Tanzania steps into future with iron, coal breakthrough

DAR ES SALAAM: TANZANIA is on the verge of launching the long-awaited Mchuchuma Coal and Liganga Iron Ore projects, marking a major milestone toward realising the country’s Vision 2050 industrialisation goals.

These flagship projects are considered crucial for powering local industries, creating jobs and positioning Tanzania as a leading industrial hub in the region.

Speaking to editors in Dar es Salaam yesterday, Minister of State in the President’s Office (Planning and Investment), Professor Kitila Mkumbo said the government is finalising a joint venture agreement with Shudao Investment Group Company Ltd. (SDIG), a Chinese stateowned enterprise, to begin implementation of the projects.

Negotiations have been ongoing since January this year, including a high-level government visit to China in June to resolve key matters, Continues on Page 3 particularly shareholding arrangements, paving the way for the 3 billion US dollar (about 7.4tri/-) investment to take off.

Prof Mkumbo said the Mchuchuma and Liganga projects are pivotal to realising DIRA 2050 (Vision 2050), especially in boosting the manufacturing sector and promoting value addition for local raw materials.

“The success of these projects will be instrumental in achieving Tanzania’s Vision 2050 objectives. They will transform our industrial landscape, unlock manufacturing potential and create new value chains,” he said.

The government, he added, is committed to accelerating the implementation of the projects to ensure tangible benefits for the country and for the people of Ludewa District in Njombe Region, where the projects are located.

Prof Mkumbo said that coal from Mchuchuma will be critical in powering industries through a planned 600-megawatt power plant, while iron ore from Liganga will provide essential raw materials for manufacturing and construction.

Once operational, the Liganga iron and steel plant will position Tanzania as the fourth-largest iron producer in Africa, after South Africa, Egypt and Libya.

The integrated project includes a 600 MW coal-fired power plant at Mchuchuma, a 2.9 million tonnes/year iron ore mine at Liganga, a 1 million tonnes/year steel production plant, a 220-kilovolt power transmission line between the sites and a connecting road from Mchuchuma to Liganga.

It also includes integration with the Mtwara– Mbambabay–Mchuchuma/ Liganga SGR Railway Line (approximately. 1,000-kilometre).

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The rail corridor will not only facilitate mineral transport but also connect Tanzania to regional markets in Malawi, Zambia and the Democratic Republic of Congo (DRC), enhancing trade and economic integration.

Providing historical context, Prof Mkumbo explained that the project’s groundwork began in 1996 under the third phase government, with the National Development Corporation (NDC) tasked with sourcing investors.

Out of 48 companies that expressed interest, Sichuan Hongda Corporation (SHG) from China won the tender and entered a joint venture with NDC, forming Tanzania China International Mineral Resources Limited (TCIMRL), with NDC owning 20 per cent and SHG 80 per cent.

However, in 2015, the project was suspended after the government identified that some contract terms did not sufficiently protect national interests.

In 2017, the government initiated a review to amend problematic clauses. Then, last year, SHG’s stakes were fully acquired by Shudao Investment Group Company Ltd. (SDIG).

“Since January this year, we have been negotiating with SDIG to address unresolved contract issues. These talks are now in the final stages and we’ve agreed on most of the core elements,” the minister confirmed.

He added that the government has completed compensation for landowners in the project area, now fully under state ownership.

A total of 1,142 residents have been compensated, with the government spending 15.4bn/- for this purpose.