Patience may pay dividends for Tanzania's gas sector

Significance

The warning is only the latest in a series of moves by President John Magufuli’s government to tighten its control over the mining sector, where it alleges fraud and underreporting of production and profits is rife. However, dramatic headlines about Tanzania’s rows with mining companies mask a more complex reality in which some foreign investment projects are working markedly better than others. Despite slow progress, the most important may include plans to develop Tanzania’s estimated 57 trillion cubic feet of offshore gas -- and build a 30-billion-dollar domestic liquefied natural gas (LNG) processing plant.

Impacts

• October's separation of the energy and mining ministries will enhance specialisation and firewall the energy sector from mining conflicts.
• Relations with mining companies will probably remain fractious, despite the recent financial settlement with Acacia Mining.
• Energy projects will likely make only slow progress in the short term as new Energy Minister Medard Kalemani transitions into his new role.
• Neighbouring Mozambique’s more advanced LNG development may provide a useful template for Tanzania to follow.