Tanzania's Mining Sector: From Extraction to Industrial Transformation

Have you ever wondered why a country sitting on vast mineral wealth often captures only a fraction of the true value?  

It is a question that has puzzled economists and policymakers for decades. Tanzania digs up gold, copper, and graphite. It ships them overseas. And then it watches as other nations turn those raw materials into high-value products batteries, electronics, jewellery, and industrial components. The wealth generated by processing happens elsewhere. The jobs created by manufacturing happen elsewhere. Tanzania gets the royalties; other countries get the prosperity.

That story, however, is ending.

Tanzania's mining sector is undergoing a profound transformation. After achieving the ambitious Vision 2025 target of contributing 10 percent of GDP a year early, the sector is now shifting focus. The question is no longer about growth alone it is about what kind of growth, and who benefits. The country is moving from extraction to industrialisation, from raw exports to local processing, and from a peripheral contributor to a strategic engine of economic transformation.

Let us explore how this shift is happening and what it means for investors, equipment suppliers, and partners.

The Growth Story: From 4 Percent to 10 Percent

The numbers tell a remarkable story. In 2007, mining contributed just 4 percent of Tanzania's GDP. By 2024, that figure had reached 10.1 percent surpassing the government's Vision 2025 target a year early. In 2025, the sector's contribution averaged 11.9 percent between January and September. What was once a marginal sector is now one of the country's leading economic pillars.

This growth has been underpinned by three factors.

First, gold. Tanzania remains Africa's fourth-largest gold producer. Gold exports reached $4.75 billion in 2025, up 39 percent year-on-year, driven by record international prices averaging over $4,190 per ounce. That is a lot of gold.

Second, the sector has become the country's largest foreign exchange earner, surpassing tourism for the first time. In the year ending November 2025, gold exports earned $4.7 billion, compared to tourism's $4 billion.

Third, total mineral exports reached $5.4 billion in 2025 a 31.1 percent increase from $4.1 billion in 2024. Minerals now account for 52.57 percent of Tanzania's exports.

But growth in extraction is only part of the story. The more important shift is what comes next.

The Industrialisation Pivot: From Raw Exports to Value Addition

Here is where things get interesting.

The Tanzanian government has made its position crystal clear: the era of exporting raw minerals is ending. The 2026/27 budget reinforces this direction, endorsing a strategy aimed at keeping more value within Tanzania. 

The government has identified 14 high-value opportunities across 11 strategic and critical minerals, with the potential to generate $7.2 billion to $11.7 billion annually. These opportunities span intermediate and end-use products, including gold bars and jewellery, cement, ceramics, glass, refined gold, and battery minerals.

To ensure compliance, the government has tightened local content regulations. No medium or large-scale mining licence will be issued without a credible plan for value addition within Tanzania. The Finance Act 2025 extended the 20 percent local value addition requirement to all licence holders with no exception.

This is not just about keeping more money in the country. It is about building an industrial ecosystem. A modern copper processing plant has already been inaugurated. Major projects involving nickel, graphite, rare earth elements, and niobium are expected to position Tanzania as an increasingly important supplier to global clean energy and advanced manufacturing value chains.

Imagine what this means: instead of just digging up copper and shipping it out, Tanzania could one day be producing copper wire, copper pipes, and copper components for the global market. Instead of exporting raw graphite, Tanzania could be supplying processed graphite for electric vehicle batteries. That is the vision.

Critical Minerals: Tanzania's Next Frontier

The global energy transition is reshaping demand for minerals. Electric vehicles, wind turbines, battery storage, and advanced manufacturing all depend on a suite of minerals that Tanzania possesses in significant quantities. The government has identified 25 critical and 18 strategic minerals that could drive economic growth and position the country as a key player in the global energy transition.

Graphite offers a striking example. Tanzania holds approximately 6 percent of the world's graphite reserves, essential for lithium-ion battery anodes used in energy storage and electric vehicles. The Mahenge and Epanko graphite mines are each expected to produce over 60,000 tonnes annually.

Rare earth elements like Neodymium and Praseodymium crucial for high-performance magnets in electric vehicle motors and wind turbines are also present in substantial deposits.

The Kabanga Nickel Project is perhaps the most significant single development. Believed to be one of the world's largest and highest-grade development-ready nickel sulphide deposits, it also contains substantial copper and cobalt resources. With over 30 investors already expressing formal interest, the project is advancing toward a Final Investment Decision in 2026.

Tanzania's membership in the Minerals Security Partnership a global framework aimed at securing supply chains for critical minerals reflects the strategic importance of its resource base. 

The country is positioning itself not merely as a supplier of raw materials but as a potential hub for mineral processing, serving East Africa, Southern Africa, and global markets.

Infrastructure and Execution: The Next Phase

Investment in roads and rail links is improving the movement of minerals and equipment. 

Stronger power connectivity is reducing operational uncertainty; more mining companies are connecting to the national grid, lowering reliance on diesel generation and stabilising costs. The government has directed the Ministry of Minerals to expand exploration coverage to 50 percent by 2030, ensuring the resource base continues to grow.

Regulatory changes, including clearer licensing processes and stronger engagement between the public and private sectors, have improved predictability for investors. The 2026/27 budget proposes reforms to Framework Agreements aimed at reducing regulatory uncertainty and simplifying the implementation of tax incentives for large-scale mining projects.

The sector's attractiveness is reflected in investment data. Foreign direct investment stock in the minerals sector reached $9.79 billion in 2024, compared with $9.15 billion in 2023 and $8.64 billion in 2022. Tanzania's score on the Fraser Institute's Investment Attractiveness Index rose to 68.04 in 2025 from 62.75 in 2024, ranking the country fourth in Africa and 34th globally.

What This Means for Partners and Investors

For international equipment suppliers, off-takers, co-investors, and service providers, Tanzania's transformation presents both opportunity and complexity.

The opportunity is clear: a growing sector with a clear industrialisation agenda, substantial mineral reserves, and a government committed to value addition.

The complexity is equally clear: navigating licensing, local content requirements, and the shift toward domestic processing demands local presence and regulatory fluency.

This is where Simba Ustawi comes in.

We hold active gold processing and copper mining licenses in Tanzania. We operate on the ground. We have proven partnerships with Tembo and Amani. We understand the regulatory environment, the infrastructure challenges, and the opportunities.

Whether you are an equipment supplier looking for a local partner, an off-taker seeking high-quality copper and gold, or a co-investor ready to deploy capital, we are the partner who can make it happen.

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We connect investors, equipment suppliers, and off-takers to high-quality copper and gold with active licenses, proven partnerships, and a track record of delivery.

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