TANZANIA COUNTRY ANALYSIS- Final

TANZANIA: Agenda
• Executive Summary
• Country Snapshot
• Infrastructure Industry
• Mining Industry
• Gas Investment
• Conclusion
• Introduction

TANZANIA: Country Analysis
Introduction
• Aveng Manufacturing has identified Tanzania as part of its geographical
growth strategy into East Africa
• Tanzania presents many opportunities for Aveng Man in the infrastructure
sector, natural gas sector and mining
• This is Desktop research prepared for management to enable them to identify
and take advantage of existing and future opportunities.
• This is a dynamic document that will be updated and expanded when the
need arises.

TANZANIA: Agenda
• Introduction
• Mining Industry
• Gas Investment
• Conclusion

Executive Summary
Tanzania is one of the
fastest growing economies
in the East African
Community
• GDP of US$33.23bn (current prices) in 2013E with forecasted growth at an average
of 7.0% from 2014-2019.
• A challenging country to do business in, with a ranking of 145 which is just below
the SSA rank of 142 out of 189 global rankings.
• Tanzania and Mozambique are the only gas producing countries in the region.
• If the LNG export projects advance, the FDI into Tanzania could range between
USD20bn-USD30bn
• Tanzania's mining industry earns a large share of export revenues mainly
attributable to their gold production.
• The sector is forecasted to be under pressure due to gold prices weakening output
as well as due to the lack of new mining projects.
Has vast gas reserves and 2
gas producing fields
Lack of infrastructure is a
major constraint to the
country’s
growth and to foreign
investment.
The fourth largest gold
producer in Africa
• Poor transport and power infrastructure are the major drawbacks to foreign
investment.
• The government has made infrastructure part of its strategic pillar to help support
the country towards greater competitiveness and economic growth.

TANZANI: Agenda
• Introduction
• Mining Industry
• Gas Investment
• Conclusion

TANZANIA: Country Profile
Macroeconomics and Demographics
Macroeconomic Indicators & Demographic Stats
• Gross Domestic Product
• GDP current prices(2013) : USD$ 33.23bn
• GDP growth (2014): 7.0%
• GDP per capita current prices2013): USD$ 663
• Inflation rate(2013) : 7.8%
• Current Account Balance(2013): %GDP -13.3
• Gross Fixed Capital Formation
• %of GDP(2011est): 27.15%
• Population(2014est) : 49.64m
• Population growth rate(2014est): 2.8%
• life expectancy(2014) :61.24years
• Literacy rate(2010): 67.8% (by the age of 15, can
read and write)
• Business languages: English & Kiswahili(Kiunguja)
• Urbanisation rate(2011): 26.7%
• Education expenditure(2010): %GDP 6.2%
GDP and GDP growth
21.37
22.91 23.87
27.86
33.23
38.69
40.24
44.32
48.4
52.76
57.39
2009E 2010E 2011E 2012E 2013E 2014F 2015F 2016F 2017F 2018F 2019F
GDPbn
6.8%6.9%
Tanzania economy is projected to grow by ~7% in 2014 and 2015, with transport, communications, manufacturing and
agriculture being the main drivers of this growth and also by public investment in infrastructure
NOTE: GDP growth rate according to World Bank
Source: The World Factbook (CIA); Tanzania Country Profile 2012/2013 (KPMG); World Bank Global Economic Prospects, IMF World Economic Outlook
12.61%
CAGR (2009-2014)
8.21%
CAGR (2014-2019)
6.0% 7.0% 6.4% 6.9% 7.0% 7.0% 7.2% 6.8% 7.0%
GDP
Growth
(World
Bank)

Economic Profile
GDP Composition by Sector
• Services sector is forecasted to grow by 8% driven by
telecommunications, transport and financial services.
• 2013 growth of the agriculture sector estimated at 4.3%,
driven by increased production of major food crops.
• Strong performance in the mining sector with growth of
7% in 2013 arising from an improvement in production of
Gold and Tanzanite.
Imports and Exports
27.2
25.3
47.5
AGRICULTURE INDUSTRY SERVICES
2012(%GDP)
IMPORTS EXPORTS
• $11.16bn(2013e)
• $10.32bn(2012e)
• Country comparisons
to the world: 96th
• $5.92bn(2013e)
• $5.912bn(2012e)
• Country comparison
to the world: 109th
Partners
(2012)
• China 21.3%
• India 16.3%
• South Africa 6.4%
• Kenya 6%
• UAE 5%
• India 15.2%
• China 11.1%
• Japan 6.2%
• Germany 5.1%
• UAE 4.8%
Commodities
(2013f)
• Oil related products
31.84%
• Machinery 17.49%
• Transport Equipment
11.57%
• Building &
construction
materials 8.34%
• Gold 32.31%
• Tobacco 5.85%
• Coffee 3.23%
• Agricultural
Products 2.54%
Strong performance in the communications and trade sub sectors resulted from increased use of mobile phone services
Source: The World Factbook (CIA); Monitoring African Sovereign Risk: Tanzanian snapshot Q3 2013 KPMG; African Economic Outlook: Tanzania 2014 (AfDB)

Economic Profile
Economic Sectors Economic Co-operation, Regional Integration and Trade
• Tanzania has made significant progress in regional trade
through increased exports to the EAC and SADC regions;
this has enhanced Tanzania's investment and production
capacity.
• The country has bilateral treaties with India,
Netherlands, Switzerland, United Kingdom, just to name
a few
• Relations with its main donors and trading partners are
expected to remain favourable. Its economic ties with
India will continue to strengthen.
• Strong export performance was driven by gold and
service receipts which accounted for 44% of total
exports.
28.7
3.8
9.2 8.9 8.3
10.1
16
8.6
2.4 4
GDP%2012
Tanzania remains an active participant if the East African Community(EAC), Southern African Development Community(SADC), the
Common Market for Eastern and Southern Africa(COMESA)
Source: The World Factbook (CIA); Country Strategy Paper 2011-2015 (AfDB); African Economic Outlook: Tanzania 2014 (AfDB)

Business Environment and Competitiveness
Business Environment Rankings
• Tanzania has been successful with attracting foreign direct
investment despite poor infrastructure and perceived corruption.
• Compared to its neighbours, it is the most competitive.
115
177
102
140
12695
140
137
41
132
119
177
102
146
130
98
141
139
42
134
Starting a
business
Dealing with
contsruction
permits
Getting
electricity
Registering
Property
Getting credit
Protectiong
Investors
paying taxes
Trading across
borders
Enforcong
contracts
Resolving
insolvency
Doing Business Ranking out of 189 Countries
2013 2014
Index Rank
Ease of doing business out of 189 countries(2014) 145
Transparency international Corruption Perception Index(2013) out of 177
countries
111
Strength of investor protection index(0=unfavourable-10-favourable) 5
Logistics Performance Index (out of 160 countries2014) 138
Democracy Score(0=lowest. 10=highest) 5.8
MO Ibrahim Index of African Governance(rank out of 52countires)2014 15
Perception of Governance-regulatory quality: Percentile(0=lowest, 100=highest)
2012
36.84
Perception of Governance- rule of law: Percentile(0=lowest, 100=highest) 2012 34.60
Quality of infrastructure(1extremely underdeveloped,7international standards) 3.0
Corporate maximum tax rate 30%
Tanzania has a number of initiatives, such as the “Business Environment Strengthening for Tanzania program”, to help improve
its business environment.
Source: Transparency International Corruption Perception Index(2013); MO Ibrahim Index of African Governance 2014; World Bank Global Competitiveness Index 2012|13; World Bank Doing
Business Report Tanzania 2014;

Political and Economic Environment
Political Context
• Political outlook is clouded by unrest on the Zanzibar
island which is associated with demands for its secession
and an increase in religious strife on the mainland.
• Broad political stability remains intact due to the
dominance of the ruling party.
• Not expected to face any political threats to stability
despite elections in October.
• Has the best percentile rank in political stability and
absence of terrorism.
• The country is in the advanced stages of preparing a new
constitution, which is expected to be in place before the
October 2015 elections.
Economic Context
• GDP growth strong during 2000-12 period, averaging at
+6.7% pa.; this was above the average for SSA in all but
one of those years.
• Economic growth was based on relative political stability,
adoption of market-oriented policies, improvements in
business regulations and a generally buoyant global
commodity demand.
• The outlook remains good both in the short-term and
over a five-year period, given the continuation of current
policies and development of the offshore and onshore
natural gas industry.
• While the growth outlook is favourable, economic policy
challenges remain in the short-term.
• Inflationary pressures remain high and the fiscal deficit
continues to be large.
• Despite concerns on perceptions of corruption, external
donors continue to provide budgetary support.
Tanzania enjoys political stability however, its dependence on outside markets for investment, exports, and aid exposes it to
external risks.
Source: country Strategy Paper 2011-2015 (AfBD); African Economic Outlook: Tanzania 2014 (AfDB); Tanzania Country Profile 2012/2013 (KPMG)

Political and Economic Environment
STRENGTHS
• Extensive mining resources (gold, gas) and presence of
uranium, coal, iron and oil.
• Upmarket tourism sector.
• Political stability and democratic system.
• International support.
• Strong GDP Growth.
• Foreign investment destination.
• Access to a potentially large market.
• Tanzania has a significant amount of natural gas reserves.
• One of Africa's top tourist destination, with significant
room for expansion.
• Infrastructure spend a priority for government.
WEAKNESSES
• Poverty, inadequate education and health systems
• Poor infrastructure.
• Heavy dependence on international aid and mineral
prices.
• Corruption remains very high.
• Weak structural business environment.
• Fiscal and current account deficit.
• High levels of poverty and low human development.
• Substantial dependence on aid.
• Low infrastructure development.
• Calls for Zanzibar independence
THREATSOPPORTUNITIES
Tanzania's private sector is constrained by several factors such as poor infrastructure, an underdeveloped financial sector and
weak human and institutional capacity.
Source: Monitoring African Sovereign Risk: Tanzanian Snapshot Q3 2013(KPMG); Country Strategy Paper 2011-2015 (AfDB)

Policies and Investments
Policy Trends
• Key objective is to increase spending on infrastructure.
• Infrastructure is a priority area in the budget for
2013/2014 in line with the governments recent initiatives
which identified agriculture, energy, and transport among
six key development areas.
Investing in Tanzania
• There are no laws or regulations to limit or prohibit
foreign investment.
• Political stability provides protection for investors.
• Tanzania offers well balanced fiscal incentives to foreign
investors compared to other EAC countries.
• It has signed double taxation treaties with numerous
countries.
• Investors in Tanzania are guaranteed against nationalism
and appropriation.
• Attractive investment fiscal regime that recognizes that
investors need to recover their investment expenses prior
to paying Corporate taxes.
• There are investment priority areas such as mining &
petroleum, manufacturing, infrastructure and
construction, etc..
• It has a 5.0 score out of 10 on investor protection, ranked
98 out of 189 countries together with Kenya.
Tanzania has a favourable attitude towards foreign investment and has considerable success in attracting FDI.
Source: Tanzania Country Profile 2012/2013 (KPMG); Country Strategy Paper 2011-2015 (AfDB); Tanzania Investment Guide 2014/15; Tanzania Investment Centre; World Bank Doing Business
Tanzania 2014

TANZANIA: Agenda
• Introduction
• Mining Industry
• Gas Investment
• Conclusion

TANZANIA: Infrastructure Industry
Infrastructure overview
Infrastructure Overview
• Poor transport and energy infrastructure are major
constraints to economic growth; they hinder companies
operating in Tanzania as well discourage others from
investing in the country.
• The state of transport, energy, water and port facilities is
very poor.
• The power sector is characterized by high demand in the
face of limited supply; even by the standards of other low
income African countries.
• Despite major investments in the water sector, water
supply and sanitation services remain inadequate.
• The Dar es Salaam port has serious capacity constraints
caused by high traffic growth and poor backward linkages
with inland transport networks.
• The poor condition of the rail sub-sector has caused a shift
of freight to road transport which, in turn, has resulted in
the deterioration of the already crumbling road network
due to movement of heavy goods vehicles.
Infrastructure Developments
• Tanzania has a score of 3.2 out of 7 on quality of overall
infrastructure in 2013/14.
• WEF competitiveness Index ranking of 124 among 148
countries.
• State of infrastructure is very poor with only 24% of the
population having access to electricity.
• Scored 2.3 out of 7 on quality of electricity supply,
ranking.
• Infrastructure is a top priority in the National Strategy
for Growth and Reduction of Poverty.
Infrastructure is one of Tanzania strategy's pillars for supporting the country towards greater competitiveness and a more inclusive
growth.
Source: Africa Infrastructure Country Diagnostic: A Continental Perspective 2010; Country Strategy Paper 2011-2015 (AfDB)

Infrastructure Market
Achievements and Challenges Drivers And Barriers To Growth
• Tanzania's infrastructure levels are very poor and face a lot of challenges
that hinder the country's economic growth.
• Barriers to growth
• Lack of funding in infrastructure
projects is the main constraint to
infrastructure growth.
• Inadequate maintenance to
existing infrastructure.
• Drivers to growth
• Fast growing economy and
diversifying sectors.
• Number of infrastructure
development projects; planned
and on-going.
• Private investment in Tanzania's
infrastructure developments.
Achievements Challenges
Road
transport
• Tanzania has good road sector reforms and
the fuel levy is high enough to cover for
maintenance needs.
• Only 24% of the population lives within
two kilometres of all weather road.
• Fuel levy collection needs to be improved
as only 39% is collected.
Rail and ports • Rail corridor is of strategic importance to
the EAC with Tanzania's corridors being key
conduits for bulk freight.
• Dar es Salaam port is one of the major
container hubs in EAC.
• Poor track conditions ,rolling stock and
signalling systems as well as poor
financial and operational management.
• Poor port capacity and efficiency
problems at Dar es Salaam port.
Power • Potential to become an exporter in the EAC
power pool.
• Low access and unreliable power supply.
• High power supply costs.
ICT • Landing of the fibre optic international
submarine cables in 2009/10 has
revolutionised the market.
• Expanding commercial coverage of GSM
signal and increasing competitive access
for submarine cables.
Air transport • One of the largest domestic air
transportation market in the Sub- Saharan
Africa.
• Terminal and airside capacity problems
and poor safety measures.
Water and
Sanitation
• Low open defecation and advanced
institutional reforms in urban and rural
areas.
• Too much reliance on surface water.
• Under-pricing and operational
inefficiencies.
Tanzania faces a lot of challenges that limit growth in infrastructure, the main one being underinvestment due to funding
challenges.
Source: Africa Infrastructure Country Diagnostic: A Continental Perspective 2010; Country Strategy Paper 2011-2015 (AfDB)

Infrastructure Sectors: Transport
Road Infrastructure
• Tanzania’s roads are generally in a poor state and suffer
even more from overuse.
• Road infrastructure requires investment of Ca.
$200million per annum for upgrading and maintaining
existing roads: this encompasses the integrated roads
programme that aims to upgrade ~70% of the country's
main roads as well as build new roads.
• Fuel levies are high enough to cover for maintenance
needs however there are collection issues.
Air Infrastructure
• Has the largest domestic air transportation market in SSA.
• The only EAC country that allows competition in its
domestic air transport market.
• Rehabilitation of Mtwara airport underway; this consist of
constructing new terminals, the expansion of aprons and
installation of AGL system.
• Expansion of the Julius Nyerere International airport
which will allow for the catering of 6million passengers
per annum.
Unit LIC TANZANIA MIC
Paved Road Density Km/1000km² of
arable land
86.6 47.1 507.4
Unpaved road density 504.7 482.6 1038.3
Paved road traffic Average annual
daily traffic
1049.6 1797 2786.0
Unpaved road traffic 62.6 99.8 12.0
Perceived transport
quality
%firms identifying
as major business
constraints
23.0 14.1 10.7
As part of their sector development goal, Tanzania has a number of planned projects to improve air and road transportation
systems that link centres of economic activity and promote regional trade.
Note: LIC (Low Income Countries); MIC (Medium Income Countries)
Source: Africa Infrastructure Country Diagnostic: A Continental Perspective 2010

Infrastructure Sectors: Transport
Ports Infrastructure
• To relieve Port Dar es Salaam, Tanzania is constructing a
new port 35km from Dar es Salaam; the construction will
include a dry port terminal, truck road access, freight
stations, customs & clearing and forwarding buildings.
• The port will reduce traffic and will include a rail shuttle
transport to existing container yards in Dar es Salaam.
Rail Infrastructure
• Railways are characterised by cancellations, minimal
safety and slow journey times.
• TAZARA signed an agreement with the Chinese to
rehabilitate the railways system: This deal includes
modernising passenger coaches, new locomotives,
supplying track maintenance vehicles and components,
and rehabilitation of the rail line.
• The project will increase capacity, improve reliability and
reduce high cost of transporting goods
UNIT KENYA TANZANIA UGANDA
Traffic density 1000 ton-
km/km
690 510 815
EFFICIENCY:
Locomotive availability
% 44.8 74.2 69.5
TARIFFS:
Average unit tariff.
Freight
US
cents/tons-
km
3.8 4.0 15.2
Average unit tariff.
Passenger
US
cents/passe
nger-km
0.6 1.6 2.3
Unit Kenya Tanzania
Actual container handled
TEU/year
436 671 213 472
General cargo handling capacity 1 500 000 4 100 000
EFFECIENCY:
Average container dwell tome
in terminal
Days
5 7
Average container crane
productivity
Hours
10 20
Average general cargo crane
productivity
20.82 20
TARIFF:
Average general Cargo handling
charge
Ship to
gate
(USD/ton)
6.5 13.5
Tanzania's rail and port are congested and in a poor state, thus leading businesses to move goods by road to avoid unreliable and
delayed delivery.

Infrastructure Sectors: Power & ICT
Power Infrastructure
• Approximately 90% of energy needs are met by biomass with
petroleum and electricity making up 9% and coal & other
sources 1%.
• Erratic power supply is due to the reliance on hydroelectric
power as well as increased demand for electricity.
• Potential to become a power exporter to neighbouring Kenya
and Uganda.
ICT Infrastructure
• Country has a relatively high GSM coverage gap.
• Mobile market is among the most competitive compared
to the EAC countries.
• Submarine cables have the potential to reduce internet
and international telecom charges.
Unit LIC Tanzania MIC
Installed power generation
capacity
MW/mil.
People
24.4 22.3 796.2
Power consumption kWH/capita 99.5 47.6 4473
Power outages Day/year 40.6 63.1 5.6
Firms reliance on own
generators
%consumption 17.7 12.3 0.5
Firms value lost due to power
outages
%sales 6.1 nav 0.8
Access to electricity
%population
15.4 10.6 59.9
Urban access to electricity 71 38.9 83.7
Rural access to electricity 12 1.8 33.4
Unit LIC Tanzania MIC
GSM coverage %population 48.2 52.4 97.2
International
Bandwidth
Mbps/capita 5.8 2.7 30.2
Internet
Subscribers/100 people
0.1 0.1 2.0
0.8 0.4 9.4
Landline
Mobile Phone 15.1 20.7 86.7
Tanzania has the potential to export power to neighbouring countries. It also has hydropower generation potential with the
construction of the Rusumo falls hydropower plant.

Infrastructure Sectors: Investment Potential
• Tanzania is expected to become one of the fastest-
growing economies in the world.
• Key drivers to growth:
• Natural gas discoveries
• Regional integration supported by an
extension of transport infrastructure
networks.
• Stable democracy.
• Infrastructure performs fairly well compared to its
African peers, but quality is still too poor.
• Poor state of infrastructure has a negative impact
on the economy’s productive capacity.
• Infrastructure in Tanzania has witnessed
impressive investment in recent years and there is
more to come.
• Transport and utilities infrastructure projects
worth US$19 billion are in the pipeline.
Source: PWC
Tanzania has numerous infrastructure development and investment opportunities.

Infrastructure sector: Project Pipeline (1/2)
Project Name Description Value
(estimate)
Duration
• TAZARA Rail Rehabilitation • Rehabilitation of the railway track, modernising coaches, new locomotives,
etc..
• $42m • Ongoing to be completed 2015
• Rusumo Falls Hydropower Project • 80MW hydropower generation plant, transmission lines and substations • $97.3m • Ongoing to be completed 2018
• Zambia Tanzania Kenya Interconnector • 667km 400KV AC transmission line • $860m • Ongoing to be completed 2018
• Mtwara Gas Fired Power Plant • 400MW power generation station and expansion of the electrical power
grid
• $1bn • Ongoing to be completed 2017
• Road Sector Support Project Phase II • Construction of 210km road from Tundur-Mangaka-Mtambaswala and
188km from Dododma-Babati road
• $335.76
m
• Ongoing to be completed 2017
• Arusha-Holili And Taveta-Voi Road • Construction of Arusha bypass and dualling the Sakina-Tengeru section
and roadside amenities
• NSSF Office • 26 storey building, host the country’s embassy in Kenya and business
offices
• $39.8m • planned
• Bridge Construction In Dar es Salaam • The bridge will be 7.1 Km, 4lanes and a pedestrian path. • $64m • Planned
• Geothermal Power Plant At Lake Ngozi • The new power plant will generate 5, 000MW • $300m • planned
• Arusha-Holili Highway • The 110Km Arusha-Holili highway • $560m • Completion April 2015.
• Dar es Salaam and Chalinze Toll Road Project • Construction of a 6lane 100km expressway • Ongoing to be completed 2017
• Makamboko-Songea Road Rehabilitation • Upgrade of a 295km road with two truck lanes • $585m Ongoing to be completed 2017
• Julius Nyerere International Airport Terminal
III
• Expansion of the airport terminal and installation of security system • $180m • Ongoing to be completed
October 2015
• Kirasawe Cargo Freight Station • Expansion of current Dar es Salaam port, dry port terminal, truck road
access, new mainline, spur lines, freight station, etc.
Source: Construction Review Online;

Infrastructure Sector: Project Pipeline (2/2)
• Dar es Salaam Port Upgrade • designing and building of roll-on roll-off terminal, deepening and
strengthening berths 1-7 at the port, and construction of terminals
• $523m • Planned, start and completion not
defined
• Mtwara Port Rehabilitation • Expansion of the port to be able to berth seven ships • $214m
• Bagamoyo Port Construction • The Bagamoyo port construction project will entail building of a 34km
road joining Bagamoyo and Mlandizi and 65km of railway connecting
Bagamoyo with the Tanzania-Zambia Railway (TAZARA) and Central
Railway.
• $11bn • Planned to begin 2015
• Real Estate Project
• involve setting up of 1, 500 house units in the first phase. • $48.24
m
• Planned
• Power System Master Plan • increase the installed generation capacity to 10,000MW. • $11bn • Planned to be completed 2020.
• Construction Of Tanzania China Logistics
Centre
• The first phase will involve construction of the hub to be used in
distributing high quality Chinese products in the East and Central Africa
markets
• $31.8bn • Planned
• Construction Of Ring Road In Dar Es Salaam • constructing tarmac ring roads in the city • $17m • Ongoing, completion not defined
• Construction Of A Railway Line From Dar-
es-salaam To Mwanza
• The line will run from Tabora to Kigoma and Tabora to Mwanza,
including some parts of Kailua region to Mpanda.
• $7bn • Ongoing, completion not defined
• Construction Mtwara-Songea-Mbamba Bay
Rail Line
• Line will provide connectivity to Mtwara-Liganga Iron Ore fields • $1.4bn • Ongoing to be completed 2015
• Mbinga-Mbaba Bay Road Upgrade • Upgrade of 50km including a 2lane truck road • $53m • Ongoing to be completed 2017
• Mtwara Airport Rehabilitation • Construction of new terminal, apron extension and taxiway, and
resurfacing runway.
Source: Construction Review Online

TANZANIA: Agenda
• Introduction
• Gas Investment
• Conclusion
• Mining Industry

TANZANIA: Mining Industry
Mining Overview
Mining Overview
• Tanzania is Africa's fourth largest producer of gold and
diamonds.
• Forecasted to grow at 1.6% from $0.99bn in 2014 to
reach $1.0bn by 2018
• The industry is small in terms of value but earns a
significant share of export revenues.
• The industry is experiencing some difficulties due to weak
commodity prices.
• The industry will suffer stagnation from 2015-2018 as a
result of minimal gold production growth.
• Tanzania's mining industry is still going to experience
some problems as there are no new mining projects in
the pipeline.
• The country plans to diversify the industry into coal,
nickel and uranium in the long term.
• Tanzania has substantial long term potential of coal
production.
Mining Regions
Source: BMI Tanzania Mining Report Q1: 2014; Maps Of World
Tanzania is currently under pressure due to the weakness of global gold prices, thus affecting current production as well production
growth.

Mining Market
Market size
• Relatively small market.
• Under pressure due to weak commodity prices.
• The market is expected to grow at 1.6% over the period of
2014-2017.
• Currently contributes ~3.0% to GDP –this percentage is
forecasted to drop to a mere 2.2% by 2017.
• Majority of the industry value is gold production.
• Nickel production in hindered by weak global prices.
Developments
• A Chinese firm Sichuan Hongda has invested $3bn to
construct a new coal and iron ore mine in Mchuchuma
with estimated reserves of 536mm tonnes.
• Edenville Energy's Rukwa coalfield have estimated coal
reserves of 175mm tonnes.
• The mining code 2010 has become a barrier to new
potential players in the industry:
– Increased focus on local ownership
Mining Industry
Value
2014F 2015F 2016F 2017F
Value USDbn UD$0.98bn US$0.93bn US$0.96bn US$1.05bn
%change -1% -5.47% 3.42% 9.25%
Production 2014F 2015F 2016F 2017F
Gold 1.66moz 1.66moz 1.67moz 1.68moz
Diamond 0.29mnct 0.30mnct 0.31mnct 0.32mnct
Copper 7.63kt 7.90kt 8.18kt 8.46kt
Source: BMI Tanzania Mining Report Q1: 2014
The industry is currently under pressure form weak global prices and the downward pressure is expected to persist until 2018.

Governing Bodies And Regulations
Mining Licenses Key governing Bodies
• Acts as a voice for the industry.
• Mediator between the mining
investment community and key
stakeholders.
• Provides geo-scientific
information, data and advisory
services.
• The Ministry of Energy and
Minerals facilitates development
of energy and mineral sectors.
• The Ministry delivers various
services related to development
of energy and minerals resources
through the participation of
various stakeholders
• The act aims to increase local
ownership of mines and pull the
sector away from domination by
foreign miners.
• The act allows the minister of
mines to make regulations
relating to foreign mining.
The government has limited the mining industry potential mainly through taxation?? and the implementation of the Mining Act of
2010
Source: BMI Tanzania Mining Report Q1: 2014; Ministry Of Energy And Minerals Tanzania; Mining Act 2010; Ministry Of Geological Survey Tanzania
Ministry of Energy
and Minerals
Ministry of
Geological Survey
Tanzania
The Mining Act
2010
License Description Validity
Prospecting and Retention
licence
• Granted to eligible corporate
entities
• Mining act grant the holder
exclusive rights to prospect in
an area in which the licenses
apply
• Valid for 4years,
renewable for 3years
Special mining license • Granted to eligible individuals/
corporate entities, both
Tanzanian and non- Tanzanian
• A royalty of 4% of the gross
value of mined gold is payable
to the government.
• Valid for estimated life
of ore as stated in
feasibility study,
renewable a year
before expiry
Primary Mining license • Granted to Tanzanian small
scale mining operations
• Valid for 7years,
renewable 3months
before expiry
Processing, smelting and
refining license
• Any eligible persons can apply
for this license
• Valid for 25years
Chamber of
Minerals and
Energy

Mining Sectors
Gold Sector
• Tanzania is the fourth largest producer of gold in Africa.
• The largest contributor to the country's share is Geita
mine operated by AngloGold Ashanti.
• Gold mining sector is experiencing low output as lower
gold prices, local unrest and high taxation weigh on key
players.
• The sector will experience a stagnation in output as a
number of mines are due to close and no new mining
projects are on the cards.
• African Barrick and Resolute Mining will be closing down
two mines due to depleted reserves.
Diamond Sector
• Williamson mine is the only diamond mine in Tanzania
controlled by Petra Diamonds.
• The mine is forecasted to increase production from 188
465ct in 2014 to 300 000 by FY2017
• The Williamson mine had revenue of $53.9million for
FY2014 (FY2013: $41.9million)
Resources Tonnes(millions) Grade(cpht) Contained
Diamonds(mcts)
Indicated 103.6 4.6 4.77
Inferred 912.5 3.1 28.33
Total 1016.1 7.7 33.10
One of Africa's largest gold producers and a minimal producer of other base and precious metals.
Source: BMI Tanzania Mining Report Q1: 2014, Company Website-Petra Diamonds

Competitor Landscape
Key International Players
• African Barrick Gold
– Subsidiary of Barrick Gold
– Covers three mines in North Mara, Bulyanhulu and
Bugwazi
• IMX Resources
– Australian mining company
– Mines copper, platinum, nickel and gold
– Projects include Mibango and Luwumbu
• AngloGold Ashanti
– Mining gold from Geita mine
– The largest Gold producer in Tanzania
• Helio Resources
– Canadian company
– Exploring and drilling for its proposed SMP gold project
• Petra Diamonds
– Williamson mine mining pink diamonds
– The only major diamond producer
• Midlands Minerals Tanzania
– Canada based company mining diamond and gold
– Projects include the Itilima gold project and new Kilindi
diamond
Local Players
• STAMICO
– State owned company
– Acquired Tulawaka gold mine from African Barrrick
– Has a number of mining projects in the Gold mining
sector; Kiwira coal mine; Buhemba gold mine
redevelopment; and Biharemulo gold mine
Weak commodity prices are forcing mining companies to dispose of their projects with some ending operations.
Source: BMI Tanzania Mining Report Q1: 2014; Company Websites

Mining Project Pipeline
Company Mine mineral Expected Output Year
Tancoal Energy Mbalawala Coal Coal 1.5mntpa 2014
Shanta Mining Company Limited Chunya Gold Project Gold 1.3moz NI
Continenntal Nickel Nachingwea Nickel 607kt NI
Unarex Manyoni Uranium Feasibility Study NI
Syrah Resources Shikula Coal Exploration Stage NI
African Eagle Dutwa Nickel 917kt Reserves NI
African Eagle Zanzui Nickel 1mnt Reserves NI
Shanta Mining Company Limited New Liuka Gold Mine Gold 7 000oz Per Month NI
Shanta Mining Company Limited Songea gold Gold Early Development NI
Shanta Mining Company Limited Singida gold Gold Early Development NI
Source: BMI Tanzania Mining Report Q1: 2014; Company Websites

TANZANIA: Agenda
• Introduction
• Executive summary
• Mining Industry
• Conclusion
• Gas Investment

TANZANIA: Gas Investment
Gas Sector
• The natural gas deposits are expected to drive massive
private investment in Tanzania.
• BG Group, ExxonMobil and Statoil are some of the big
names that are already involved in this sector.
• Tanzania already has two small producing gas fields;
Songo Songo and Mnazi Bay.
• Statoil has made gas discoveries of ~85billion m³ and a
56billion m³ by ExxonMobil which bring total gas
discoveries to ~1.3trillion m³.
• The Tanzanian energy and minerals ministry noted that
the country's natural gas reserves are expected to reach
as much as 5.7trillion m³ by 2016.
Investments In Gas Sector
• Tanzania offshore natural gas reserves will take seven to
ten years to explore.
• It is estimated that the LNG projects will yield ~USD30bn
for Tanzania.
• Peak levels of investment are estimated to be between
2017-2020 period with LNG production starting between
2020-2025.
• BG Group, Ophir Energy, Statoil and ExxonMobil have all
submitted proposals to build an onshore LNG plant in the
southern region of Lindi.
– The terminal is expected to cost ~USD15bn and the final
decision for the investment is only due in 2016
The investment in the offshore gas sector is expected to offset poor export performance and keep the GDP growth rate at ~7.3%
in the next coming years.
Source: Oil And Gas In Africa KPMG; the Deloitte Guide To Oil And Gas In East Africa; BMI Tanzania Business Forecast Report Q1: 2014

TANZANIA: Agenda
• Introduction
• Executive summary
• Mining Industry
• Gas Investment• Conclusion

Conclusion
• Significant opportunities in a rapidly growing economy, infrastructure sector and the
emerging LNG sector.
• Tanzania is very open to foreign investment and was ranked among the most attractive global
economies.
• The most prevalent challenges in doing business in Tanzania is the high levels of corruption as
well as the poor condition of infrastructure.
• The Tanzanian government has allocated significant resources to deal with the infrastructure
deficit.
• The LNG sector is one of the most attractive sectors in Tanzania.

TANZANIA COUNTRY ANALYSIS- Final

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (20)

Similar to TANZANIA COUNTRY ANALYSIS- Final

Similar to TANZANIA COUNTRY ANALYSIS- Final (20)

TANZANIA COUNTRY ANALYSIS- Final