#Tanzania: Economy, Trade, Development

[Mo Rush]

All news and issues related to Tanzania and its economy and trade etc.
I have a particular interest since I have been assigned this country at University which will simulate the WTO bargaining process over the next few months. All help and information welcome.

[African Lion]

Tanzania: Govt On Spot Over Biofuel Production

The Citizen (Dar es Salaam)

23 July 2008
Posted to the web 24 July 2008
More than 600,000 hectares of fertile land suitable for food production in the country have been hived off for the cultivation of bio-fuel crops, an independent study by a land use research organisation has revealed. More...http://allafrica.com/stories/200807240051.html


This always depends on how much arable land you have. If Tanzania has enough arable land then it can produce food and fuel if not, its "stomach over tank".

[Kenguy]

This wont be easy, a number of articles tend to be writen in Swahili but i'll try.


Firm to produce solar kits

By The Citizen Reporter

An Arusha-based company has embarked on an ambitious project to produce and export solar energy.

The Pen Holding Company plans to obtain an incubator for the production of solar energy for both the domestic and export markets.

Company officials, who attended the recent Sullivan Summit in Arusha with the intention of selling the idea to potential investors, said the product would be used for cars and boats, in houses and spacecrafts.

The company exhibited some of its products at the Summit, which included wind generator systems, air wind systems, solar water pumps and wind water heating systems.

Most of its products are designed for domestic use, while others find a market in hotels and lodges, which require back up power supply.

One of the directors, Mr Patrick Ngowi, said they were currently looking for investors with the interest and technological capability to join the project.

He said his company already boasts of international partners including the Chinese based Himin Energy Group and Suntech.

Others are in Taiwan and Hong Kong.

The rising cost of energy, added Mr Ngowi, was among the major stumbling blocks to the development of the country's economy

[Mo Rush]

Heard about some major gold mines..something about Ashanti.

[bantugbro]

Images from the World Economic Forum (WEF) @ Mlimani City, Dar es salaam, Tanzania:
image hosted on flickr

image hosted on flickr

President of the United Republic of Tanzania HE Dr.J.M Kikwete
image hosted on flickr

Prime Minister of Zimbabwe HE Chagerai
image hosted on flickr

image hosted on flickr

Prime Minister of Kenya HE Raila Odinga (Agwambo)
image hosted on flickr

President Dr. Kikwete and Prof. Anna Tibaijuka former Director of UN Habitat
image hosted on flickr

Debate after debate....
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..and then brainstorming some...
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President of Zambia HE Rupia Banda
image hosted on flickr

President of South Africa HE Jakob Zuma
image hosted on flickr

President of Zanzibar Dr. Shein, UN deputy secretary Dr. Asha Migiro(Tanzanian) and HE R. Banda President of Zambia
image hosted on flickr

Its Schwab time....
image hosted on flickr

[bantugbro]

Tanzania, Mauritius to boost investment, trade
Tanzania and Mauritius have entered into an agreement that would see improvement in cross border investments between the two countries.
The agreement was reached after the signing of Memorandum of Understanding (MoU) between Tanzania Investment Center and Board of Investment Mauritius (BOI) during the Investment Workshop in Dar es Salaam yesterday.

The TIC Executive Director, Mr. Emmanuel Ole-Naiko said that the MoU would among other things develop synergies to complement each other on investment areas that need to be improved.

“We will do whatever it takes to learn from Mauritius to improve Tanzania ranking in the Doing Business Report which is currently 128 in the 2011 index and 15 in the Mo Ibrahim Index,” he said.

Mauritius is now an icon in the investment field as depicted in various reports. In Doing Business Report 2011 prepared by the World Bank that carried the theme “Making a Difference for Entrepreneurs”, Mauritius ranked number 20 out of 183 Economies in the Global Ranking of Doing Business.

Global Competitiveness Report ranked Mauritius at number 125 in 2010/2011 while the 2010 Mo Ibrahim Ranking Index of Africa Governance ranked for three years running at number one out of 53 African economies.

Mr. Naiko thanked the Board of Investment Mauritius for choosing Tanzania as its gateway for investment and trade in this part of the world.

“The action taken by Mauritius to make Tanzania its gateway will not only link our business people of Mauritius and Tanzania but worldwide as well,” he noted.

He explained that foreign investors can help to bring about greater integration not only with markets elsewhere but also within Africa itself of which by all standards is a huge market by itself.

According to Naiko, presently this huge market is underutilized because trading

between African countries is between 10 to twelve percent only; compared to 40 to 60 percent between Africa and the North.

The Tanzania Deputy Minister of Industry, Trade and Marketing, Mr. Lazaro Nyalandu said Tanzania has a lot to learn from Mauritius and that the government is doing whatever is needed so that to improve investment and cross border trade in all regional cooperation.

“Strategically, Tanzania is better positioned to do well and benefit from various regional cooperation we are engaged in—we need to work hard, networking and forge more alliances,” he said.

Mr. Nyalandu said that Tanzania is now more than ready to leap frog economically and become powerful and giant in the region and assured Mauritius’ business delegation and government officials of mutual working relationship once they establish business and investments here.

On his part, the Mauritius Minister of Industry and Commerce, Mr. Showkutally Soodhun said that the signing of the MoU will go a long way in aligning the two investment agencies to global best practices in investor targeting, investment promotion, investment facilitation, investment aftercare and policy advocacy.

“It will help to develop business relationship between the private sectors of our two friendly countries in area of investment, trade, education and tourism,” he said.

Mauritius is promoting an Outward Investment Strategy where many of her companies have invested in Africa, India, Bangladesh, China and Europe.

Since its independence from Britain in 1968, the country has grown from an underdeveloped economy, dependent only on sugar with a GDP per capital of 250 USD into today a relatively modern and diversified economy, with more than a dozen robust and vibrant clusters and a GDP per capita of around 7,500 USD.

Source:
http://www.tic.co.tz/TICWebSite.nsf/...0?OpenDocument

[bantugbro]

TIC sees agriculture as promising

TANZANIA can become a food basket for African continent if investments in the agricultural sector especially through irrigation will be fully implemented.

The country has a potential for attaining sustainable irrigation development to assure basic food security, improve the national standards of living and also contribute to economic growth of the country.

The Tanzania Investment Centre (TIC) Executive Director, Mr Emmanuel Naiko told the ‘Daily News’ over the weekend that the centre will have more focus on the investment in irrigation farming this year.

“We want to attract investors who will either invest in both agriculture and irrigation infrastructures or invest in irrigation infrastructures and become service providers to farmers,” he said.

The centre has been able to attract investments in cash crops namely Kilombero Sugar, Mtibwa Sugar, Kilombero Rice and Kagera Sugar as some of the big projects in the sector so far.

“With 4,500 hectares, Kilombero has created more than 7,000 out growers who are now providing 45 to 50 per cent of sugarcane supply for sugar production. The investor invested 20 million US dollars.

Out growers have developed from 25 to 200 producing eight tonnes per hectare, from one to two tonnes per hectare,” he elaborated.

Mtibwa Sugar is another area of success in the agricultural investment so far, which has more than 4,500 out growers who supply about 40 to 45 per cent of sugarcane for sugar production.

Mr Naiko also said a recently established company in Kagera has created more than 300 outgrowers and are currently supplying 2 per cent of sugarcane to Kagera Sugar and production is expected to hit 1,000 tonnes in the next two years.

“Our focus now on food crops, a sector which can make Tanzania a food basket for the African continent,” he said.

In view of existing water, land and socio-economic considerations, irrigation potential is estimated to be 29.4 million hectares with varying degree of possible irrigation.

Out of this potential, 2.3 million hectares are of high potential, 4.8 million hectares of medium potential and 22.3 million hectares of low potential.

Mr Naiko said the visit by Saudi Arabia's King Abdullah's son, who toured the country last year seeking to invest in dairy farm, rice and other cereals, brought new hope that investment would have greater impact on the economy.
Source: http://www.dailynews.co.tz/home/?n=16043&cat=home

[bantugbro]

Illovo Sugar to build $45m distillery in Tanzania

The South African based sugar producer, Illovo Sugar Ltd is set to inject $45 million into a new distillery unit at its Tanzania subsidiary, effectively boosting its alcohol production.
Mr Graham Clark, Managing Director of Illovo Sugar Ltd told The East African Business week in Dar es Salaam last week that the company expects production to start by May 2013.
Officials said the funds to be pumped into Kilombelo Sugar Company should raise the firm's production of portable alcohol by 12 million litres annually.
The improved capacity is expected to help Kilombelo Sugar fight off growing competition in the alcoholic drinks industry where other breweries have also raised their production capacities.
Clark said the alcohol will be produced from the fermentation of molasses, a by-product of the sugar manufacturing process, which would allow the group to capture its maximum value and to bypass a growing number of challenges relating to the current export of molasses to world markets.
"We have created an opportunity in Tanzania to produce ethanol from molasses and we will invest in an on-site production facility to turn the molasses into high-value alcohol," he said.
The exports of the products will also be undertaken within the East African Customs Union, taking advantage of Illovo's existing strong regional customer base.
Illovo Sugar is also expected to soon embark on an exercise to find a suitable firm to construct the plant.
Illovo said that an environmental impact assessment has already been approved by the Tanzanian Government.
The firm said that Vinasse, a by-product of the alcohol production process, is to be evaporated to produce a potassium-rich concentrated molasses solid product to which the balance of nitrogen and phosphates will be added to produce a liquid fertiliser for application on Kilombero's cane fields.
The distillation column bottoms and evaporator condensate are to be treated to below legal discharge levels for return to natural water courses.
Power requirements for the distillery will be provided largely by Kilombero's own sugar factories which utilise cane fibre residue, known as bagasse, as a bio-renewable fuel feedstock in the boilers to generate electricity.
Illovo's long term plans include starting fuel and potable ethanol production in Zambia and may consider similar projects in Malawi.15 million litres of potable ethanol plant are also being considered in Mali where Illovo expects to start production in 2014 or 2015.
The Serengeti Breweries Limited (SBL) has also invested over $40 million at the 500,000 hectoliters per year-new plant in Moshi, Kilimanjaro region in Northern Tanzania boosting its beer production by 50%.
According to statistics available, the firm has a capacity of producing 180,000 hectolitres per month (2.2 million hectolitres per annum).

http://www.busiweek.com/11/opportuni...ry-in-tanzania

[bantugbro]

Tanzania to triple sisal exports

The Tanzania Sisal Board (TSB) plans to increase both production and productivity of sisal crop whose prices have been escalating in the local and international markets in the recently years.
TSB said sisal products are set to increase from 24,600 tons as of last year to over 200,000 tons by 2020. Speaking to the EastAfrican Business Week during the 35th Dar es Salaam International Trade Fair (DITF) , the TSB Quality Assurance Officer, Mr. Olivo Mtung'e said the global demand for sisal exceeded by far the supply, pushing up prices as a result.
"The global demand was now 230,000 tones of sisal as of last year, against the supply of about 130,000 tones only to the global market," said Mr. Mtung'e.
Mr. Mtung'e said that for the time being, local production remains low with the country producing about 25,000 tons as of last year, up from 21,000 tons in 2009. He further added, the local demand for sisal is increasing fast because of many small entrepreneurs who produce handcraft products from sisal.
The sisal board envisaged increasing the size of land under sisal cultivation from the current 45,000 hectares to about 130 hectares, with productivity of over one tone per hectare.
According to the sisal board, the current productivity per hectare averages some 700 kilogrammes.
Minister for Industry, Trade and Marketing, Dr Ciril Chami said in order to increase the industry's production and productivity, Tanzania plans to involve small scale growers to the production processing. According to Dr Chami, the planned engagement of small out growers will boost production of the cash crop.
He further said, the governing through sisal board is consulting the Small Industries Development Organisation (SIDO) to have small sisal processing machines for individual sisal growers.
The TSB's Senior Quality Assurance Officer, Mr. Yunus Mssika said, the board members set the target during their annual general meeting last April, this year.
Mr. Mssika added, the demand of fibre has increased rapidly both at local and international markets.
"We are still not able even to meet the local market demand of sisal fibre and its products since the production is minimal," said Mr. Mssika
The sisal board pavilion was among top winners at this year's DITF competition for earning the country more foreign currency through exports.
According to Minister for Finance and Economic Affairs, Mr. Mustafa Mkulo, last year, the country's earned $ 10.4 million from fibre and $ 8.3 million from sisal products exports. China and Saudi Arabia are leading the market of fibre while Kenya and Uganda import much of the sisal products like bags, ropes and mats.
"Much of our sisal is being exported as fibre because producers earn more than manufacturing the products," Mr Mssika said.

He said it is an undeniable fact that the agriculture sector faces the financing problem since most of commercial banks are unwilling to provide low interest rate credit to the sector. When presenting the 2011/12 budget estimates, Minister Mkulo said that, in order to boost agriculture outputs, there are some funds which have been allocated to establish agriculture development bank.
Minister Mkulo said, an agriculture lending window which is currently at Tanzania Investment Bank (TIB) with more than Tsh50 billion ($32.1m)seed money, will also relocate to the new bank that will offer farmers and agro-processors low interest long term loans to finance agriculture projects.
According to Executive Secretary of the Sisal Association of Tanzania, Mr. Raphael Ngalondwa, the rising sisal prices in the world market to $ 1,500 per ton has reportedly resulted into some local sisal processors to export the cash crop in its raw form. "The prices of sisal in the world markets have become so attractive that the processors have ceased the processing and they are exporting sisal fibers," said Mr Ngalondwa and adding, "This is worsening the shortage of raw materials for local entrepreneurs who make handcrafts."
Planning and Sales Manager with Amboni Spinning Mill, Mr. Semwaiko Robert said, researches have already been conducted to enable 100 percent use of the sisal in the country.
"It has been scientifically proven that sisal can produce good juice, power, fertilizer, animal feeds, human medicines," said Mr. Robert Global production of sisal fibre in 2007 amounted to 240 thousand tons of which Brazil, the largest producing country, produced 113,000 tons.
Tanzania produced approximately 37,000 tons, Kenya produced 27,600 tonnes, Venezuela 10,500 tonnes and 9,000 tonnes were produced in Madagascar.

http://www.busiweek.com/11/news/tanz...sisal-exports-

[bantugbro]

Tanzanian Lawmakers Approve Super-Profit Tax

Source: Bloomberg, David Malingha Doya (6/14/11)
"IMF backs an additional levy on mining projects with 'particularly high' returns."

Bloomberg, David Malingha Doya

Tanzanian lawmakers approved a five-year development plan that includes a proposal for a so-called super-profit tax for mining companies, an official in the presidency said.

"The plan has been passed by Parliament," Stephen Wassira, minister of state in the president's office in charge of social relations and coordination, said by mobile-phone text message today. "What follows is to start implementation."

Wassira didn't immediately respond to a question about whether approval of the five-year plan meant the proposed levy would be implemented. Mines Minister William Ngeleja referred questions on the tax to Finance Minister Mustafa Mkulo, who didn't answer his mobile phone when called for comment.

Tanzania vies with Mali to be Africa's third-biggest gold producer and is the world's only known source of the blue gemstone tanzanite. The country's Planning Commission last week published a document that said it may be "optimal" to introduce a super-profit tax in the mining industry as a way to fund a proposed 42.9 trillion-shilling ($27B) economic- development plan. It said the levy may be appropriate "considering the increasing trend in mineral prices."

The commission cited data that showed gold exports from the East African country increased to $1.5B, or 7% of gross domestic product, from $500M over the past five years, while annual government revenue from sales of the metal remained at $100M, or 0.5% of GDP.

The International Monetary Fund's Fiscal Affairs Department held talks with the Tanzania's Finance Ministry about the issue prior to its announcement and backs an additional levy on mining projects with "particularly high" returns, an IMF official said.
http://www.theaureport.com/pub/na/9908

[bantugbro]

SOARING GLOBAL GOLD PRICES BOOSTS TANZANIA GOLD MINING SECTOR

Tanzania’s Mining Audit Agency has said that soaring global gold prices have helped gold miners in the country to break even and start paying corporate tax.

Mr Zephaniah Henry TMAA financial analyst said that Geita Gold Mine and Resolute Gold have recently paid USD 2 million and USD 19.7million as corporate tax respectively after posting quarterly profits. Four mines under African Barrick Gold, ABG would also start to pay corporate tax following the announcement of its profits.

ABG is the largest gold miner in Tanzania it currently operates four mines which include Bulyanhulu, Buzwagi, North Mara and Tulawaka gold mines. ABG’S 2011 gold forecast is between 760000 troy ounces to 800000 troy ounces of gold and Tanzania is vying for the Africa’s third gold producer position.

TanzaniteOne also is paying corporate tax and has already USD 3 million. The price of gold in the world market recently reached USD 1,600 per ounce and is projected to even rise more.

Tanzania has become one of the fastest emerging gold producers in Africa, and is now the fourth largest gold producing country after South Africa and Ghana. Annual production of gold in 2010 was 44.6 tonnes. Gold is Tanzania’s main revenue earner but has huge deposts of Uranium, copper, iron ore among others.

http://www.tradenewswire.net/2011/so...mining-sector/

[bantugbro]

Originally Posted by bantugbro

Tanzanian Lawmakers Approve Super-Profit Tax
"IMF backs an additional levy on mining projects with 'particularly high' returns."

Now i can see this issue has really caught international attention:

Tanzania good as gold, despite tax panic

WHATEVER South America can do, can Africa do better? When it comes to political risk, then yes. Investors, still fresh from muttering about the prospect of a nationalist president in Peru, are now having to contemplate a so-called super profit tax in Tanzania.
At the same time, the central committee of South Africa’s National Union of Mineworkers (Num) has backed the Freedom Charter’s clause on nationalisation. This states the country’s mineral wealth ought to be transferred to the people “as a whole” (while also saying workers stood to lose if talk of nationalisation deterred investors).
It’s not terribly difficult to figure part of the Num’s motives so close to wage negotiations, but the situation in Tanzania is more puzzling. Certainly, the reaction to the proposed imposition of a super tax in Tanzania has verged on excessive. Shares in African Barrick, demerged from Barrick Gold in 2010, declined nearly 9% on Wednesday. Shares in AngloGold Ashanti - which operates the Geita mine in Tanzania (equal to 8% of total production) - were also lower, although most gold shares were under pressure amid general sector weakness.
African Barrick has generated positive cash flow every quarter since it listed and ended the year with some $434m in cash reserves, according to a report by RBC Capital Markets dated June 8. To say this cash flow is a function of super profit performance on a par with the 80% operating margins enjoyed by some iron ore and coal producers – and which have subsequently attracted a 30% profit-based tax from the Australian government - is pushing credence, however.
Quite frankly, gold companies haven’t been producing super profits for a while, which was why Australia specifically excluded the sector from its tax amendments.
Yet if you’re a Tanzanian official interested in participating more in the commodity boom, your eye can’t but be drawn to the type of statistic Bloomberg News identified which was that gold exports from Tanzania increased threefold to $1.5bn in the past five years, or 7% of gross domestic product (GDP), while annual government revenue from gold sales remained at $100m, or 0.5% of GDP.
The problem is, however, that gold sales are a revenue figure while government revenue is actually a share of gold company profits. So while the gold price received by gold mining companies has improved in line with the advance in the gold price - $1140per ounce end-2010 from $420/oz at the beginning of 2005 - profits have not kept the same trailblazing pace, largely due to cost pressures.
In any event, the imminence of a super profit or windfall tax in Tanzania seems premature. The notion of such a tax was identified as part of a five-year plan by the country’s development commission on June 7, but it was conspicuously absent in the national budget speech a day later. The proposal faces opposition party criticism in Tanzania, but it also runs the risk of unhinging regulatory confidence as both African Barrick and AngloGold Ashanti have stabilisation agreements attached to their operations which lock in tax rates.
Stabilisation agreements have been challenged before. One thinks back to Zambia’s attempt to participate more in the copper price improvement in 2007. It overturned First Quantum Mineral’s stabilisation agreement at its Kansanshi copper mine, which had locked in a 0.6% royalty for 15 years in favour of a new 3% royalty.
Michael Sata, a presidential candidate from the Patriotic Front, commented in September that lower royalties should be applied because the higher royalty had only alienated investors. The proposed changes had First Quantum considering legal action and proved messy. For a country which like Tanzania is keen to attract more investment, it seems an unwise move, one assumes.
Peru is an unknown prospect, South Africa continues to bewilder with its fascination with nationalisation, but Tanzania represents a more reliable district, analysts think. “Whilst we would not rule out higher taxes in the future, we do not see the risk to ABG [African Barrick] in this respect being materially higher than in other jurisdictions,” said UK stockbroker Numis in a note on Thursday morning. “We continue to believe that Tanzania is towards the lower risk end of the spectrum.”
http://www.miningmx.com/opinion/colu...-tax-panic.htm

[bantugbro]

Hey now look what ABG have to say:

African Barrick Gold plc

Comment on Reports of Potential Tanzanian Super Profits Tax

We refer to the reports in the media this morning relating to a potential Super Profits Tax on the mining industry in Tanzania. ABG is not aware of any such plans and has not been involved in any discussions or consultation in relation to this, either as ABG or through the Tanzanian Chamber of Minerals (Berlin: HQL.BE - news) and Energy (NYSEArca: JJE - news) . All of our current operating mines are subject to Mineral Development Agreements ("MDAs"), which guarantee tax and fiscal stabilisation for a long-term mining project by reference to the law in force at the effective date of the agreement. These MDAs cannot be amended without our agreement.
http://uk.finance.yahoo.com/news/Afr....html?x=0&.v=1

[bantugbro]

TACKLING PERSISTING POWER CRISIS


TPDC plans Tsh1trn gas pipeline to Dar
*NSSF shows interest as partner

The planned gas pipeline will bring great relief to electricity consumers...But this won't happen any time soon, as it will take 2 years to bulid!

IF and when a planned 'high capacity' gas pipeline from Mtwara Region in southern Tanzania to Dar es Salaam is built, and completed in the next two years as scheduled, this would increase the supplies of natural gas which Dar es Salaam currently gets from the Songo Songo gas deposits in Lindi Region by five times!
The nation's biggest commercial metropolis and de facto is currently supplied with 90-105 million standard cubic feet of gas a day (mmscfd) from Songo Songo. On the planned Mtwara-Dar pipeline becoming operational, the supplies would increase to 515mscfd!
Today, Tanzania has proven natural gas reserves in Mkuranga, Kilwa, Mnazi Bay, Songo Songo and Nyuni.
After experiencing persistent power shortages in recent times, the Government in Dar has embarked upon concrete plans to increase electricity generation from sources other than hydro-power dams on which the country has been relying for 55 per cent of its electricity needs.
One of the measures being taken is the multi-million dollar gas pipeline from Mtwara to Dar es Salaam – and, finally, to Tanga and, perhaps, beyond!
Construction of the pipeline from Mtwara to Tanga is split into three phases under the supervision of the project owners, Tanzania Petroleum Development Corporation (TPDC), following feasibility studies done by Rak Gas LLC, the state natural gas utility of the Emirate of Ras al Khaimah in the UAE.
The studies for the two phases of the project also showed that the project was “environment-friendly.”
Speaking to Business Times in an exclusive interview in Dar es Salaam this week, a senior TPDC economist, Lwaga Kibona, said the project is scheduled “to commence soon, and will be completed in two years...

“The Government is continuing to discuss with various stakeholders, seeking partners. We had prospective investors from China who were interested in the project – but they pulled out due to the recent global economic crisis,” Kibona said.


However, he revealed that the (Tanzania) “National Social Security Fund (NSSF) had already shown interest in partnering (TPDC) for implementation of the project.
“They have stated that they will be ready to provide funds to implement the project, scheduled to be completed within two years,” Kibona stressed.
This would become the third major project in which NSSF has shown interest. The other two – construction of the so-called 'Kigamboni Bridge' across the Magogoni Channel in Dar es Salaam, and a Coal-to-Electricity project in Kiwira, in southern Tanzania – are yet to take off in earnest!
According the TPDC economist, the first phase of the Mtwara-Dar gas project would be laying a 232-kilometre pipeline from Mnazi Bay to Dar es Salaam, at a cost of US$308 million (approximately Tsh492.800 billion).
The second phase would be the laying of a 224km pipeline from Mnazi Bay to Songo Songo, at cost of US$393 million (approx. Tsh628.8 billion).
The two phases of the project are expected to cost Tsh1.12 trillion, about seven per cent of the FY-2011/12 national budget!
That sum is also close to the amount the Government in Dar is planning to borrow from local financial sources in the financial year!
Over and above that will be the cost of the third phase of the project, laying a 224km-long pipeline from Dar es Salaam to Tanga. The TPDC economist says an estimate of the costs has not yet been made.

Noting that it was only relatively recently that Tanzania came to the natural gas consumption world, Kibona said domestic natural gas consumption from July 2004 to June 2011 was valued at US$136 billion in total. The power-generation sub- sector took $114 billion-worth of that total, with the remainder, roughly US$21 billion-worth, going into local industries.

To put that in perspective, the equivalent fuel displaced by use of natural gas during the same period – and, therefore, the savings gained by reducing consumption of imported fuel – was valued at US$4.174 billion. US$3.6 billion of that was in the power sub-sector, and US$0.574 billion in industries.

Kibona also noted that Government revenues from the natural gas sub-sector during July 2004-April 2011 total US$120.876 million (Tsh180 billion).
Government revenue from the Songo Songo deposits alone in July 2004-April 2011 reached US$118.249 million – and US$2.626 million for the Mnazi Bay gas reserves.
In the event, the TPDC official stated, Tanzania was able to 'save' a total of US$3 billion during the period which would have otherwise gone into fuel imports!
“This comes from the savings gained from using natural gas: US$2.8 billion in the power sub-sector, and US$0.2 billion in industries” during the period under review.

With regard to the project for use of Compressed Natural Gas in motor vehicles, Kibona the Corporation has so far been able to convert 36 vehicles from using liquid fuel to gas. Two of the vehicles belong to the Corporation, with the rest belonging to other institutions

Commenting on the programme for household gas supply introduced by TPDC as an alternative to using expensive electricity and wood fuel, Kibona said the project would cost upto Tsh202 billion, targeting 30,000 households and 8,000 vehicles.

“Last year, we retained 50 per cent of the revenue garnered from the natural gas project which was supposed to go the Government. Some of the retained funds would to go into household gas use in the city (Dar es Salaam),” Kibona revealed.
“A pilot study was conducted into distributing gas by vehicles from the Ubungo gas filling station to the Mikocheni Industrial hub. Also, we managed to supply natural gas to the Moevenpick Hotel, Keko Prison and Mgulani Military Barracks, all in Dar es Salaam,” he noted.

Construction of a natural gas pipeline from Ubungo to Mikocheni in Dar es Salaam is expected to be completed this September, at a cost of Tsh4 billion!

“We expect to build a gas pipeline that would connect 13 houses at first; but our target is to reach 57 houses in Mikocheni,” Kibona stated.

The programme, which is being undertaken by TPDC, is also projected to increase three gas filling stations in Dar es Salaam. Currently, there is only one gas filling station in the Ubungo area.
http://www.businesstimes.co.tz/index...news&Itemid=57

[bantugbro]

TACKLING PERSISTING POWER CRISIS


TPDC plans Tsh1trn gas pipeline to Dar
*NSSF shows interest as partner

The planned gas pipeline will bring great relief to electricity consumers...But this won't happen any time soon, as it will take 2 years to bulid!

IF and when a planned 'high capacity' gas pipeline from Mtwara Region in southern Tanzania to Dar es Salaam is built, and completed in the next two years as scheduled, this would increase the supplies of natural gas which Dar es Salaam currently gets from the Songo Songo gas deposits in Lindi Region by five times!
The nation's biggest commercial metropolis and de facto is currently supplied with 90-105 million standard cubic feet of gas a day (mmscfd) from Songo Songo. On the planned Mtwara-Dar pipeline becoming operational, the supplies would increase to 515mscfd!
Today, Tanzania has proven natural gas reserves in Mkuranga, Kilwa, Mnazi Bay, Songo Songo and Nyuni.
After experiencing persistent power shortages in recent times, the Government in Dar has embarked upon concrete plans to increase electricity generation from sources other than hydro-power dams on which the country has been relying for 55 per cent of its electricity needs.
One of the measures being taken is the multi-million dollar gas pipeline from Mtwara to Dar es Salaam – and, finally, to Tanga and, perhaps, beyond!
Construction of the pipeline from Mtwara to Tanga is split into three phases under the supervision of the project owners, Tanzania Petroleum Development Corporation (TPDC), following feasibility studies done by Rak Gas LLC, the state natural gas utility of the Emirate of Ras al Khaimah in the UAE.
The studies for the two phases of the project also showed that the project was “environment-friendly.”
Speaking to Business Times in an exclusive interview in Dar es Salaam this week, a senior TPDC economist, Lwaga Kibona, said the project is scheduled “to commence soon, and will be completed in two years...

“The Government is continuing to discuss with various stakeholders, seeking partners. We had prospective investors from China who were interested in the project – but they pulled out due to the recent global economic crisis,” Kibona said.


However, he revealed that the (Tanzania) “National Social Security Fund (NSSF) had already shown interest in partnering (TPDC) for implementation of the project.
“They have stated that they will be ready to provide funds to implement the project, scheduled to be completed within two years,” Kibona stressed.
This would become the third major project in which NSSF has shown interest. The other two – construction of the so-called 'Kigamboni Bridge' across the Magogoni Channel in Dar es Salaam, and a Coal-to-Electricity project in Kiwira, in southern Tanzania – are yet to take off in earnest!
According the TPDC economist, the first phase of the Mtwara-Dar gas project would be laying a 232-kilometre pipeline from Mnazi Bay to Dar es Salaam, at a cost of US$308 million (approximately Tsh492.800 billion).
The second phase would be the laying of a 224km pipeline from Mnazi Bay to Songo Songo, at cost of US$393 million (approx. Tsh628.8 billion).
The two phases of the project are expected to cost Tsh1.12 trillion, about seven per cent of the FY-2011/12 national budget!
That sum is also close to the amount the Government in Dar is planning to borrow from local financial sources in the financial year!
Over and above that will be the cost of the third phase of the project, laying a 224km-long pipeline from Dar es Salaam to Tanga. The TPDC economist says an estimate of the costs has not yet been made.

Noting that it was only relatively recently that Tanzania came to the natural gas consumption world, Kibona said domestic natural gas consumption from July 2004 to June 2011 was valued at US$136 billion in total. The power-generation sub- sector took $114 billion-worth of that total, with the remainder, roughly US$21 billion-worth, going into local industries.

To put that in perspective, the equivalent fuel displaced by use of natural gas during the same period – and, therefore, the savings gained by reducing consumption of imported fuel – was valued at US$4.174 billion. US$3.6 billion of that was in the power sub-sector, and US$0.574 billion in industries.

Kibona also noted that Government revenues from the natural gas sub-sector during July 2004-April 2011 total US$120.876 million (Tsh180 billion).
Government revenue from the Songo Songo deposits alone in July 2004-April 2011 reached US$118.249 million – and US$2.626 million for the Mnazi Bay gas reserves.
In the event, the TPDC official stated, Tanzania was able to 'save' a total of US$3 billion during the period which would have otherwise gone into fuel imports!
“This comes from the savings gained from using natural gas: US$2.8 billion in the power sub-sector, and US$0.2 billion in industries” during the period under review.

With regard to the project for use of Compressed Natural Gas in motor vehicles, Kibona the Corporation has so far been able to convert 36 vehicles from using liquid fuel to gas. Two of the vehicles belong to the Corporation, with the rest belonging to other institutions

Commenting on the programme for household gas supply introduced by TPDC as an alternative to using expensive electricity and wood fuel, Kibona said the project would cost upto Tsh202 billion, targeting 30,000 households and 8,000 vehicles.

“Last year, we retained 50 per cent of the revenue garnered from the natural gas project which was supposed to go the Government. Some of the retained funds would to go into household gas use in the city (Dar es Salaam),” Kibona revealed.
“A pilot study was conducted into distributing gas by vehicles from the Ubungo gas filling station to the Mikocheni Industrial hub. Also, we managed to supply natural gas to the Moevenpick Hotel, Keko Prison and Mgulani Military Barracks, all in Dar es Salaam,” he noted.

Construction of a natural gas pipeline from Ubungo to Mikocheni in Dar es Salaam is expected to be completed this September, at a cost of Tsh4 billion!

“We expect to build a gas pipeline that would connect 13 houses at first; but our target is to reach 57 houses in Mikocheni,” Kibona stated.

The programme, which is being undertaken by TPDC, is also projected to increase three gas filling stations in Dar es Salaam. Currently, there is only one gas filling station in the Ubungo area.
http://www.businesstimes.co.tz/index...news&Itemid=57

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Tanzania becomes natural gas exporter following to major discoveries

Recent discoveries of natural gas off the coast of Tanzania have taken the East African nation’s total reserves to 7.5 trillion cubic feet, sufficient to allow much needed exports to neighboring countries throughout the region.

Tanzania is discussing with its neighbours the possibility of building a pipeline from the commercial capital of Dar es Salaam through Tanga to Mombasa, Kenya, according Tanzania’s Ministry of Energy and Minerals.

Housing 7.5 trillion cubic feet of natural gas will also aid Tanzania’s own domestic energy crisis.

To date, oil, hydropower and coal are the major source of commercial energy in the country. The biomass energy resource, which comprises fuel-wood and charcoal from both natural forest and plantations, accounts for 93 per cent of total energy consumption.

The electricity sub sector contributes about 0.6 per cent of total energy consumption. Two thirds or 381 MW of Tanzania’s installed capacity is hydro powered. It is reported that Tanzania has an estimated 3800 MW of economic hydro potential capacity.

The Hydropower is prone to draught effects, so some thermal power stations have been installed. There are plans to connect with neighboring countries of Zambia and Uganda to the national grid to boost the supply of electricity.

Droughts over the East Africa region have had severe effects on the electrical power supply. Blackouts and power rationing as a result of low water levels in the hydro dams have forced Tanesco to rely on gas-powered generators and to look increasingly at thermal projects for future capacity increases.

Only three quarters of the country (mainly urban areas) is connected to the national grid. It is intended that the rest of the country, including an estimated 8,200 villages should be supplied with electricity to curb deforestation. In addition there are plans to supply power to Kenya and Malawi from Tanzania.

Tanzania has a per capita electricity consumption of 46/KWh per annum, which is growing at the rate of 11 – 13 per cent. Hence the government is encouraging investment to expand generating capacity, distribution systems and developing indigenous sources of energy.

There are other indigenous alternative sources of energy, which include coal. Tanzania has 1,200 million metric tons, which could provide energy for paper mills, cement factories, agriculture and household consumption, and generation of power.

Wind and solar energy is another source of energy. Very little attempt has been made to utilize this source of energy which could be a viable alternative source to reduce use of wood and oil for heating purposes.

http://www.globalenergymagazine.com/...jor-new-finds/

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India to establish steel mill in Tanzania

Dar es Salaam, Tanzania --- MININGREVIEW.COM --- 27 May 2011 - The Kamal Group of India plans to spend 327 billion shillings ((US$213 million) on establishing a steel mill in Tanzania, according to Indian High Commissioner to the country, Kocheril Velayudhan Bhagirath.

“The facility will have the capacity to produce 700,000tpa of metal and will be the biggest in East Africa,” Bhagirath said in an interview here. “The investment is part of a package of accords being announced by Indian Prime Minister Manmohan Singh, who was scheduled to arrive in the country late yesterday for a two- day state visit.

India is boosting economic ties with Africa amid competition from China, its regional rival, whose trade with the continent totalled US$106.8 billion in 2008, according to Consultancy Africa Intelligence’s website. Trade between India and Africa currently stands at US$50 billion, according to the African Union.

“We are mainly investing in the services industry, while China specialises in infrastructure development and mining,” Bhagirath said. “We are complementing each other in African development cooperation.”

India’s financial interests in Tanzania currently total about US$1.4 billion and that amount may grow by more than US$400 million next year, including the investment by Kamal, he added.

Singh has arrived in Tanzania after attending the Africa-India summit earlier this week in Ethiopia, where he announced that India would offer a US$5 billion credit line over the next three years to help finance economic development on the continent.
http://www.miningreview.com/node/19487

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Tanzania southern railway line starts

DAR ES SALAAM, TANZANIA - The project that is meant to open up the exploitation and development of iron ore industry in Southern Highlands in Tanzania will next year be linked with the 850 kilometer railway line.
The construction of 850-km railway line project in southern regions that will link coal and iron ore projects of Mchuchuma, Liganga and Mtwara port is estimated to cost $1.5 billion.
The government says the construction of the project meant to envisage cargo load from the mines would commence after completion of negotiations between the government and investors in Mchuchuma/Liganga coal and iron ore projects.
Mr. Mr Athumani Mfutakamba, the Deputy Minister for Transport, told the Tanzania parliament that the negotiations between the National Development Corporation (NDC) and SICHUAN HONGDA Corporation would likely be concluded in July.
"I assure the assembly that the Southern railway line would be completed in time and mark the first serious start on the long trial of heavy industrialization through mining of the huge reserves of iron ore and using coal to generate 400MW power for this energy-starved country," said Mr. Mfutakamba.
Speaking with The East African Business Week in Dar es Salaam , analysts said the negotiation between Tanzania and the Chinese Government to start the infrastructure will help to push the project forward.
They advised the government to take the project seriously due to the fact that it is expected to fuel the economy of Tanzania through electricity and job creation.
The Mchuchuma iron ore and Liganga coal reserves in southern highlands in Tanzania, hold not only the master key to bid good bye to the chronic power rationing, but the prospects of creating an estimated 40,000 direct and indirect jobs, spur iron and steel industrialization in Tanzania and to export coal.
This project will be the second biggest single operation since the 1970s when China built the $500 million the 1860-km long Tanzania- Zambia Railway line from Dar es Salaam to Kapiri Mposhi in Zambia.
The Tanzania Government banks on the Mchuchuma/Liganga project, to contribute between 20% and 25% of the country's gross domestic product (GDP).
The Mchuchuma location in south western Tanzania has proven coal deposits of 125.3 million tonnes near the border with Malawi and Mozambique.
It also has proven iron ore deposits of 45 million tonnes in the Liganga area.
These are to be exploited jointly to smelt iron and steel and generate power while stimulating an iron and steel industry in a country whose income is agro-dependent.
The projects, expected to start coming on line in 2012 with the construction of a power plant of 400MW, which although not enough to satisfy the country's electricity demand, will certainly reduce the power deficit.
The Tanzania deputy Minister for Industry, Lazaro Nyalandu said last year the investor in the Liganga/ Mchuchuma iron ore project had set aside Tshs 10t (US$ 6.67b for implementing the project.
http://www.busiweek.com/11/news/tanz...&print=1&page=

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Sichuan Hongda bags coal and iron ore mines in Tanzania

Reuters reported that China's Sichuan Hongda Co Ltd will invest USD 3 billion in a coal fired power plant and two iron ore mines in Tanzania.

Mr Chrisant Mzindakaya chairman of state run National Development Corporation told Reuters that “The Chinese firm was picked from a long list of bidders as the preferred investor after winning an international bidding process. We are now negotiating final details before a contract can be signed.”

Mr Gideon Nassari MD of NDC told reporters “Our aim is to have the contract signed next month in order to pave the way for the actual implementation of the projects.”

The investment involves construction of the Mchuchuma integrated coal mine and thermal power station and an iron ore mine in Liganga.

NDC said the projects would be implemented in a joint venture with the Chinese investors under a public-private partnership.

Financial details of the investment projects were yet to be confirmed.

Mchuchuma, located 800 kilometres west of Dar es Salaam, has identified reserves of 536 million tonnes of coal. The investment in the coal mine would also involve construction of a 600 MW coal-fired power plant.

NDC said early studies indicated that the Liganga area was rich in iron, vanadium and titanium minerals. Reserves are estimated to be between 200 and 1,200 million tonnes, with 45 million already proven through drilling.

Tanzania, Africa's fourth largest gold producer with reserves of uranium, nickel and coal, passed a new mining law last year requiring the government to own stakes in future mining projects and mining companies to list on the Dar es Salaam Stock Exchange.



Other bidders included Nava Bharat (Singapore) Pte Ltd, STX Corporation of South Korea, US power company AES Corporation and India's Sarda Energy & Minerals Ltd.

http://www.steelguru.com/raw_materia...ia/186999.html

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Tanzania eyes $400 mln uranium mine in 3 yrs

DAR ES SALAAM, July 1 (Reuters) - Australian-based miner, Mantra Resources plans to build a $400 million uranium mine in Tanzania within the next three years, a cabinet minister in the east African country said on Friday.

The government will allocate 34,532 hectares of land inside a world heritage game reserve to the Australian uranium miner for the project, Tanzania's Natural Resources and Tourism Minister Ezekiel Maige said.

Tanzania has at least 54 million pounds of uranium oxide deposits and expects to start mining some of the minerals.

"Mantra Tanzania Limited, an affiliate of Mantra Resources of Australia, plans to construct the uranium mine in the Selous Game Reserve," he told Reuters.

The project will have an annual gross turnover averaging $250 million for 15 years, he said.


Tanzania passed a new mining law last year that increases royalties paid on minerals and requires a government shareholding in future mining projects.

Maige said the company was now seeking clearance to build the mine in the game reserve, which is a world heritage site.

The minister said Tanzania has sought approval from U.N. world heritage body UNESCO to re-demarcate the territory of the Selous Game Reserve, one of the world's largest wildlife sanctuaries, to allow the uranium mine to be set up.

"Tanzanian laws allow high value natural resources such as oil, gas and uranium to be mined in game reserves. But since the Selous is a world heritage site, we have officially notified UNESCO about our plans," he said.

"The proposed land to be removed from the Selous to pave the way for the mine is just 0.69 percent of the total land surface of the game reserve. We expect to get final UNESCO clearance on the project by June 2012."

Maige said Selous would benefit from an expected income of $5 million in annual fees from the uranium mine against the game reserve's current annual earnings of around $500,000, which would be used in the conservation of the wildlife population.
http://af.reuters.com/article/energy...BrandChannel=0