Tanzania’s Mining Model Is Starting to Pay Off

In 1967, a Maasai herder called Jumanne Mhero Ngoma stumbled across a clump of unusual violet crystals in the Mereli Hills near the Tanzanian city of Arusha. For his discovery, Ngoma was awarded 50,000 shillings – about $22 in today’s money. However, the rights to sell the mineral were awarded to Henry B. Platt, vice president of the American jeweller Tiffany and Co and the great-grandson of its founder, Louis Comfort Tiffany. Platt named the stone ‘Tanzanite’ and boasted in a marketing campaign that the jewel could only be found in two places: Tanzania and Tiffany’s.Between 1967 and 1971, an estimated 2 million carats of Tanzanite were mined in Tanzania, sold almost exclusively by Tiffany’s. Today those stones could be worth up to $1.2 billion.The story of Tanzania’s mineral wealth being siphoned off by external agents is not unique in Africa. What is interesting is how the country is rebalancing the odds in favor of ordinary Tanzanians.Over the past two decades, Tanzania's mining industry has undergone not only rapid growth but major diversification. In the mid-2000s, minerals overtook tourism as Tanzania’s leading source of foreign currency. Since 2021, mining-related tax and royalty revenue has more than doubled. Gold exports grew by 38.2% last year to a record $4.7 billion, and mining’s overall contribution to GDP passed 10% for the first time. Beyond graphite and gold, mineral sands mining is now underway at Fungoni-Kigamboni and Tajiri, with a new processing plant under construction in Tanga. Additionally, a government-approved niobium project is underway at Panda Hill, expected to make Tanzania a top four global producer. Since 2017, Tanzania has rewritten the rules governing mining, ensuring that both the Tanzanian people and mining companies benefit from the country’s mineral wealth. Amendments to the Mining Act granted the government a 16% non-dilutive, free-carried interest in large-scale mining licenses. Local content rules require that Tanzanian firms hold minimum equity stakes in both mining ventures and their service supply chains. President Samia Suluhu Hassan has branded this approach ‘sovereign pragmatism’, replacing dependence on aid with trade and investment. The state is now acting as a direct participant in mineral wealth, rather than a royalty collector. Investors also point to improvements in land titling and judicial efficiency as reasons Tanzania has become easier to operate in. For a country with a history of resource nationalism, there were concerns that changes to the Mining Act would scare investors away rather than precipitate a minerals boom. However, Tanzania's careful engagement with the private sector and the global drive for critical minerals have encouraged more firms to partner with the government. Over the last four years, Tanzania’s mining sector has attracted roughly $3.3 billion in private investment.The government’s stated ambition is to keep more of the mineral value chain within its borders. A promising test case is the Kabanga nickel project, one of the world’s largest undeveloped nickel deposits. A US government-backed consortium, Orion CMC, bolstered by Abu Dhabi's L'imad Holding, is nearing a final decision to develop a local refinery to produce battery-grade nickel for use in electric-vehicle batteries and other modern technologies.The syndicate is negotiating a $500-600 million minority stake in Kabanga as Washington attempts to reduce reliance on China for critical minerals. The deal’s success would prove Tanzania's ability to simultaneously encourage international private-sector investment while ensuring that more value is captured for Tanzania's people through jobs and additional tax revenue.Despite the mining sector’s overall strong momentum, two Western-linked graphite projects have faced some recent challenges. Following a decade of setbacks, Nachu, which had once been promised a binding offtake agreement with Tesla, was folded into a Nasdaq-listed company whose core business was freeze-dried sweets. Mahenge, which sits on the world’s second-largest graphite reserve and has an established and reputable international syndicate behind it, has repeatedly had its investment decision pushed back, most recently to November 2026. However, the delays facing Nachu and Mahenge are common among fast-growing mining jurisdictions. As the saying goes, Rome wasn’t built in a day, and Tanzania’s mining industry won’t be either. None of this diminishes what Tanzania has achieved. A country whose mining industry was, until recently, best known for a gemstone it barely profited from is now setting its own terms with the world’s largest mining and battery players and is still attracting investment. This is the outcome of a government willing to make bold regulatory choices while planning for the long term. Under President Samia’s stewardship, that consistency has paired with savvy outward engagement, sampling Chinese, US, and Gulf capital simultaneously rather than betting on a single partner. This diversification protects Tanzania from being at the mercy of any one market or power.The unresolved question is not whether Tanzania’s model works, but how fast Western financing structures can adapt to match it. If Kabanga’s final investment decision lands on schedule, it will be concrete proof that the country has built something durable; not just a mining boom, but a regulatory template for other resource-rich nations to learn from.By Cyril Widdershoven for OIlprice.comMore Top Reads From Oilprice.comVenezuela Helped Build OPEC. Now It May Help Break It ApartQatar Extends Force Majeure as Hormuz Crisis Still Blocks LNG TrafficMIT Uses AI to Challenge a Century-Old Process for Mass Ammonia Production