Tanzania Poised to be East African Fossil Fuel, Critical Minerals Hub

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land, Texas)

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Summary

Tanzania is gradually making moves to be a major resource conduit and producer in East Africa, gradually setting itself up to be a supplier of LNG and the critical mineral graphite.

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Anticipated Finish Line

Tanzania's finance minister said agreements regarding a multibillion-dollar liquefied natural gas (LNG) export facility and two critical minerals projects in the country are close to happening, according to a report from Reuters. Industrial Info Resources data show more than US$82 billion worth of industrial construction lined up for Tanzania, although not all of this will occur as planned. The bulk of this spending comes from the power, mining, and fossil fuel industries.

LNG

By far the largest project on Tanzania's books is an LNG production and export facility in Lindi on the coast of the Indian Ocean. The project is headed by Shell and Equinor but features multiple minority partners, including Exxon Mobil Corporation. While a final decision had been expected this summer, Finance Minister Khamis Mussa Omar told Reuters the final agreements are "almost there."

The LNG facility would source its gas from the country's offshore resources, specifically Block 1, which Shell acquired in its purchase of BG Group, and Block 2, which is operated by Equinor. Other partners in the LNG plant hold interests in the offshore assets, including ExxonMobil for Block 2, and Singapore-based Pavilion Energy for Block 1.

The facility is expected to have at least two production trains producing around 10 million tons per annum (MTPA) combined. While a final decision has yet to be reached on the plant, construction could begin as early as next year, putting the facility on track for an expected 2031 completion date and providing a major supply of LNG to primarily Asian markets, although Omar said some of the LNG would be used domestically. Readers can access details of the project, including anticipated construction timelines, key contact details, and equipment and service needs, by clicking here.

Major Crude Oil Export Terminal

One Tanzanian project that is certainly happening is the addition of crude oil storage capacity at an export terminal near Tanga to support the East Africa Crude Oil Pipeline (EACOP), which will run from oilfields in landlocked neighbor Uganda to the Tanzanian terminal on the Indian Ocean. According to an update from earlier this month by the EACOP, the pipeline is 93% complete, with first oil expected to flow in early 2027, just in time for the anticipated completion of work at the export terminal. The addition of dozens of tanks at Tanga is quite extensive, representing around 2 billion barrels of crude oil storage capacity, ready for export onto global markets.

Critical Minerals

The Tanzanian finance minister also said final agreements were nearing for two major critical minerals projects. Tanzania has major deposits of the critical mineral graphite and other critical metals and minerals such as uranium, copper, nickel and cobalt, as well as a large gold mine development that is expected to wrap up next year.

The two largest graphite mining and processing projects in the country represent more than US$500 million in combined investment value, and both have been have given a high probability (81-99%) of moving forward as planned by Industrial Info Resources. While Omar didn't name the two projects anticipated to make headway soon, he suggested that U.S. concerns were involved, and one of these two largest graphite projects is poised to change ownership to a U.S. company later this month.

The Nachu graphite-mining project in the Lindi region of southeastern Tanzania has changed ownership a couple of times since its inception, initially headed by Australia's Magnis Energy Technologies, which transferred ownership to fellow Australian company Ryzon Materials. Now a U.S. company, Sow Good, primarily known for its freeze-dried snack products, is taking over the development from Ryzon, expecting to obtain a 99.7% ownership stake in the two Ryzon companies developing the mine, and representing a new direction for the U.S. company. The deadline for the deal's finalization falls later this week.

The open pit mine and processing complex is anticipated to produce 240,000 tons per year of graphite concentrate over a 15.5-year mine life. Industrial Info Resources has been reporting on the project since 2014, with the originally anticipated construction start slipping over the years, but the change in ownership could suggest movement on the project soon. Once started, construction is anticipated to last around two years.

Australian firm Black Rock Mining is behind another significant Tanzanian graphite development in the Morogoro region in the country's south-central interior. While some site preparation for the above-ground mine has begun and certain early-work contracts are in place, Black Rock has yet to make a firm final investment decision (FID) on the project's construction, taking into account the availability of power resources, port infrastructure and transport access. With an initial earth-moving contract in place, a positive FID could see work beginning in earnest this year, putting the facility on track to begin ramping up toward full production of around 89,000 tons per year of graphite concentrate around two years later.

Power

Such large LNG and mining concerns require a solid power base, and Tanzania has plans to increase its power generation. In August, the country reported that its generation capacity had reached more than 4,600 megawatts, and it aims to have 8,000 MW of capacity in place by 2030, largely from renewable energy resources. The country has multiple power projects lined up, with geothermal and hydropower representing the two largest fuel types for the proposed plants.

Key Takeaways

• According to Tanzania's finance minister, the country is expecting to reach final agreements soon on a large Indian Ocean LNG export terminal and two critical minerals projects.
• Tanzania also is expanding its port infrastructure in Tanga to allow for exports of Ugandan oil carried on the upcoming East Africa Crude Oil Pipeline.
• The pipeline is reportedly 93% complete according to a report from earlier this month, while the LNG project and two significant graphite mining projects have yet to the full green light.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).