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In February 2010, Barrick announced plans to spin off its Tanzanian operations into a separate company, African Barrick Gold (ABG). A 25% stake in ABG will then be listed via an IPO in London, with a possible secondary listing in Dar-es-Salaam at a later stage. Barrick will hold the remainder of the company's equity. The IPO is expected to raise some US$1bn, which Barrick will use to fund new projects.
ABG's key assets are four mines in north west Tanzania, which together produced some 716,000oz in 2009, accounting for just under 10% of Barrick's total gold output in that year. In 2009, Barrick's African operations made EBITDA of US$249.5mn on revenues of US$693.4mn, according to the Financial Times. The Tanzanian government has already indicated that it may purchase shares in ABG and has also indicated that Tanzanian nationals may be eligible to participate in the IPO, according to local media reports.
New Data. For 2010, we have made significant changes to the way in which we forecast mining data. As well as using local statistics agencies and associations, we now also use the UN's Industrial Commodity Statistics Database, the US Geological Survey and the World Bureau of Metal Statistics for our historical export and production data. We then forecast from this data using our own proprietary econometric model. Human intervention also plays a necessary and desirable role in our mining forecasts, with experience, expertise and knowledge of industry trends and developments ensuring that we can spot likely future changes and anomalous data that a purely mechanical model would not.
Country Overview
The Tanzanian mining industry is relatively small in terms of value, but its importance is highlighted by the fact that mining earns a substantially significant share of the export revenues for the country. The mining sector contributes approximately 2.3% to annual GDP but the government wishes to expand this to 10% by 2025.
Traditionally, gold and diamond production has been the mainstay of mining production for the country. It is the fourth largest gold producer in Africa, behind South Africa, Ghana and Mali, and ranks among the top producers of diamonds in the world. Another metal that has been catching the spotlight is uranium, with a significant number of deposits being identified in Tanzania. Coloured gemstones are also mined extensively in the country.
Industry Forecast
Tanzania's mineral industry, particularly gold mining, is likely to grow in the near future, with increased production from the North Mara mine and the development of projects such as Buckreef and Tulawaka. Coal and uranium prospecting is also continuing around the country, with a high likelihood of some of these projects becoming productive over the coming years. As a result, we forecast steady growth for the Tanzanian mining sector as a proportion of GDP over the next five years, with risks to the upside if new projects come onstream on schedule.
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SWOT Analysis................................................7
Tanzania Political SWOT ..................................................................................... 7
Tanzania Economic SWOT ................................................................................... 7
Tanzania Business Environment SWOT................................................................ 8
Industry Trends And Developments ..............9
Overview............... 9
Regulatory Structure And Developments .............................................................. 9
Key Projects...................................................12
Gold.................... 12
Nickel.................. 13
Uranium.............. 13
Diamonds............ 14
Coal .................... 14
Business Environment .................................16
Africa Mining Overview...................................................................................... 16
Africa Mining Business Environment Ratings..................................................... 16
Table: Africa Mining Business Environment Ratings.......................................... 17
Tanzanias Business Environment Ratings ......................................................... 17
Legal Issues ........................................................................................................ 18
Labour Force...................................................................................................... 20
Table: Labour Force Quality.............................................................................. 20
Market Orientation ............................................................................................. 22
Table: Inflows Of Foreign Direct Investment To Tanzania, 2001-2006............... 23
Political Environment....................................24
Industry Forecast Scenario ...........................27
Commodities Forecast Copper ........................................................................ 27
Table: BMI Copper Forecast.............................................................................. 27
Table: Copper, 2005-2011.................................................................................. 29
Commodities Forecast Aluminium................................................................... 29
Table: BMI Aluminium Forecast ........................................................................ 29
Table: Aluminium, 2005-2011 ............................................................................ 30
Commodities Outlook ......................................................................................... 31
Table: BMIs Gold Forecast, 2009 And 2010 ..................................................... 31
Global Industry Overview................................................................................... 33
Tanzanias Mining Industry Forecast ................................................................. 33
Table: Tanzanias Mining Industry, 2007-2014.................................................. 34
Competitive Landscape................................35
Table: Key Players In Tanzanias Mining Sector ............................................... 35
Company Monitor..........................................36
Barrick Gold....................................................................................................... 36
IMX Resources.................................................................................................... 37
Midlands Minerals Tanzania .............................................................................. 38
Global Assumptions .....................................39
Table: Global And Regional Real GDP Growth, 2008-2011 (%) ........................ 39
Table: Global Assumptions, 2008-2014.............................................................. 40
Table: Developed Market Exchange Rates, 2008-2011 (average) ....................... 41
Table: Emerging Market Exchange Rates, 2008-2011 (average) ........................ 41
Business Environment Ratings Methodology.............................................................................................43
Table: Mining Business Environment Indicators ................................................ 44
Table: Weighting Of Components....................................................................... 45
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ABG's key assets are four mines in north west Tanzania, which together produced some 716,000oz in 2009, accounting for just under 10% of Barrick's total gold output in that year. In 2009, Barrick's African operations made EBITDA of US$249.5mn on revenues of US$693.4mn, according to the Financial Times. The Tanzanian government has already indicated that it may purchase shares in ABG and has also indicated that Tanzanian nationals may be eligible to participate in the IPO, according to local media reports.
New Data. For 2010, we have made significant changes to the way in which we forecast mining data. As well as using local statistics agencies and associations, we now also use the UN's Industrial Commodity Statistics Database, the US Geological Survey and the World Bureau of Metal Statistics for our historical export and production data. We then forecast from this data using our own proprietary econometric model. Human intervention also plays a necessary and desirable role in our mining forecasts, with experience, expertise and knowledge of industry trends and developments ensuring that we can spot likely future changes and anomalous data that a purely mechanical model would not.
Country Overview
The Tanzanian mining industry is relatively small in terms of value, but its importance is highlighted by the fact that mining earns a substantially significant share of the export revenues for the country. The mining sector contributes approximately 2.3% to annual GDP but the government wishes to expand this to 10% by 2025.
Traditionally, gold and diamond production has been the mainstay of mining production for the country. It is the fourth largest gold producer in Africa, behind South Africa, Ghana and Mali, and ranks among the top producers of diamonds in the world. Another metal that has been catching the spotlight is uranium, with a significant number of deposits being identified in Tanzania. Coloured gemstones are also mined extensively in the country.
Industry Forecast
Tanzania's mineral industry, particularly gold mining, is likely to grow in the near future, with increased production from the North Mara mine and the development of projects such as Buckreef and Tulawaka. Coal and uranium prospecting is also continuing around the country, with a high likelihood of some of these projects becoming productive over the coming years. As a result, we forecast steady growth for the Tanzanian mining sector as a proportion of GDP over the next five years, with risks to the upside if new projects come onstream on schedule.
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- Market: Agriculture, Farming & Raw Materials
- Published Date: 06 Apr 2010
- Report Title: Tanzania Mining Report Q2 2010
- View Report Summary: View Report Summary
- Report Type: Market Report
- Country: Tanzania
- Number of Pages: 45
SWOT Analysis................................................7
Tanzania Political SWOT ..................................................................................... 7
Tanzania Economic SWOT ................................................................................... 7
Tanzania Business Environment SWOT................................................................ 8
Industry Trends And Developments ..............9
Overview............... 9
Regulatory Structure And Developments .............................................................. 9
Key Projects...................................................12
Gold.................... 12
Nickel.................. 13
Uranium.............. 13
Diamonds............ 14
Coal .................... 14
Business Environment .................................16
Africa Mining Overview...................................................................................... 16
Africa Mining Business Environment Ratings..................................................... 16
Table: Africa Mining Business Environment Ratings.......................................... 17
Tanzanias Business Environment Ratings ......................................................... 17
Legal Issues ........................................................................................................ 18
Labour Force...................................................................................................... 20
Table: Labour Force Quality.............................................................................. 20
Market Orientation ............................................................................................. 22
Table: Inflows Of Foreign Direct Investment To Tanzania, 2001-2006............... 23
Political Environment....................................24
Industry Forecast Scenario ...........................27
Commodities Forecast Copper ........................................................................ 27
Table: BMI Copper Forecast.............................................................................. 27
Table: Copper, 2005-2011.................................................................................. 29
Commodities Forecast Aluminium................................................................... 29
Table: BMI Aluminium Forecast ........................................................................ 29
Table: Aluminium, 2005-2011 ............................................................................ 30
Commodities Outlook ......................................................................................... 31
Table: BMIs Gold Forecast, 2009 And 2010 ..................................................... 31
Global Industry Overview................................................................................... 33
Tanzanias Mining Industry Forecast ................................................................. 33
Table: Tanzanias Mining Industry, 2007-2014.................................................. 34
Competitive Landscape................................35
Table: Key Players In Tanzanias Mining Sector ............................................... 35
Company Monitor..........................................36
Barrick Gold....................................................................................................... 36
IMX Resources.................................................................................................... 37
Midlands Minerals Tanzania .............................................................................. 38
Global Assumptions .....................................39
Table: Global And Regional Real GDP Growth, 2008-2011 (%) ........................ 39
Table: Global Assumptions, 2008-2014.............................................................. 40
Table: Developed Market Exchange Rates, 2008-2011 (average) ....................... 41
Table: Emerging Market Exchange Rates, 2008-2011 (average) ........................ 41
Business Environment Ratings Methodology.............................................................................................43
Table: Mining Business Environment Indicators ................................................ 44
Table: Weighting Of Components....................................................................... 45
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