Tanzanian President Urges Swift Investor Selection for $3 Billion Liganga Steel Project

Tanzanian President Samia Suluhu Hassan has directed her government to expedite the selection of an investor for the long-stalled $3 billion Liganga iron ore-to-steel project and the Mchuchuma Coal projects. These ventures have faced a 14-year delay because of unresolved issues with tax incentives and investor negotiations.

During the inauguration of an assembling plant for trucks and tipper vehicles at Kigamboni in Dar es Salaam, President Hassan emphasized the urgency of finalizing the investor selection process. She instructed the ministries of Industry and Trade and the President's Office (Planning and Investments) to act swiftly to secure iron production for local factories.

Why this matters: The development of the Liganga iron ore-to-steel project and Mchuchuma Coal projects has significant implications for Tanzania's industrial growth and economy. If successful, the projects could reduce the country's reliance on imports and create new opportunities for local factories and industries.

"You need to expedite the selection of the most suitable investor to commence iron production for factories such as this one. Let's swiftly conclude this matter to secure the iron," said President Hassan.

The Liganga project, initially awarded to Chinese firm Sichuan Hongda Group Limited in 2011, has seen little progress. The project remains a priority for the Tanzanian government, but unresolved issues regarding tax incentives and investor negotiations have stalled its development.

The Tanzania China International Mineral Resource Ltd. (TCIMRL), which is spearheading the project, claims that the government has not yet gazetted the approved tax incentives. These incentives include a 10-year tax relief, which the company deems crucial for the project's progression. TCIMRL is seeking tax incentives on cargo or materials to be imported for construction, spare parts and machinery, and also tax relief on fuel.

Deputy Minister for Industries and Trade, Exaud Kigahe, has attributed the delay to the investor's failure to attend negotiation meetings. However, TCIMRL Deputy CEO Eric Mwingira countered this claim, stating that the government has not yet endorsed the necessary tax incentives.

"The project contract was signed in 2011 and investors are calling on the government to endorse the tax incentives, including ten years of relief, for the project that will run for between 50 and 100 years," said Mwingira.

Despite the challenges, the National Development Corporation (NDC) has made significant progress in completing compensation payments to residents affected by the Mchuchuma and Liganga Integrated Project. TCIMRL has also applied for and been granted two Special Mining Licenses (SML) for both projects.

The Liganga iron ore-to-steel project and Mchuchuma Coal projects, valued at over $3 billion, are critical for Tanzania's industrial development. They are expected to provide steel for local factories, reducing the country's reliance on imports.

President Hassan's directive to expedite the investor selection process is seen as a vital step towards reviving these stalled projects and ensuring the country's industrial growth.

Key Takeaways

• Tanzanian President Samia Suluhu Hassan directs government to expedite Liganga iron ore-to-steel project and Mchuchuma Coal projects.
• Projects valued at $3 billion, stalled for 14 years due to tax incentive and investor negotiation issues.
• President Hassan emphasizes urgency to secure iron production for local factories and reduce imports.
• TCIMRL claims government has not gazetted approved tax incentives, including 10-year tax relief.
• Projects' success could reduce Tanzania's reliance on imports and create new opportunities for local industries.