Tanzania - Industrial and mining sector survey (Vol. 2 of 3) : Current status and development prospects of the mining sector

Report No. 647-TA 6 d[lzd[Inia: Indusurial andu>te Mining Sector Survey Volume II: Annex 11: Current Status and Development Prospects of the Mining Sector March 31, 1975 Industrial Projects Deparoinent Not for Public Use Document of the International Bank for Reconstruction and Development intemnational1 DevelopmentI Associatio This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  1 Tanzanian Shilling = US$0.14 1 US$ = 7.14 Tanzanian Shillings This report is based on the findings of a mission to Tanzania in September 1974 consisting of P. Bottelier, A. Choksi, A. Drysdall (consultant), L. Graham (consultant), D. Papageorgiou and A. Sandig.  TANZANIA: INDUSTRIAL AND MINING SECTOR SURVEY Structure of Report VOLUIIE I - MAIN REPORT ANNEX I - THE PRICING OF INDUSTRIAL GOODS VOLUME II - ANNEX II - CURRENT STATUS AND DEVELOPMENT PROSPECTS OF THE MINING SECTOR VOLUME III - ANNEX III - CURRENT STATUS AND DEVELOPM,1ENT PROSPECTS OF ENGINEERING AND BASIC METAL INDUSTRIES ANNEX IV - CURRENT STATUS AND DEVELOPMENT PROSPECTS OF THE TEXTILE INDUSTRY   AN-NEX lI CURRENT STATUS A-ND DEViLOPPIENT PROSPECTS OF THE MINING SECTOR IN TANZANIA TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS .......................... 1 CHAPTER I - PROSPECTING AND EXPLORATION ... ....... 6 A. Policy Issues ..... .................. 6 B. Current Activities .... ................. 10 Government activities .... .............. 10 Private sector activities .... ........... 11 The search for oil and gas .... .......... 12 C. Information Flow and Review .... ......... 13 CHAPTER II - MINING ............................... 15 A Diamnnds .-.. ............................ 16 B. Gemstones (other than diamonds) ... ...... 21 C. Gment- .- 22 D. Salt .................................... 24 E. Gold ....24 F. Coal .................................... 24 G. Tin and Wnlfrm --- ----- 2_ H. Mica .... 25 I. Kaoli. . 25 J. Gypsum .................................. 26 K. Magnesite... 26 L. Operating Efficiency of Existing Mines ... 26 CHAPTER III - MINING, TAXATION, ACCOUNTING METHODS AM1\ rITT-A_nL rDAnwC: & 9 NiUAT)U'DMTlt TITCT?,Tt1rTc TTTT1TT %ILL" L-s & \. L y V . . ........... .L.V.................... . .  TABLE OF CONTENTS (Continued) TABLE OF CONTENTS (Continued) Page No. CHAPTER V - EXPANSION PLANS ..... ................. 38 A. General Outline .......... .. ............ 38 B. Gold ................................... 41 C. Cement ....... ................... ....... 43 D. Phosphate ................ ............... 44 E. Iron and Steel .......... .. ............. 46 F. Coal ................. .................. 47 G. Beach Sands ...... ...................... 48 H. Natural Gas ...... ..................... . 50 I. Other Projects ...... ...... ............. 52 Tin ... ................................. 52 Gypsum ................................. 52 Gemstones .............................. 52 Dianlonds ... 52 Salt ................................... 52 Magnesite ....... ....................... 52 Soda Ash ....... ........................ 53 Nickel ....... .......................... 53 Sand and Kaolin ...... ................... 53 Niobium, etc. ...... .................... 54 CHAPTER VI - MANPOWER CONSTRAINTS .... ............ 55 APPENDIX - The Uses of the Products from Natural Gas BIBLIOGRAPHY  ANNEX II Page 1 SUMMARY AND CONCLUSIONS 1. Although the present level of mining and prospecting in Tanzania is at a low ebb, it would be wrong to assume that this situation is a fair reflection of either the history of the sector or its potential. A number of factors - including the recent establishment of the State Mining Corp- oration in 1973,. the completion of the Tazara Railway giving access to im- portant coal and iron reserves in the southwest and the discovery of natural gas off the coast near Kilwa - have contributed to the possibility of a major breakthrough in mineral development in the coming years. There are, however, serious manpower. technical and financial constraints to the realization of that potential. There are also a number of policy issues, particularly with reeard to the role of Drivate foreign canital in mineral develoDment, that need to be resolved. Accelerated mineral development could contribute significantly to an imnrovement in Tanzania's balance of navments nosition. 2. The contrihution of the mining sector to gross national product; exports and wage employment is at present small and measures approximately 92