We have significant experience and are the market leader in Tanzania in advising clients operating in the mining, oil and gas as well as utilities sectors. For further detail on our experience in the energy and mining sector, refer to our capability statement below.
Mining industry in Tanzania
Tanzania is most well known for its deposits of gold, diamonds, rubies and (unique to Tanzania) tanzanite. However, it does also have deposits of other minerals including coal, copper, nickel, cobalt, gypsum, iron, lead, limestone, nickel, phosphate, tin, titanium, vanadium, uranium.
For years the mining sector in Tanzania had been virtually dormant as a consequence of policies, which discouraged private investment in the sector.
However, fiscal measures introduced in 1997 and a new Mining Act in 1998 triggered a resurgence of the sector in particular the development of several new large-scale gold mines with Barrick Gold and AnglogoldAshanti being the biggest investors in the sector.
Having been an insignificant gold producer in the early 1990s, Tanzania is now one of the largest gold producers in Africa and gold exports now comprise a significant proportion of the total value of goods exports from Tanzania. Promising prospects for a number of minerals including nickel, platinum and uranium make diversification from gold more likely in the future.
On 1 November 2010, the Mining Act 2010 came into force replacing the Mining Act 1998.
Oil and Gas industry in Tanzania
Tanzania has excellent opportunities for oil and gas exploration and development in its mostly unexplored but highly potential sedimentary basins.
The terms for potential investors are set out in the model Production Sharing Agreement (“PSA”) of 2008 and in the Petroleum (Exploration and Production) Act of 1980. PSAs are entered into with Tanzania Petroleum Development Corporation (“TPDC”), a public corporation.
Most existing PSAs predate 2008 and so refer to an earlier PSA model. Major gas discoveries have been made – including for example gas produced from Songo Songo, which is now being used for electricity generation.
Utilities industry in Tanzania
The main supplier of energy is the Tanzania Electric Supply Company (TANESCO), a state owned company. TANESCO’s generation system consists of hydro and thermo (from oil and gas).
The thermal power facilities are operated by private independent power projects TANESCO is also connected to the Uganda grid via Masaka through which it imports electricity into the Kagera region in North Western Tanzania.
TANESCO is also connected to the Zambian grid which supplies power to the Mbeya Region. Water is supplied by various government-owned water authorities in the country. Each major town has its own water authority.