China’s influence in Africa: Increases investments in Tanzania

Tanzania and China have signed a US$3 billion deal to develop coal and iron ore projects in the southern part of the country in what is reportedly the single largest investment ventures in the country to date.

The two projects namely: Mchuchuma coal fields and Liganga iron ore project, are aimed at helping the East African country achieved its Vision 2025 growth targets.

The coal project aims at resolving the country’s electricity shortage and when fully operational could also see Tanzania become an exporting country.

The deal was finalized Wednesday after the National Development Corporation (NDC) and the China-based Sichuan Hongda Group signed a joint venture agreement.

Under the agreement, NDC and Sichuan Hongda will form a subsidiary, Tanzania China International Mineral Resources Ltd (TCMR), to develop the two projects.

The NDC holds a 20 per cent stake in TCMR while Sichuan Hongda Group holds the remaining 80 per cent. The subsidiary will raise the money required for the projects, to be implemented in two phases.

The first phase will see Mchuchuma extracting coal to be used in generating electricity while the second will involve extracting iron ore from Liganga.

It is estimated that there are over 480 million tonnes of coal reserves at Mchuchuma which are enough to generate 600 Megawatts of electricity.