Tanzania Plans Rail Infrastructure to Release Massive Mineral Resource Potential

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Africa's mining potential is closely tied to infrastructure development, particularly transport networks. Tanzania is planning to construct an 850-kilometer, $1.5 billion rail line that will provide a link for coal and iron-ore projects in the country's southern highlands to the port of Mtwara on the Indian Ocean coast. The government is planning to invest $34 million on feasibility studies for the Mtwara-Songea-Linganga rail line in the 2011-12 financial year.

The Mchuchuma coal deposit, which is near the border with Malawi and Mozambique, is estimated to have more than 125 million tons of coal accessible, with a much greater volume that could be mined. The iron-ore deposits in the Liganga area have a potential 2 billion tons of ore, with 45 million tons readily accessible. The two resources are to be developed jointly in order to provide the base for Tanzania's iron and steel industry, which currently imports 200,000 tons of steel.

The project, with the rail infrastructure to deliver the ores to export points, could contribute 20% to 25% of the country's GDP, which traditionally has relied on agriculture. Negotiations between Tanzania's National Development Corporation and minerals company Sichuan Hongda Corporation of China (Chengdu, China) concerning the required infrastructure have reached an advanced stage. It is estimated that the project could create 40,000 jobs.

Investors in the coal and iron project have set aside $6.25 billion for the implementation of the project.

The Tanzanian government is also supporting the development of 1,500 megawatts (MW) of additional power generation in the southern region. Power plants for the coal and iron projects will be an integral part of this plan.

The new rail line will not only serve the interests of mining but will boost trade with Mozambique, Malawi and Zambia. It also will greatly improve the distribution of agricultural goods and their timely delivery to markets after harvest.

In the 1970s, China built the 1,860-kilometer Tanzania-Zambia rail line from Dar es Salaam to Kapiri Mposhi with an investment of $500 million (in 1970s value).

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