Tanzania has awarded licenses for the construction of a mineral smelter and two gold refineries to Chinese firms, in a move to boost revenues from the country's mining industry. The two gold refineries will be owned by China's Anhui Foreign Economic Construction Group and Tanzania's state-owned mining corporation, STAMICO. The metallurgical smelter will be built by China's Guangxi Runxiang Machinery Equipment Manufacturing Co.
According to the Minerals Minister Doto Biteko, the Chinese firms will also be awarded licenses to operate mines in Tanzania. The minister expressed confidence that the move would help Tanzania to generate more revenue from its mining sector.
Tanzania is Africa's fourth-largest gold producer, and the mining sector is a major contributor to the country's economy. In 2020, the country produced 40 tonnes of gold, worth $2 billion. However, the government has been working to increase its share of the value generated by the mining industry, which has traditionally been dominated by foreign companies.
The decision to award licenses to Chinese firms comes amid a growing trend of Chinese investment in Africa's mining sector. According to a report by McKinsey & Company, Chinese investors have been involved in over 140 mining projects in Africa in the last decade.
The involvement of Chinese firms in Tanzania's mining sector has not been without controversy, however. In 2017, the government imposed a ban on exports of unprocessed minerals in an effort to encourage local processing and boost revenues. This move was aimed at curbing smuggling and ensuring that the country benefited from the value generated by its natural resources.
The ban was lifted in 2019, but the government has been pushing for more processing to take place within the country. The involvement of Chinese firms in this process has raised questions about the extent to which Tanzania will benefit from their investment.
The government has sought to address these concerns by requiring Chinese firms to partner with Tanzanian companies in their mining ventures. The local content requirements aim to ensure that Tanzanian companies and workers benefit from the investment and expertise provided by Chinese firms.
In addition to the licensing of the gold refineries and smelter, the Tanzania government has also announced plans to establish a joint venture with China to develop the mineral-rich regions of Mbeya and Rukwa. The project is expected to involve the construction of a railway line and an energy project, as well as the development of mining and agricultural activities.
The joint venture is seen as a key part of Tanzania's efforts to attract foreign investment and create jobs in the country's rural areas. The government has said that it plans to develop the two regions into economic zones that will attract investment in various sectors.
The involvement of Chinese firms in Tanzania's mining sector has been a topic of debate in recent years. Some have raised concerns about the environmental and social impacts of mining activities, as well as the extent to which Tanzania will benefit from foreign investment.
However, the government has emphasized the importance of foreign investment in developing the country's mining sector and creating jobs. The licensing of the gold refineries and smelter is seen as a significant step towards achieving these goals, and the joint venture with China is expected to bring further investment and development to Tanzania's mining regions.