EXTRACTIVE INDUSTRIES

Tanzania has commercial deposits of a wide range of minerals, as well as potentially significant oil and natural gas deposits.

Gold accounts for 90% of mineral exports (EIU 2007). Five gold mines have the lion's share of Tanzanian mining: the Bulyanhulu and Pangea mines, owned by Barrick Gold (Canada) and Khama mining company (Barrick is a major shareholder); Geita gold mine, owned by AngloGoldAshanti; Golden Pride Mine, owned by Resolute (Australia); and the North Mara mine, owned by Placer Dome (Canada).

Tanzania ranks fourth in Sub-Saharan Africa in gold production, with exports worth US$773m in 2006. Despite the relatively large value of exports, the general opinion is that Tanzania has not been able to get a fair deal in the mining sector. From US$3 billion in total exports between 1998 and 2005, the government received only US$90 million in revenues: just 3% of export value.

Mining accounted for 3.8% of GDP in 2006, and growth in the mining sector increased from 15.7% in 2005 to 16.4% in 2006. In addition to gold, diamonds, various gemstones, coal, soda ash, nickel and platinum deposits have all been found.

Tanzania's petroleum sector is dominated by natural gas as commercial quantities of oil have yet to be discovered. Tanzania currently has two natural gas fields with proven reserves, the relatively advanced Songo Songo field with estimated proven reserves of 420 Bcf and the as yet unexploited Mnazi Bay field. Exploration activity has increase in recent years on expectations of promising opportunities, though tension surrounding the status of the semi-autonomous islands of Zanzibar has slowed activity in that area.

More than a dozen international oil and gas concerns are in operation in Tanzania, including companies from the UK, Australia, Canada, Norway, Brazil, Holland, France and the UAE.

Tanzania has sustained strong economic performance for several years, solidifying its position as a mature stabilizer. Since 2000, real GDP has grown by 6.3 percent a year on average. Growth has been broad based, and driven largely by productivity gains; a sharp contrast from the long period of economic stagnation experienced previously. Annual inflation, which had averaged some 30 percent in the past two decades, fell to single digits in 1998 and has generally been around the 5 percent mark since.