Mining industry in Tanzania will continue to face various challenges as the country witnesses a growing minerals industry albeit at a slower pace.
According to a report released by the Tanzania Chamber of Minerals and Energy (TCME) during its 18th annual general meeting, the anticipated several new major mines to be brought into production in the next five years, will change the mining sector landscape in terms of the sector’s contribution to the Tanzanian’s economy.
Releasing the report in Dar es Salaam recently, TCME Chairman Joseph Kahama said the new mines will result in a substantial increase in the number of Tanzanians employed in the sector, in government revenues, and will see improvements in the infrastructure and social services in areas related to those mines.
“Depending on fiscal policies and regulatory frameworks and mineral commodity prices it is anticipated that several new major mines will be brought into production in the next five years or so. Once they start operating Tanzania will see a major economic transformation,” he said
Mr. Kahama mentioned one of the anticipated mines to start operations soon to be the Mantra’s Mkuju River project, where he noted that there has been intense debate in the country about the development of uranium mines due to fears associated with the inherent radioactive nature of the mineral.
“It would be worth noting that globally as at November 2012, there were about 434 nuclear power reactors. According to the World Nuclear Association, there will be 650 nuclear reactors operating by 2032.
“Accordingly, yearly reactor related uranium requirements worldwide are forecast to rise to between 98,000 tonnes and 136,000 tonnes of uranium by 2035.
“This presents a great opportunity for uranium developers in the country as there will be a ready market for the concentrate (yellow cake),” said Mr Kahama.
In the meantime, both Mantra and Uranex have been engaging the public in awareness campaigns on the facts of Uranium mining in the surrounding communities and far beyond. With these exciting developments, Tanzania will soon be joining the league of African Uranium producing countries.
Mantra’s Mkuju River project in southern Tanzania had an updated resource of 119.4 million pounds of uranium.
According to Mantra Tanzania's Managing Director Asa Mwaipopo, it will take a two-year period for completing construction work before they could start to produce uranium oxide, and placing Tanzania at number three in Africa in uranium production after Niger and Namibia.
In the sidline of the meeting, Mwaipopo mentioned that the project will provide direct and indirect cash flows in Tanzania in excess of $640 million and will provide foreign direct investment (FDI) in excess of $1 billion or equivalent to 4.76 percent of Tanzania's GDP.
Statistics from the TCME report shows that between 1997 and 2011 a total of USD 10.1 Billion worth of minerals were sold by Chamber members, compared to only USD 16.0 million in 1997. The minerals include gold, diamonds, silver, copper and tanzanite.
During 2011, USD 178.6 million was paid as royalties and statutory taxes to the government, while in the same year, community development initiatives amounted to USD 1.51 million compared to USD 1.96 the previous year.
Employment in the formal mines increased from 1781 in 1997 to about 15,000 in 2011 and expected to increase as potential new mines are constructed.
In 2011 TCME members spent a total of USD 441.5 million for local procurement of goods and services compared to USD 440.9 million in 2010, whilesalaries paid from mining operations to Tanzanian employees amounted to USD 87.3 million compared to USD 91.6 million in 2010.
The statistics provide to a large extent the tangible fiscal and social benefits that accrue to the Tanzanian economy which enables government to deliver on important development projects.