Local mining investors assured of maximum govt protection, support

DAR ES SALAAM: AS Tanzania’s mining industry expands, the government is stepping up efforts to protect local investors and ensure that the country’s growing mineral wealth translates into stronger Tanzanian businesses and broader economic opportunities.

Protecting local mining investors is significant because a stronger domestic investor base can help retain more value from mineral production within the country, create jobs, build technical skills and strengthen Tanzanian participation in the wider mining value chain.

It can also provide the foundation for local companies to move beyond supplying basic services to investing in manufacturing, technology and specialised mining capabilities.

The emphasis comes as the government seeks to ensure that mining growth generates benefits beyond mineral extraction, with greater attention being given to local manufacturing, technology transfer, skills development and the use of Tanzanian suppliers and service providers.

The push reflects a broader shift in the mining policy debate, from how much Tanzania can extract to how much economic value the country can retain from the extraction process.

However, turning this ambition into lasting economic gains will depend not only on protecting local investors, but also on whether Tanzanian businesses can build the capacity and competitiveness required to supply a sophisticated and expanding mining industry.

The push comes amid efforts to strengthen local manufacturing, technology transfer, skills development and the use of Tanzanian suppliers and service providers across the mining value chain.

The underlying objective is to move beyond mineral extraction and build domestic capabilities that can support the industry while contributing to broader industrial and economic development.

But achieving that goal presents a more complex challenge: Local companies must not only be given opportunities, but must also be competitive enough to meet the cost, quality, technical and delivery requirements of mining companies.

The issue came into focus during a visit to Max Steel Limited in Dar es Salaam by Mining Commission Commissioner and Chairperson of the Local Content Committee, Dr Theresia Numbi.

The visit followed a Local Content Compliance Forum that brought together Government officials, mining companies, contractors, suppliers, manufacturers and other stakeholders to assess the implementation of localcontent requirements.

At the heart of the discussion was a fundamental question: How much value can Tanzania retain from its expanding mining industry if domestic companies lack the capacity and cost competitiveness to supply a greater share of the equipment and services required?

Dr Numbi said strengthening Tanzanian enterprises was critical to increasing domestic participation throughout the mining value chain, while warning that small and medium-scale miners could be left behind as the sector expands.

She called on established manufacturers and investors to support smaller operators by improving access to appropriate technologies, technical expertise, skills and locally produced equipment and infrastructure.

The challenge, however, is not simply increasing the volume of goods purchased from Tanzanian companies. It is about whether localcontent policies create productive capacity that remains in the country.

That distinction was emphasised by Max Steel Chief Operating Officer Bhavna Pandya, who argued that local content should ultimately be measured by Tanzania’s ability to make, build and deliver products domestically rather than simply where purchases are made.

For the mining industry, this includes the capacity to fabricate equipment such as carbon-in-leach tanks, chutes and silos locally, while developing the engineers, technicians, welders, fabricators, supervisors and managers needed to sustain that capability.

Such investment also has direct employment implications. Max Steel employs more than 140 Tanzanians and provides technical experience in heavy engineering and the delivery of mining and industrial projects.

Dr Numbi said skills development and technology transfer were therefore as important as physical manufacturing capacity because local content ultimately depends on people as much as factories.

“Building local content means developing people as much as it means establishing factories,” she said, stressing that technical knowledge gained through industrial investment should remain in Tanzania and contribute to the country’s wider industrial base.

Yet the competitiveness of domestic manufacturers remains a significant constraint.

She said Tanzanian manufacturers face cost disadvantages when duties and taxes on imported industrial raw materials make locally manufactured products more expensive than finished goods imported into the country.

This creates a policy dilemma. While measures aimed at promoting domestic manufacturing can stimulate investment, employment and skills development, high input costs can simultaneously weaken the ability of local manufacturers to compete for mining contracts.

Ms Pandya said manufacturers were not seeking protection from competition, but a more balanced operating environment that recognises the wider economic contribution of domestic production.

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Her argument is that the cost of locally manufactured products should be considered alongside the jobs, skills, tax revenue and productive capacity generated during their production.

She called for a review of duties and taxes affecting industrial raw materials and production equipment, saying targeted fiscal measures could enable domestic manufacturers to expand and compete on quality, reliability and price.

Max Steel currently has fabrication capacity of about 800 tonnes a month and plans to increase this to approximately 1,200 tonnes through an expansion programme, allowing the company to undertake larger and more technically demanding projects.

For the country’s mining sector, however, greater manufacturing capacity alone will not resolve the local-content challenge.

Domestic suppliers must be able to meet the technical specifications, delivery schedules and prices demanded by mining companies.

Smaller operators, meanwhile, need access to technology, finance, skills and reliable suppliers if they are to participate meaningfully in the value chain. This places responsibility across the industry.

The government policy determines the regulatory and fiscal environment; mining companies influence procurement decisions; while manufacturers must continue investing in technology, productivity, quality and skills.

The emerging debate therefore goes beyond compliance with local-content regulations to a broader question of economic competitiveness.

For Tanzania, the real measure of success will be whether mining expansion creates capabilities that endure beyond individual projects, companies able to manufacture competitively, workers equipped with specialised skills and supply chains capable of retaining a larger share of mining-related expenditure inside the country.

If achieved, local content would become more than a procurement requirement. It would become a foundation for turning Tanzania’s mineral wealth into lasting industrial capacity.