Recently published research from Business Monitor International, "Tanzania Mining Report Q2 2013", is now available at Fast Market Research
[USPRwire, Wed Apr 24 2013] The Tanzanian mining industry is relatively small in terms of value, but its importance is highlighted by the fact that mining earns a significant share of the country's export revenues. The mining sector contributes approximately 3.0% to annual GDP, but the government wishes to expand this to 10% by 2025, a target we think is too optimistic. Major foreign investors in Tanzanian mining include African Barrick Gold and AngloGold Ashanti.
Tanzania is home to significant deposits of coal, cobalt, copper, diamonds, gold, nickel, silver and uranium. The country has long been a significant producer of gold (and is currently Africa's fourth largest producer) and diamonds. However, we also expect coal, nickel and uranium production to become key sub-sectors of Tanzania's mining sector. We have long held the view that coal should become one of the fastest-growing areas in Tanzania over coming years, as the country looks to coal-fired power stations to offset an energy shortage that is holding back its development. The country could also be in a position to export coal, most likely to India and China.
We expect Tanzania's mining sector to become less attractive to investors, given the country's push to increase regulation and raise taxes on the sector. While other countries, such as Ghana, Peru and South Africa, are also seeking to raise taxes on mining companies, Tanzania is going significantly further, with plans to introduce an Australia-style 35% tax on mining companies' profits and raising royalties. These tax rises, combined with a lack of adequate infrastructure and the absence of huge mineral deposits compared with many of its neighbours could push investors elsewhere on the continent.
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