Tanzania signs $667m deals with Australian firms to boost mining sector
Tanzanian officials, on Monday, signed contracts worth $667 million with three Australian businesses to harvest graphite and rare earths.
The framework agreements are part of Tanzanian President Samia Suluhu Hassan’s drive to increase the mining sector’s contribution to the country’s GDP to at least 10% by 2025.
The government’s hopes remain bright, as joint venture agreements signed yesterday with three Australian companies, Evolution Energy Minerals, Eco Graf Ltd, and Peak Rare Earths Ltd, are intended to establish Tanzania as a supplier of important and strategic minerals.
The agreements were inked in Dodoma at a ceremony with Evolution Energy Minerals, EcoGraf Ltd, and Peak Rare Earths. “It’s the hope of Tanzanians that the implementation of these projects will start soon and contribute to the economy,” Hassan said.
Because the projects involve the extraction, processing, and transportation of strategic minerals, President Hassan stated that they will raise Tanzania’s profile on the global stage and stimulate economic activity throughout the value chain for the benefit of the people in the Lindi, Songwe, and Morogoro regions, as well as the entire country.
“The sector’s performance has improved significantly as in the short period from July to September 2022 alone, the mining sector’s contribution was at 9.7 percent of total GDP,” she added.
The president also stated that the expansion of the mineral sector was in keeping with the administration’s economic integration policy, with the involvement of artisanal miners increasing from 20% to 40% in the last two years.
“The government will continue to raise its investment in the sector, including improving the speed of electrification of areas operated by artisanal miners so they can use modern mining equipment and improve their efficiency and productivity,” she said, urging the artisanal miners to avoid engaging themselves in mineral smuggling.
According to the leader of the government’s negotiation team, Palamagamba Kabudi, Tanzania will have a 16% share in each of the projects.
“Evolution Minerals and EcoGraf will mine for graphite used in lithium-ion batteries, in projects worth $100 million and $128 million respectively,” Kabudi said.
Western countries are attempting to lessen their reliance on China for rare earths, 17 heavy metals required for electronics such as smartphones, computers, and batteries, as well as cutting-edge technologies that could reduce dependency on fossil fuels. Peak Rare Earths is a partner in the $439 million Ngualla rare earths project in Tanzania’s south-western region.
It said Ngualla is one of the world’s largest and highest-grade deposits of neodymium and praseodymium, which are crucial components of high-strength permanent magnets used in the construction of electric vehicles and wind turbines, according to the company.
“This signals the long journey of partnership between Peak and the government of Tanzania in developing a world class project,” said the company’s executive chairman Russell Scrimshaw.
