By Alfred Zacharia
The government has reaffirmed its commitment to fast-tracking the long-awaited Mchuchuma and Liganga integrated iron and coal project, describing it as a strategic undertaking that will accelerate Tanzania’s journey towards an industrial economy.
Speaking in an interview with Clouds Media in Dar es Salaam, Minister for Industry and Trade, Dr Selemani Jafo, said negotiations with investors are ongoing, with the aim of reaching an agreement that will unlock the project’s implementation.
“We are now focused on the Mchuchuma and Liganga project because it has huge benefits for our nation,” Dr Jafo explained. “Once negotiations are concluded, we will have access to iron ore as raw material, which is critical for sustaining our steel industries and reducing reliance on scrap metals.”
He noted that Tanzania currently hosts 46 steel factories, most of which depend on scrap metal as feedstock—an unreliable source that has fuelled vandalism of steel-based infrastructure.
“With the Mchuchuma and Liganga project in place, these factories will be supplied with reliable raw materials, ensuring steady production, creation of jobs, and a stronger industrial base,” he said.
The minister further revealed that the project will directly support the country’s 13 vehicle assembly plants, which are expected to shift from assembling imported parts to full-scale manufacturing of spare parts and vehicles locally.
“Our goal is to move beyond assembling. We want the entire manufacturing process to take place here, creating more value within Tanzania,” he said.
According to the National Development Corporation (NDC), the project—located in Ludewa District, Njombe Region—will produce 3 million tonnes of coal annually at Mchuchuma, generate 600 megawatts of electricity, and produce 2.9 million tonnes of iron ore and 1 million tonnes of steel at Liganga.
A 220-kilovolt power transmission line will link the two sites.
An estimated $3 billion will be invested in the venture, which is expected to generate 6,600 direct jobs and over 26,000 indirect ones.
Annual revenues include $142 million from coal sales, $308 million from electricity, and nearly $1.3 billion from sales of steel, titanium, vanadium, and aluminium sulphate combined.
Infrastructure upgrades are already underway, including construction of a concrete road from Njombe to the project site. Meanwhile, feasibility studies and financial modelling are being updated, while joint venture contracts and shareholder agreements are being prepared.
The government has also completed land compensation worth Sh15.4 billion for 1,142 affected residents in 2023, paving the way for project execution.
Dr Jafo stressed that under the leadership of President Samia Suluhu Hassan, negotiations with the new investor, Shudao Investment Group Company Limited (SDIG) of China, have gained momentum. SDIG acquired 100 percent of shares from Sichuan Hongda Group in 2024.
A government negotiation team has since held four rounds of talks with SDIG this year, with final agreements on the joint venture and shareholder arrangements expected by September 30, 2025. “Once we agree on the remaining aspects, the implementation will commence immediately,” said Dr Jafo.
If successful, the project will not only reduce Tanzania’s steel import bill but also save the country about $1.7 billion annually in foreign exchange, while transferring vital mining, power generation, and steel-making technologies to Tanzanians.