Tanzania is set to strengthen its position in the global mining industry following the signing of key agreements to develop the Panda Hill Niobium Project in Mbeya Region, a major investment expected to transform the country into one of the world’s producers of the rare strategic mineral.
The project, estimated to cost TZS 700 billion, will be implemented through Panda Hill Tanzania Limited with investment from the United States-based firm Denham Capital.
Speaking during the signing ceremony, the Minister for Minerals, Anthony Mavunde, said the project marks a historic step for Tanzania as it seeks to expand its footprint in the global supply of strategic minerals.
He said niobium is among the rare minerals in high demand worldwide due to its critical role in strengthening steel and producing high-performance alloys used in major infrastructure, aerospace technology and modern industries, including electric vehicles.
According to the minister, the global niobium market is currently dominated by a few countries, with Brazil producing nearly 80 percent of the world’s supply, another Brazilian producer contributing about 11 percent and Canada accounting for approximately 6 percent.
Through the Panda Hill project, Tanzania is targeting to become the fourth-largest producer globally, contributing around 4 percent of the world’s niobium supply with an estimated production capacity of about 100,000 tonnes annually.
Mavunde said the investment reflects the government’s broader strategy to ensure the mining sector contributes more significantly to national development by encouraging value addition within the country.
He noted that the vision championed by President Samia Suluhu Hassan seeks to move the country beyond the export of raw minerals by promoting local processing and industrial production.
“This project demonstrates our commitment to ensuring that Tanzania not only extracts minerals but also processes them locally to create more value, more jobs and greater economic benefits for our people,” he said.
The Panda Hill project will involve the construction of a niobium mine, a beneficiation facility and a plant to produce ferroniobium, a high-value alloy used in advanced steel production.
Once completed, the ferroniobium smelting plant will be the first of its kind in Africa and the fourth globally built in the past four decades, placing Tanzania among a small group of countries capable of producing the industrial alloy.
Dennis Cook, General Manager of Panda Hill Tanzania Limited, said the signing of the agreements marks the beginning of a new implementation phase for the project after several years of engagement with the government.
He noted that the project was initially expected to start construction in 2017 before regulatory changes required further negotiations.
Since then, the company has worked closely with authorities to finalize the framework needed to advance the investment.
Cook said the next steps include securing a Special Mining Licence, updating the feasibility study to reflect current investment costs, integrating grid electricity into the operational plan and assessing global markets for ferroniobium to ensure competitiveness.
The project’s products are expected to be exported to markets across Africa, Asia, Europe and the United States, positioning Tanzania within high-value global industrial supply chains.
In addition to strengthening Tanzania’s international trade position, the project is expected to generate significant opportunities for local businesses.
According to Panda Hill Tanzania Limited, the project could generate local procurement worth about USD 1.77 billion throughout its lifespan, with approximately 70 percent of goods and services expected to be sourced locally during the production phase.
This is expected to create long-term opportunities for Tanzanian companies in areas such as construction, engineering services, transport, maintenance, catering, security and logistics.
Employment creation is also expected to be significant. Mavunde said the project will create more than 1,600 jobs during the construction phase and around 600 permanent jobs once operations begin, with the total number of direct and indirect beneficiaries projected to reach about 7,000 people.
The project site is located within the Songwe Agricultural Prison area where about 5,434 acres have been allocated for development.
As part of the implementation plan, the government will construct a new modern prison facility to replace the current one, which officials say will rank among the most modern correctional facilities in East and Central Africa.
The minister emphasized that community development will remain a key pillar of the project, with the investor required to implement social responsibility initiatives while the government collects revenues through taxes, royalties and other statutory payments.
Under the project structure, Tanzania will hold a 16 percent free carried interest, ensuring the country participates directly in the ownership and strategic decision-making of the investment.
The Framework Agreement was signed on behalf of the government by Deputy Attorney General Samwel M. Maneno, while the Shareholder Agreement was signed by government representatives including Treasury Registrar Nehemiah Mchechu, completing the legal framework required to advance the Panda Hill Niobium Project.
Officials said the investment represents one of the most significant strategic mineral developments in Tanzania in recent years, with the potential to reshape the country’s mining sector and strengthen its role in the global supply of critical minerals.
