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 2019, the country's mining sector could diversify as various miners are looking to invest in the country's nickel, coal and uranium resources.
|e/f = BMI estimate/forecast. Source: UN Data, BMI|
|Mining Industry Value, USDbn||0.86||0.84||0.81||0.80||0.80||0.79|
|Mining Industry Value, USDbn, % y-o-y||-6.94||-3.38||-2.59||-1.47||-0.61||-0.37|
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 2016-2019. In our view, weak gold prices will halt gold production growth and delay or halt new projects from coming online altogether. We forecast Tanzania's mining industry value to decline from USD0.81bn in 2015 to USD0.79bn by 2019. This is an average annual contraction of 1.3% during 2016-2019, significantly lower than the average annual growth of 4.2% over 2010-2014.
Despite the decline in production growth, Tanzania's mining industry will remain relatively significant in regional terms as the country is currently Africa's fourth-largest producer of gold and continues to produce growing numbers of diamonds. Beyond our forecast period, the sector will be boosted by increasing coal, nickel and uranium production.
Although Tanzania's mining industry is relatively small in terms of value, it is responsible for a significant share of the country's export revenue. Major foreign investors in Tanzania's mining sector include Acacia Mining, (formerly African Barrick Gold) and AngloGold Ashanti. However, Tanzania's mining sector will remain relatively uncompetitive due to the country's high mining taxes and royalties. The mining code, updated in 2010 at the height of the commodities price boom, is relatively more burdensome than the mining codes of the bulk of other African countries. As such, Tanzania is likely to find itself at a competitive disadvantage as mining companies look to slash capital expenditure in an era of weakening commodity prices.
Despite the ongoing problems hampering the country's mining sector, a number of new projects could support the sector's growth outlook over the coming years. For instance, the construction of a coal and iron ore mine plus a 600MW coal-fired power plant will begin in the coming quarters. The capital expenditure for the new coal and iron ore projects will total USD3bn, which will be provided by China's Sichuan Hongda. This supports our view that Chinese investment will support Africa's mineral growth outlook. The new iron ore and coal mines are expected to start production in 2018.
|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.|
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.
- 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.
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.
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.
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.
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.