MINERAL INSIGHT: Strategic Questions Shaping Tanzanias Mineral Value Addition Agenda

• What is the scale of economic opportunity from mineral value addition in Tanzania?
• Minerals and products which present the highest potential for value addition
• Key opportunities for investment in the mining value chain
• What key interventions are necessary to unlock the identified opportunities?

1.0 Introduction

The recently released report, “Tanzania Minerals Value Addition Perspective,” is a landmark document outlining a new strategic direction for Tanzania’s mineral sector. This report, a collaborative effort involving Manufacturing Africa, and funded by UK aid from the British people, provides a critical roadmap for the country to transform its role in the global mineral value chain.

As one of the stakeholders that contributed perspectives through workshops and one-on-one engagements, Breakthrough Attorneys has prepared this summary to highlight the strategic opportunities that can position Tanzania as a leader in mineral value addition.

2.0 What are the overall opportunities?

The report identifies 14 high-impact opportunities across 11 prioritized minerals, including gold, rare earth elements (REEs), graphite, nickel, iron, copper, cobalt, limestone, phosphate, and potash, with the potential to generate an estimated $7.2 billion to $11.7 billion annually for Tanzania. This growth could contribute an impressive 9% to 15% increase in GDP over the next seven years. These opportunities are strategically categorized based on their ease of implementation, level of investment, risk management, and market potential:

2.1 No-Regret Opportunities:

The production of gold bars and jewelry can be pursued quickly due to existing high production levels and expanding local refining capacities. A key step is obtaining London Bullion Market Association (LBMA) certification which will allow Tanzanian gold to be recognized and traded on the global market.

2.2 Big Bets:

This category includes opportunities in spherical graphite and rare earth elements (REEs) that are critical for the global energy transition. While these require substantial financing and technology partnerships, Tanzania’s significant reserves position it to become a key player.

2.3 Low-Hanging Fruit:

Opportunities such as the production of cement, ceramics, glass, and paper are relatively easy to implement, driven by strong local consumption and expanding regional demand.

2.4 Opportunistic Plays:

The feasibility of opportunities like the production of cobalt and nickel sulfate, NPK and DAP fertilizers, and steel and copper cathode/wire depends on evolving domestic supply and shifts in global market conditions.

3.0 What actions are required to unlock these opportunities?

The report highlights the urgent need for targeted interventions in six key areas to fully realize these potentials. While policymakers, investors, and regulatory authorities play a central role in implementing these interventions, private sector stakeholders can also turn them into strategic opportunities by developing innovative solutions. These include advancing infrastructure through public–private partnerships (PPPs), facilitating Talent Exchange and Technical Support through Technical Support Agreements (TSAs) for Primary Mining Licenses (PMLs), and mobilizing financing mechanisms for mining projects.

3.1 Develop a Targeted National Strategy

Global demand for graphite—the key material for battery anodes in electric vehicles and energy storage systems—and for rare earth elements (Nd-Pr)—vital for high performance magnets in wind turbines, EV motors, and advanced electronics—is accelerating rapidly. These minerals sit at the center of the energy transition and offer Tanzania a unique chance to move beyond raw material exports.

To unlock this potential, Tanzania requires a targeted national strategy that links upstream extraction to local value addition. Such a framework should guide investment into processing industries, incentivize supply chain linkages, and align with domestic manufacturing needs. Complementing this, a workforce development plan is critical to close skills gaps and build the human capital necessary to anchor a globally competitive mineral value chain.

3.2 Enabling Business Environment for Value Addition

Value addition requires an investment climate that rewards long-term commitments. Tanzania can strengthen this by expanding eligibility for Special Economic Zones (SEZs) to companies aligned with its industrialization priorities. SEZ status brings incentives such as 10-year tax breaks, which are vital to offset the high upfront costs of mineral processing. A predictable, transparent regulatory environment will give investors confidence to pursue vertically integrated operations that deliver both economic and employment benefits locally.

3.3 Establishing and Building Strategic Partnerships

Advanced processing such as spherical graphite production or rare earth element (REE) separation is capital and technology intensive, and Tanzania cannot build these capacities alone. Partnering with global leaders is therefore essential to unlock domestic value addition. Strategic partners include BTR (BTR New Energy Materials, China), which specializes in graphite processing for lithium-ion batteries; POSCO (Pohang Iron and Steel Company, South Korea), a steel producer also investing in battery materials; MP Materials (USA), focused on REE mining and magnet production; and Lynas Rare Earths (Australia), a leading supplier of rare earths for electronics and clean energy technologies.

These partnerships are not just about investment, they are critical to transfer technology, build local skills, and ensure fair value retention within Tanzania. Encouragingly, companies such as BTR and POSCO are already active in Tanzanian graphite projects, demonstrating strong international interest. By carefully structuring collaborations, Tanzania can convert its raw mineral wealth into high-value industrial products, positioning the country as a competitive player in the global energy and high-tech supply chains.

3.4 Attract Regional and Global Investors

Unlocking value addition requires significant capital inflows, often for projects with higher risk profiles. Tanzania can attract this investment by creating de-risking financial instruments such as preferential loan terms, guarantees, or blended financing in collaboration with regional partners. Simultaneously, Tanzania must address fiscal competitiveness. Current terms such as a 16% free-carried interest, 30% capital gains tax, and VAT on consumables are higher than peer nations and risk discouraging investment. Reviewing these to align with regional benchmarks could unlock larger pools of international capital.

3.5 Infrastructure and Industrial Ecosystems

Without reliable and affordable infrastructure, value addition will remain constrained. Tanzania should prioritize targeted infrastructure investments, including roads, rail, and port connectivity in mineral-rich regions like Lindi and Mtwara.

Energy reliability is equally critical; as mineral processing is highly power-intensive. Purpose-built industrial parks and co-located industries can lower costs and enhance competitiveness. For example, situating spherical graphite facilities alongside steel plants could allow shared waste management, reducing operational costs and environmental risks.

3.6 Opportunistic Plays: Timing the Market

Beyond these five areas, Tanzania can also capture immediate wins in select markets. Fertilizers (DAP and NPK) present strong local and regional demand, with current imports of $458 million annually—an opening for domestic production. Finished steel products, currently imported at over $1.2 billion, could be substituted with local production once upstream and infrastructure challenges are addressed. Copper cathodes and wire also hold promise, provided production scales up beyond the current 35,000 tonnes to reach economic viability. These opportunities require careful timing and market awareness, but they could deliver significant economic gains.

4.0 Conclusion

This summary is intended as a foundation for continued engagement among stakeholders across government, industry, and civil society. By implementing targeted strategies such as a national framework for priority minerals, enabling business environments, strategic partnerships, investment attraction, and infrastructure development Tanzania can move beyond raw mineral exports toward full beneficiation, capturing more value locally. Doing so could generate an estimated $7.2–$11.7 billion annually, contributing 9–15% to GDP over the next seven years, while creating jobs, building technical skills, and positioning the country as a regional leader in mineral value addition and a key contributor to the global critical mineral supply chain.

 

Important Notice:

This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.