logistics and downstream manufacturing.

Beyond employment, officials say the project is expected to stimulate wider economic activity in Dodoma, which is increasingly emerging as an industrial and logistics hub alongside its role as the national capital.

The government views the investment as part of a broader strategy to ensure that Tanzania’s mineral wealth translates into factories, jobs and export-ready products rather than raw material shipments.

Mr Mavunde said the administration will continue to prioritise investors who add value locally, arguing that such projects strengthen industrial resilience and keep more economic benefits within the country.