Tanzania Energy & Mining Sector

The primary sources of commercial energy in the country are generated from petroleum, hydropower and coal.

The generation, transmission and distribution of electricity in the Tanzania energy sector is channeled through the Tanzania Electric Supply Company (TANESCO), which is fully owned by the government and is responsible for 98% of the electricity in the country.

The majority of energy consumption in the country, approximately 93 percent, is comprised of biomass energy resources within the country, namely fuel from wood and charcoal, both of which come from natural forests and plantations.

Because approximately 80% of the population lives in rural areas, where energy is mostly generated from wood fuel, projects are currently being promoted in order to address the concern of deforestation while, at the same time, providing electricity to the remote areas of Tanzania.

One potential solution that is currently being developed and implemented in the National Solar Program, which falls under the World Solar Program (WSP)

The Government of Tanzania has placed high priority on two of the five UNESCO projects, namely village level and small island solar electrification.

While funding for these projects has not yet been committed, the Government is currently in the process of actively seeking donor support for them.

Within the energy sector, the electricity sub-sector contributes approximately 0.6% of the total energy consumption.

The per capita electricity consumption in Tanzania is currently 46/KWh per annum, but is growing at a rate of between 11 and 13 percent.

Because the majority of Tanzania's installed capacity, 381 MW, comes from hydropower and because hydropower is prone to draughts, some thermal power stations have also been installed in the country in order to.

The Government is currently working to encourage investment in the electricity sub-sector in order to expand its generating capacity and distribution systems while, at the same time, is also working to develop the local energy sources, including wind energy, solar energy and coal.

The Tanzania mining sector is responsible for approximately 2.3% of the overall GDP and, based on the Development Vision 2025 plan, is expected to account for 10% of the GDP in the coming years.

Through the exportation of non-traditional materials, the Tanzania mining sector has become one of the leading methods for generating foreign exchange in the country.

The potential for employment opportunities within this sector are also developing and increasing.

The mineral resources that are available in the country also have great potential for further discovery and development, particularly with regard to materials such as gold, diamonds, base metals, ferrous minerals as well as a variety of gemstones, including the rare tanzanite gemstone.

The foundation of Tanzania's mineral production capacity has consistently relied on the exploration and discovery of diamonds and gold.

For several decades, Tanzania has been a significant diamond producer in the region, with over 300 kimberlites confirmed in the country, 20% of which are diamondiferous.

Most of the diamonds in the country originate from the Williamson Diamonds Mine at Mwadui, where commercial production began in 1925.

Currently, the mineral resources in Tanzania compose over 52% of the country's total exports, a large part of which is gold.

The discovery and exploration of gold in Tanzania offers one of the best areas for investment in the country's mining sector.

Tanzania is thought to have the largest gold reserves in Africa behind South Africa and, for this reason, the country has been the major focus for the exploration and development of gold on the African continent, receiving as much as 15% of the exploration expenditure in Africa.

Because of its growing importance in the region, the mining industry in Tanzania grew from 17% to 27% in 1999.

During the 1990's, gold exploration also grew at a rapid rate because of advances in modern technology and in refining models.

The focus for the exploration of gold in Tanzania has centered mostly around the greenstone belts around Lake Victoria, where several large deposits have already been discovered and are being developed.

Other materials such as coal and uranium as well as other industrial minerals such as soda, kaolin, tin, gypsum, phosphate and dimension stones can be found in Tanzania and are readily available at attractive economic rates.

However, while these other minerals play key roles in the continued development of the mining industry in Tanzania, gold continues to see the majority of developments within the sector.