Dar es Salaam. The government is expected to conclude a long-awaited joint venture agreement with a new investor for the integrated Liganga and Mchuchuma projects by September 30 in what would mark a major milestone for one of the country’s strategic industrial ventures.
The $3 billion project, located in Ludewa District in Njombe Region, combines coal mining, power generation, and steel production, and has long been seen as a cornerstone of Tanzania’s industrialisation ambitions.
First prioritised through a 1996 cabinet paper, the project has faced nearly three decades of delays caused by financing hurdles and slow negotiations with partners.
Industry and Trade minister Selemani Jafo said progress has accelerated this year following the entry of Shudao Investment Group Company Limited (SDIG) as the new partner. The company acquired 100 percent of the shares from Sichuan Hongda (Group) Company Limited in 2024.
According to him, a Government Negotiation Team was formed to hold talks with the investors for the project which implementation is overseen by the National Development Corporation (NDC).
The team has already held four formal meetings with SDIG since January, culminating in a high-level visit by senior government officials to China in June to resolve key issues such as shareholding arrangements and to secure firm commitments to begin implementation.
“The agreements are expected to be finalised by September 30, 2025, after which they will be signed and a groundbreaking ceremony will be held,” Dr Jafo, adding that another round of negotiation sessions took place from September 8 – 12.
The government has already cleared a major hurdle by compensating 1,142 residents to make way for construction, spending Sh15.4 billion on the exercise.
The project is designed to become one of Tanzania’s largest industrial investments. It will develop a major coal mine at Mchuchuma, a 600-megawatt coal-fired power plant, and an iron ore mine at Liganga, together with a steel plant capable of producing more than a million tonnes of finished products every year.
The two sites will be connected by a 220-kilovolt power transmission line and a new road link, ensuring seamless operations between the mining, power, and steel facilities.
It is estimated that the project will create over 6,600 direct jobs and more than 26,000 indirect opportunities for surrounding communities, a significant boost for Njombe Region.
It is also expected to generate more than $142 million annually from coal sales, $308 million from electricity sales, and additional income from iron, titanium, vanadium and aluminium sulphate production. Officials argue that this will help reduce Tanzania’s dependence on imported steel and industrial raw materials, saving valuable foreign exchange while stimulating domestic industries such as construction and manufacturing.
Alongside Liganga and Mchuchuma, NDC is advancing other strategic projects designed to supply the raw materials needed for Tanzania’s industrial base. In Ludewa, the corporation has signed a joint venture with Fujian Hexingwang Industry Tanzania Co. Ltd to develop the Maganga Matitu iron ore project, which contains an estimated 101 million tonnes of ore with significant iron, titanium, and vanadium content. Compensation has been paid to nearly all affected residents, clearing the way for development.
In Monduli District, Arusha Region, NDC is also progressing with the Engaruka Soda Ash project, which aims to produce soda ash for use in industries ranging from glassmaking and detergent manufacturing to paper and water treatment. More than 85 per cent of residents have already received compensation.
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