Tanzania Mining Report

Providing expert analysis, independent forecasts and competitive intelligence on the mining.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Petrochemicals Risk Reward Index, Economic Forecasts, Company Profiles and Global, Regional and Country Industry Overviews.

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Tanzania Mining Report
Product Price
$1,295.00

BMI View: Tanzania's gold sector will remain pressured by low gold prices, which will discourage production growth over coming years. Beyond our forecast period to 20 20 , the country's mining sector could diversify as various miners are looking to invest in the country's nickel, coal and uranium resources.

Tanzania - Mining Industry Value
2014e 2015e 2016f 2017f 2018f 2019f 2020f
e/f = BMI estimate/forecast. Source: UN Data, BMI
Mining Industry Value, USDbn 0.86 0.79 0.75 0.74 0.77 0.80 0.82
Mining Industry Value, USDbn, % y-o-y -7.36 -7.66 -5.34 -1.56 3.95 3.59 3.43
Tanzania - Key Mining Projects
Commodities Mine Mine Type Primary Company Secondary Company Notes
na = not available. Source: Company announcements, BMI
Coal - Thermal Shikula Open Pit Syrah Resources Ltd (100%) na The project is under exploration stage.
Copper Ibaga Open Pit Liontown Resources (100%) na Project is currently in exploration stage which shows high grades of copper and zinc products, drilling to start in 2014.
Coal - Thermal Rukwa na Kibo Mining na Resources: 109 Mt (71.33 Mt Indicated/38.05 Mt Inferred).
Iron Ore Liganga na NDC Sichuan Hongda July 2013 - The exploration findings have discovered over 364mnt of coal at the project. The project is expected to be completed by 2018.
Coal - Thermal Mchuchuma na NDC Sichuan Hongda 2013 - The project involves 3mnt per annum coal mine and is expected to be completed by 2017; July 2013 - The exploration findings have discovered over 219mnt of iron ore deposits.
Gold Chunya na Shanta na Gold: 1.3moz resources. Production start date remains uncertain.

Latest Developments & Structural Trends

  • Tanzania holds vast deposits of coal, cobalt, copper, diamonds, gold, nickel, silver and uranium. Despite these positive aspects, we forecast the country's mining sector growth will decline over 2016-2020. In our view, weak gold prices will halt gold production growth and delay or halt new projects from coming online altogether. We expect Tanzania's mining industry value to decline from USD0.86bn in 2014 to USD0.82bn by 2020.

  • Regionally, Tanzania will follow a similar muted growth trajectory in comparison to the country's regional peers. Although Sub-Saharan Africa (SSA) holds significant growth potential due to the region's vast reserves of high-grade minerals, mine output growth will continue to face headwinds from a combination of low mineral prices, elevated production costs and a slowdown in capital expenditure (capex) over our forecast period to 2020 ( see: 'SSA's Growth To Find Floor In 2016', May 26)

  • Tanzania, currently Africa's fourth-largest gold producer, will see modest growth in output due to mine closures and a limited number of projects in the pipeline. Ongoing labour unrest, illegal mining, power shortages and gold price weakness will also temper the sector's production outlook. Acacia Mining (formerly African Barrick Gold) and Resolute Mining have ceased production at two mines due to depleted reserves. Acacia Mining and AngloGold Ashanti have warned about impending job cuts in the north of the country. Given that Tanzania relies upon gold for over 40.0% of its exports, the downturn in the sector is likely to have serious repercussions for the economy as a whole.

  • Despite this, a number of new projects will ensure the country's production growth remains positive over the coming quarters. For instance, CATA Mining's Mara gold mine, the second largest project in the region, following Acacia Mining's North Mara gold mine, is expected to begin production in Q316. The miner has invested over USD54mn to develop the project. Further, Shanta Gold recorded gold production of 24.5 thousand ounces (koz) at its New Luika gold mine in Tanzania in Q315. The record production was benefited from a 33% q-o-q improvement in gold ore grade efficiencies and a 25% increase in tonnes milled during the quarter.

  • Shanta Gold has laid out a five-year mine plan for its New Luika mine in Tanzania. The new mine plan, which will include underground mining and an ongoing surface mining and tailings recovery project, estimates an average production of 84koz annually over the next five years. An underground extension to the mine will produce 310koz and add USD72mn to the project value. The underground development is estimated to have an up-front cost of USD38mn. Under the plan, the open pit will run until 2018. New Luika is expected to produce a total of 443koz of gold during the 2016-2022 period, of which 310,000oz will be from underground, 133koz from open pit and 19koz from the tailings project.

BMI Industry View
7
Table: Tanzania - Mining Industry Value
7
Table: Tanzania - Key Mining Projects
7
Latest Developments & Structural Trends
8
SWOT
9
Industry Forecast
11
Gold: Muted Growth Ahead
11
Latest Developments
11
Table: Gold Production Forecast (Tanzania 2012-2020)
11
Structural Trends
12
Industry Risk Reward Ratings
16
Tanzania Risk Reward Index
16
Rewards
16
Industry Rewards
16
Country Rewards
16
Risks
16
Industry Risks
16
Country Risks
16
Africa - Risk/Reward Index
17
Key Takeaways
17
Latest Revisions
18
Table: Africa - Mining Risk/Reward Index
19
Regulatory Development
20
Trade & Investment Risk Analysis
21
Commodities Forecast
25
Commodities Outlook
25
Table: BMI Commodities Price Forecasts
25
Competitive Landscape
26
Key Players
26
Table: Tanzania - Main Mining Companies
27
Company Profile
28
Barrick Gold - Q3 2016
28
Table: Select Commodities - Price Forecasts
30
Company Strategy
33
Table: Barrick Gold - Key Projects
34
Table: Barrick Gold - Key Financial Data
35
Regional Overview
36
Sub-Saharan Africa Overview
36
Table: SSA - Government Involvement In Mining Sector
42
Methodology
44
Industry Forecast Methodology
44
Sources
45
Risk/Reward Index Methodology
46
Table: Weighting Of Indicators
47

The Tanzania Mining Report has been researched at source and features BMI Research's mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's Tanzania Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in Tanzania.

Key Benefits

  • Use BMI's independent industry forecasts on Tanzania to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in Tanzania's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Tanzania.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI’s key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Industry SWOT analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
  • Output: Production volumes (‘000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (USDmn) for all major metals, minerals, ores and gems mined in each state.
  • Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI’s Mining Risk Reward Index

BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing USD sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

Sources

The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.