Coal

Tanzania holds an estimated reserve of 5 billion tonnes of coal, with production reaching 3.9 million tonnes in 2024, valued at TZS 1,035.9 billion.

Coal is classified as an energy mineral in Tanzania alongside uranium, and it ranks among the country's leading mineral exports together with gold and copper concentrates.

The commodity plays a dual role, supplying domestic cement manufacturing and power generation while serving fast-growing regional markets in Burundi, Rwanda, Kenya, and Uganda.

Coal Reserves and Resource Base

Tanzania has an estimated reserve of five billion tonnes of coal.

Coal is one of two energy minerals identified in Tanzania's mineral endowment, the other being uranium.

Known coal deposits underpin several advanced-stage development projects, notably the Mchuchuma and Kiwira coal projects.

Coal Production Performance

In 2024, Tanzania produced 3.9 million tonnes of coal, compared with 3.2 million tonnes in 2023, an increase of 19.9%.

The value of coal produced rose to TZS 1,035.9 billion in 2024 from TZS 878.8 billion in 2023.

In the first nine months of 2025, Tanzania produced 2.3 million tonnes of coal valued at USD 202.6 million.

The production surge was driven by higher demand for coal as an energy source in cement manufacturing, both in the domestic market and in neighboring countries.

Export Markets and Regional Demand

Coal ranks among Tanzania's largest mineral exports, alongside gold and copper concentrates^[2].

Total mineral exports were valued at USD 4.1 billion in 2024, up 16.0% from USD 3.5 billion in 2023, accounting for 60% of all Tanzanian non-traditional goods exports and 25% of total exports.

Regional demand for Tanzanian coal is concentrated in Burundi, Rwanda, Kenya, and Uganda, where it is used primarily as a thermal input in cement production.

Tanzania's position on the Indian Ocean and its role as a trade gateway for eight neighboring countries, six of them landlocked, reinforce coal's export potential across the East African Community and Southern African Development Community regions.

Coal in the National Energy Mix

Coal contributes to Tanzania's electricity generation mix, representing 2.93% of total energy generated^[1].

The full generation mix consisted of hydropower (58.20%), natural gas (34.73%), liquid fuel (4.12%), coal (2.93%), biomass (2.68%), solar (0.23%), and wind (0.06%).

Total energy generation reached 8,501.78 GWh, supported by installed capacity that exceeds electricity demand of 2,505.86 MW^[1].

Coal complements hydropower and natural gas in providing baseload capacity, especially given the reserve margin target of greater than 15%.

Advanced-Stage Coal Projects

Two flagship coal projects are at advanced stages of development: the Mchuchuma coal project and the Kiwira coal project.

The Mchuchuma project sits alongside the Liganga iron ore project, forming an integrated iron/steel and coal development cluster.

The Liganga iron ore project has a planned production capacity of one million tonnes per year of steel products, alongside annual output of about 175,400 tonnes of titanium and 5,000 tonnes of vanadium^[4], with coal from Mchuchuma providing metallurgical feedstock.

Policy and Fiscal Framework

Royalties and Levies on Coal

Coal attracts a royalty rate of 3%, reduced to 1% when coal is sold to domestic industries^[5].

In addition, a 1% clearance and inspection fee applies to all minerals except salt and gold sold to refinery centers.

The Finance Act of 2025 introduced an HIV Response Levy of 0.1% of the gross value of minerals, which applies to coal.

Local Content Regulation

The Mining Act of 2010 introduced local content requirements, obliging mining companies to prioritize Tanzanian employment, goods, and services where feasible.

The Mining (Local Content) Regulations of 2018, as amended in 2019, established the principle that indigenous Tanzanian companies must be given priority in the supply of goods and provision of services in the mining industry, including coal operations.

Clean Coal in the PPP Financing Architecture

In the energy sector, public-private partnerships are earmarked to finance clean coal technology deployment, alongside clean energy generation, waste-to-energy, and large-scale recycling plants.

Investment Opportunities

Coal offers direct investment entry points through the flagship Mchuchuma and Kiwira coal projects, both at advanced stages of development.

Beneficiation and value addition activities for coal as an industrial mineral are formally recognized investment categories, alongside iron ore, lime, soda ash, kaolin, gypsum, and dimension stones.

Clean coal technology deployment is a designated PPP opportunity within Tanzania's energy investment agenda.

Downstream demand is anchored by cement manufacturing in Tanzania and in regional markets across Burundi, Rwanda, Kenya, and Uganda, providing a stable offtake base for new production.

Tanzania was ranked the 4th most attractive destination for mining investment in Africa in 2025, and the 3rd for its mineral potential^[3], providing a supportive backdrop for coal sector capital deployment.

Mining-related infrastructure development, including roads, ports, and power solutions to support operations in remote coal fields, is an additional investment avenue.

Last Update: May 2026

References

1. https://www.ewura.go.tz/uploads/documents/en-1771937532-Electricty%20Sub-Sector%20Performance%20Updates_Dec_2025.pdf (Guide reference #15)
2. https://www.tumemadini.go.tz/media/uploads/annual_reports/2025/11/24/REPORT_PRINT_2025_A3LATEST_compressed.pdf (Guide reference #139)
3. https://www.fraserinstitute.org/sites/default/files/2026-02/annual-survey-of-mining-companies-2025.pdf (Guide reference #140)
4. https://ndc.go.tz/iron-steel/ (Guide reference #146)
5. https://www.tumemadini.go.tz/pages/mineral-royalties-and-inspection-fees-rates/ (Guide reference #157)