MBEYA: Tanzania has signed an agreement with a U.S.-linked investor to develop a major niobium mining project worth about 700 billion Tanzanian shillings ($300 million), in a move aimed at positioning the country as a key global supplier of the strategic mineral.
The project, known as Panda Hill and located in Mbeya region, will be developed by Panda Hill Tanzania Limited in partnership with U.S.-based Denham Capital, government officials said.
Mining Minister Anthony Mavunde said the project would produce niobium, a rare metal used to strengthen steel and manufacture high-performance alloys for infrastructure, aerospace and emerging technologies such as electric vehicles.
“This project places Tanzania on the global map of niobium producers,” Mavunde said at the signing ceremony.
Niobium production is currently dominated by Brazil, which accounts for about 80% of global supply, followed by another Brazilian producer at roughly 11% and Canada at around 6%, according to government data. Tanzania aims to become the world’s fourth-largest producer, targeting about 4% of global output, or roughly 100,000 tonnes annually.
The project includes the construction of a mine, processing facilities and a ferro-niobium smelter. Officials said the planned smelter would be the first of its kind in Africa and only the fourth built globally in the past four decades.
The government is seeking to move beyond raw mineral exports by promoting local processing and value addition, in line with its long-term development strategy.
“This is not just mining; it is industrialisation,” Mavunde said.
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Pierre Joubert, general manager of Panda Hill Tanzania Limited, said the project was entering an implementation phase after years of negotiations and regulatory adjustments.
Next steps include securing a special mining licence, updating feasibility studies to reflect current costs, integrating grid electricity into operations and assessing global markets for ferro-niobium, including the United States, he said.
The project is expected to generate significant economic benefits, including an estimated $1.77 billion in local procurement over its lifetime, with about 70% of goods and services sourced domestically.
Officials said the development would create around 1,600 construction jobs and about 600 permanent positions, with total direct and indirect employment estimated at up to 7,000.
The mine will be located within land currently used by the Songwe agricultural prison, covering about 5,434 acres. Authorities plan to construct a new modern prison facility as part of the project.
Under the agreement, the Tanzanian government will hold a 16% free carried interest, ensuring participation in strategic decisions and profits.
Treasury Registrar Nehemiah Mchechu said the government expects to earn about $686 million in revenue over the life of the project, including $132 million from dividends.
“The government does not inject capital but will benefit through equity and other revenue streams,” he said.
The project is also expected to strengthen Tanzania’s trade ties with the United States and integrate the country into global industrial supply chains across Africa, Europe, Asia and North America.