Tanzania & US Ink Deal to Boost Niobium Production & Mineral Processing

MBEYA – The government of Tanzania and Panda Hill Tanzania Limited have signed a comprehensive agreement to develop the Panda Hill Niobium Project in Mbeya Region, a move officials say will position Tanzania as a key player in the global supply of a strategically important metal and strengthen trade ties with the United States.

The deal, formalized on March 24, 2026, centers on the extraction and processing of niobium, a rare metal crucial for manufacturing high-strength steel alloys used in infrastructure, electric vehicles, and aircraft engines. Minister for Minerals Anthony Mavunde stated the agreement represents a significant step toward strengthening trade relations with the US, given niobium’s applications in high-end industries.

Currently, the global niobium market is dominated by Brazil, which accounts for approximately 80 to 90 percent of world supply, with another Brazilian producer contributing around 11 percent and Canada supplying 6 to 8 percent. Tanzania aims to become the world’s fourth-largest producer, targeting an annual production of 100,000 tonnes, representing roughly four percent of global demand.

The agreement includes a 16 percent free carried interest for the government of Tanzania, held on behalf of its citizens through the Office of the Treasury Registrar (OTR). This model allows for government participation in major projects without requiring upfront capital investment from the state, according to Treasury Registrar Nehemiah Mchechu.

A key component of the project is the construction of a ferroniobium plant, enabling the production of a high-value industrial material for export to markets in Africa, Asia, Europe, and the United States. Officials emphasize this value-addition strategy, aligning with President Samia Suluhu Hassan’s directive to prioritize domestic processing of minerals rather than exporting raw materials. The ferroniobium plant would be the only one of its kind in Africa, and one of only four globally, alongside facilities in Brazil and Canada.

Panda Hill Tanzania Limited’s General Manager, Dennis Cook, said the agreements resolve previous challenges stemming from changes in mining laws in 2017, which had paused the project. The company will now focus on securing a Special Mining Licence and updating feasibility studies, including capital and operating cost estimates, and integrating grid electricity into the project’s operating model.

The project is expected to generate more than 1,600 jobs during construction and approximately 600 permanent positions, with total direct and indirect beneficiaries estimated at around 7,000. Panda Hill projects a life-of-mine local procurement spend of $1.77 billion, with annual local procurement exceeding $60 million, aiming to integrate Tanzanian firms into long-term supply chains.

The project site is located on 5,434 acres of land within the Songwe Prison farm. As part of the agreement, plans include the construction of a new, modern prison facility, intended to be among the most advanced in East and Central Africa.

The upfront investment in the project is estimated at 700 billion Tanzanian shillings. This includes $53 million for the niobium mine and $134 million for the beneficiation, furnace, and smelter facilities. The signing ceremony involved the execution of a Framework Agreement by Deputy Attorney General Samwel Maneno, and a Shareholder Agreement by Maneno and Treasury Registrar Nehemiah Mchechu, formalizing Tanzania’s participation and oversight framework.