Mining

Though agriculture is the backbone of the economy, at present, mining is the engine of economic growth. The sector had a growth rate of 14% in year 2000 compared with 9% in previous year. During 2000 for example, income generated by mining sector increased 130% from $80.4 million in 1999 to $ 185.1 million. In 2000 Tanzania's mineral exports accounted to 27% of total exports. Production of gold and gemstones contributed to greater extent to the growth of the sector.

Gold mines are located in the northwest regions of Mwanza and Shinyanga as well as Mara region to the East of Lake Victoria. In year 2000 sales from gold export recorded an increase of 208% compared to 1999. Export sales of diamond from Williamson Diamonds at Mwadui recorded an increase of 70% from $ 43.75 million compared to $25.76 in 1999. Big international companies that are involved in mineral prospecting include Kahama Gold Mines Corporation, Ashanti Goldfields Limited, Resolute Limited, Afrika Mashariki Gold Mine, Anglo – American Minerals, Tanganyika Gold Mines, Pangaea Minerals, Kiwira Coal Mines as well as Williamson Diamonds Limited.

In the year 2000, recorded production of gemstones was 151,000 kgs compared to 92,000 kgs in the previous year, an increase of 58%. Most of the gemstones are exported unprocessed thus fetching very low prices in the world markets. Gemstones that are abundant in the south, north and north east coast offer great potential, though full potential of the sub sector has not been realized. In the southern areas of Tanzania, at Tunduru and Songea districts, precious gemstones such as saphire, alexandrites, ruby etc are abundant in alluvial soils. Matombo mountains and Mahenge areas in Morogoro region, are rich with deposits of ruby known all over the world as Matombo ruby. Areas of Tanga regions along Umba river are known by their potential for green garnets while the Arusha region at Mererani and Mbughuni produce the famous tanzanite, a rare ruby found in Tanzania only. Other gemstones that are found in the area includes rhodolite and tsavorite. Except for the tanzanite mining that has both mechanized and semi-mechanized production, mining of all other gemstones found in alluvial soils are controlled by approximately 50,000 small miners who uses hand tools and equipment. Actual statistics on contribution of gemstone to the economy are hard to find as a large part of the business is conducted outside official marketing channels. However, the government is now introducing regulation that will enable miners to disclose their transaction for verification and taxation.

Tanzania also boasts of deposits of coal, tin, phosphates, nickel, cobalt, copper, gypsum and pouzzolana. Exploration is ongoing to determine economic viability of large scale mining of the three minerals.

The opportunity for mining is in finding investors especially in locations e.g., Muheza and Chunya with gold deposits that lack a serious investor or venture partner who can collaborate with artisanal miners. As for small miners, the opportunity is on market linkage to international buyers as well as assistance on sourcing hand tools and small equipment such as water pumps, generators, compressors, etc