Last February, the Ministry of Industries and Trade, through the Deputy Minister, Mr Exaud Kigahe, made a very important announcement. He reported in Parliament that the implementation of the Liganga iron ore project would commence in the 2025/26 financial year. This announcement was significant for two reasons.
Firstly, the Liganga iron ore deposits were discovered in 1952 by the Geological Survey of Tanganyika, as it was known at that time. The prolonged delay in implementing the project was due to funding and infrastructural constraints. That the project is now set to take off is remarkable and deserves commendation. Better late than never, as the old saying goes.
Secondly, the iron deposits are substantial, amounting to a whopping 1.2 billion metric tons, which will position Tanzania as the largest iron-producing country in Africa, second only to South Africa. Iron is the cornerstone of industrial development. It forms the backbone of heavy industries such as steel production, machinery, shipbuilding, etc. It is also crucial in infrastructure development projects such as bridges, railways, and skyscrapers, among many other applications.
The Project is Now Set to Take Off
“The project is now set to take off is remarkable and deserves commendation. Better late than never, as the old saying goes.”
Now that we have reached this point, what should Tanzania do to leverage its iron ore resources to maximise the benefits for industrial development?
Four Issues Need to Be Addressed:
- Development of a Skilled Workforce
- It is of paramount importance to develop a skilled workforce.
- Thankfully, the University of Dar es Salaam, through its School of Mines and Geosciences, is already offering courses in metallurgy and mineral processing.
- Additionally, VETA institutions should incorporate metallurgy and mineral processing into their curriculum.
- Furthermore, partnerships should be established with foreign steel manufacturers to bring in expertise and advanced technology.
- Consolidation of the Local Steel Industry
- Building on the existing 19 steel factories to produce at least 20 million metric tons per annum, up from the current 1.2 million metric tons, is essential.
- In addition, value addition and downstream industries should be promoted by developing industries that rely on steel, such as automotive assembly, shipbuilding, and construction materials.
- Export of High-Quality Steel Products
- Tanzania should aim to export high-quality steel products and position itself as a regional steel supplier, exporting to regional and international markets.
- All highly industrialized countries – the USA, Japan, China, and the United Kingdom – who are major consumers of steel, export and import steel simultaneously.
- Until recently, Tanzania has been an importer of steel, importing 600,000 metric tons per year valued at $1.22 billion.
- The time has come for Tanzania to become a significant exporter of steel globally.
- Incentive Policies
- Consideration should be given to policies such as tax breaks and reduced import duties for equipment and technology in iron processing.
- Local content policies that prioritize the utilization of locally made steel in all projects should be strictly enforced.
- Although it may be disappointing that the SGR project may be completed without utilizing local steel, all is not lost, as there are many upcoming projects that will certainly use our locally produced steel.
Elly Manjale is an economic, business, and management consultant based in Arusha, who writes on economic, business, social, and political issues.
Contact:
📞 +255 371521
📧 Email: emanjale@gmail.com
