Mining in Tanzania

Tanzania is Africa’s fourth largest gold producer and accounts for 1.3% of total global production. Tanzania is also the only country in the world which produces tanzanite.

The extractive industry contribution to total GDP was 4.8% in 2016 and 2017. It is estimated that 1.4% of GDP is accounted for by the extractive informal sector. Overall, the extractive sector contributes about 1.4% of the formal employment in Tanzania. In 2016, the extractive sector 35,900 people (Tanzania EITI 2016/2017 Report).

Tanzania is a mineral-rich country with resources such as gold, diamonds, tanzanite and coal. Tanzanian soil also contains iron ore, base metals, uranium and gemstones. Recent oil and gas exploration activities have proved that there are offshore gas reserves in the south of the country.
So far, no crude oil discovery has been made.

Mining

A Brief History

Mining in Tanzania dates back to the pre-colonial era when Arab and local traders mined and sold the country’s natural resources including gold, copper, iron, and salt. The first commercial mining for gold was undertaken in the area surrounding Lake Victoria under the German colonial administrations in the 1890s. The estimated total value of minerals, mainly gold and mica, produced during 34 years of German administration (1884-1918) was between Shs 7 million and Shs 10 million.

During the 1920s and 1930s a number of British and South African mining operations opened and diamonds were discovered in the Mwadui area. However, mining activity subsided during the Second World War, during which prospecting for gold was banned.

Following independence in 1961 the mining sector was increasingly brought under the direct control of the state and public institutions such as the National Development Corporation (NDC) and STAMICO. It was not until the late 1980s that the government embarked upon a process of privatisation and liberalisation.

In the early 1990s the Government of Tanzania created the Investment Promotion Centre under the Investment Promotion Policy, following which the mining industry began to expand and attract international investors. Government efforts to undertake a mineral sector restructuring programme to encourage and promote private sector led development in partnership with the accumulated geo-data revealing Tanzania’s diverse mineral resources base and potential have strengthened the sector considerably and legislation in 1997 and 1998 reinforced this trend.

In 2008 UNCTAD’s World Investment Report showed that foreign direct investment (FDI) had significantly increased with Tanzania ranking as one of the top non-oil African countries in terms of FDI receipts, which was fuelled by the opening up and development of the country’s mining sector. During this period a number of large gold mines were established including Bulyanhulu in Kahama district with a capacity of 450,000 ounces and Geita Gold with a capacity of 650,000 ounces.

Minerals in Tanzania


Gold
Diamonds
Coal
Copper
Tanzanite

An Overview

Minerals available in Tanzania include gold, diamonds, gemstones (such as rubies, aquamarine, tanzanite, sapphire; emerald, rhodolite, opal, zircon, alexandrite, garnets, tourmaline, spinel, peridot, iolite) Iron and Base metals (nickel and cobalt), platinum group metals: (platinum, palladium and Rhodium), Industrial minerals (soda ash, kaolin, salt along the Coast and inland lakes, vermiculites, limestone, silica sands, phosphate, gypsum, mica, dimension stones i.e. granites, travertine, marbles, quartzite) and coal resources. Tanzania is the 4th largest gold producer in Africa after South Africa, Ghana and Mali and is the sole producer of the precious stone Tanzanite in the world. Gold production currently stands at roughly 40 tonnes a year, copper at 2980 tonnes, silver at 10 tonnes and diamond at 112670 carats. Business Monitor International (BMI) forecasts average annual growth in the mining sector of 7.7 per cent between 2013 and 2015. BMI also predict a doubling in value of the sector to around US $ 1.28bn in 2015.


Gold

Gold reserves in Tanzania are estimated at about 45m ounces. Gold exploration has been centered mostly on the greenstone belts around Lake Victoria, where several large deposits have already been discovered and are being developed. Gold production in Tanzania stands at around 50t per year which makes the country the 4th largest gold producer in Africa after South Africa, Ghana, and Mali. While Tanzania’s gold production increased by more than 700% over the past 25 years, from 5 to 40-50t per year, South Africa’s production of gold decreased from over 500t in 1990 to 140t in 2015.

Diamonds

Diamonds in Tanzania are found mainly in the Williamson diamond mine, which is located south of the town Mwanza. Petra Diamonds, through its subsidiary Williamson Diamonds Limited, holds 75% of the ownership rights over the mine, while the remaining 25% are owned by the Government of Tanzania. In 2015, the company produced 202,265 carats and plans to increase its production to 350,000 carats per annum in 2017. According to Petra Diamonds, the Williamson mine contains large diamond resources of approximately 38.1m carats.

Coal

Coal reserves in Tanzania are estimated at 1.9bn t, 25% of which are proven. Coalfields with the highest potential are Ketawaka-Mchuchuma in the Ruhuhu Basin, Ngaka fields in the South-West of Tanzania and Songwe Kiwira fields. Coal is currently exploited in small scale at Kiwira Coal Mine in Mbeya Region and Tancoal Energy Limited Mine at Ngaka in Ruvuma Region. Production of bituminous coal in Tanzania rose significantly during the 2010–2013 period, from 179t to 128, 920t.

Copper

Tanzanian soil has also proven abundant in copper, which led to the activity of two mines (the Nyasa Kwamnere Handeni and the Ibaga copper mines), with the overall production standing at 2980 tons.

Gemstones

Tanzania produces a variety of gemstones, including amethyst, aquamarine, garnet, ruby, sapphire, tanzanite and tourmaline. Tanzanite is found at only one location in the world, the Mererani Hills of Manyara Region in Northern Tanzania. The production of tanzanite rose by 17% during 2008–2013, from 768t to 900t, while discovered reserves amount to 500m carats.

Tanzania Minerals Map

Active Mines in Tanzania

# Mine Mineral Ownership Resources Grade Monthly Production Commisioning Mine Age
1 Biharamulo Gold Stami Gold 1.9mt 11.3g/t 125,000 ounce 2005 9
2 Buyamhulu Gold Acacia 25.2mt 14.5g/t 1,095,000 ounce 2001 36
3 Buzwagi Gold Acacia 17.9mt 2.3g/t 360,000 ounce 2009 11
4 Geita Gold AngloAshanti 169.8mt 3.3g/t 6,000,000 ounce 2000 17
5 Mererani Tanzanite Stamico 1.5mt 11.3g/t 120,000 ounce 2001 23
6 New Luika Gold Shanta Gold 6.1mt 6.1g/t 60,000 ounce 2012 11
7 Ngaka Coal Tancoal 200mt 11.3g/t 40,000 ounce 2011 100+
8 North Mara Gold Acacia 48.8mt 3.3g/t 2,800,000 ounce 2009 16