Energy and Mining

Tanzania’s energy sector has shown signals of growth in recent years, with established domestic gas production and ambitious plans to scale up. Offshore gas reserves are sufficient to have prompted a proposal for a two-train liquefied natural gas (LNG) project in Lindi, while there is ample potential onshore around the Rift Valley based on commercial-scale deposits in similar terrain as in neighbouring Uganda and Kenya. Infrastructure is always a challenge for new producing countries, but Tanzania has constructed mid-stream processing plants and pipelines to leverage existing production, and has capacity to spare for new projects. With midstream infrastructure and ample reserves in place, the challenge of attracting larger investment – such as for the Lindi LNG plant – hinges on the ability of the government to maintain a competitive commercial, fiscal, legal and regulatory framework. As the fourth-largest gold producer in Africa and the world’s only source of tanzanite, Tanzania is a major mining destination in the region. It has nine large-scale mines that produce silver, copper, diamonds and coal, as well as major untapped deposits of graphite, uranium and other minerals. The government has begun to review its legislative framework for mining activity as part of efforts to reassess the value of existing projects, increase local revenues and ensure communities benefit from extractive industries. While there is no doubt that tax revenues and licences will be more constricting moving forward, the benefits are likely to include increased revenues for the country and improved governance over the long term. This chapter contains interviews with Kapuulya Musomba, Acting Managing Director, Tanzania Petroleum Development Corporation; and Marc den Hartog, Vice-President East Africa, Shell.