The much-awaited mining of iron ore and coal at Liganga and Mchuchuma respectively is expected to start next month as the government is currently settling issues with investors regarding investment incentives and power tariffs.
The current negotiations on the two issues have pushed back the planned date for commencement of the mining activities as the government initially set March as the time for beginning of operations at the mines.
During the last Parliamentary session, the government also insisted that it was fast tracking the required procedures to enable the projects to kick off, at a cost of US$3 billion.
The Permanent Secretary (PS) in the Ministry of Industry, Trade and Investments, Dr Adelhelm Meru, told the ‘Daily News’ that the procedures were now at an advanced stage since investors have released funds to compensate people who will be relocated to pave the way for the projects.
“We are now finalising preparations on discussing the issue of tariffs for power to be produced as well as incentives such as tax reliefs and others for the investors to operate profitably,” said Meru during an interview. “These matters need time to reach an agreement, but probably we will finish the talks this month so that the mining could start next month,” he added.
Regarding compensation, Meru explained that the people to be evicted will soon get their compensation as the funds are already there, however, he declined to mention the amount investors had availed for this purpose, arguing that the information was not yet for public consumption.
The evaluation on people’s properties for compensation has been completed and the report has been endorsed by the government. The two projects are jointly implemented by the National Development Corporation (NDC) and Chinese company, Sichuan Hongda Group (SHG) Limited, popularly known as Tanzania China International Mineral Resources Limited. The Chinese company has already finished doing feasibility study for the projects.
The study found that there are reserves of 428 million tonnes of coal at Mchuchuma and 126 million tonnes of iron at Liganga. It has been established that the Liganga coal mine has the capacity to produce about three million tones of iron per year that is enough to generate 600MW of electricity.
So far, the company has already secured a licence from the Ministry for coal mining as well as environmental permits for the project to use water from Katewaka, Mchuchuma and Lupali rivers. When the project starts operating, it will employ about 33 000 people and the government will save money used to import coal.