The government has issued a sweeping directive requiring coal stakeholders to establish a national association within seven days, aiming to improve coordination, curb market cartels and boost revenue collection in one of the country’s fastest growing mineral sectors.
Speaking yesterday in Dodoma during a meeting with coal producers and traders, Minister for Minerals, Anthony Mavunde, said the sector faces growing challenges that undermine competitiveness and weaken Tanzania’s position in regional markets.
He told stakeholders that the government expects practical, immediate reforms to translate the country’s mineral wealth into sustainable national income.
“I called this meeting so you can tell me the quickest ways to reduce bottlenecks and raise revenue,” Mr. Mavunde said.
He noted that President Samia Suluhu Hassan has directed that Tanzania’s natural resources must play a stronger role in driving economic growth.
He explained that a formal association would enable unified engagement with the government and the Mining Commission, streamline communication, and allow better monitoring of the entire coal value chain.
Highlighting the urgency of coordinated action, Mr Mavunde cited recent National Bureau of Statistics data showing the mining and quarrying sector grew by 11.3% in 2024/25, with coal among the major contributors.
He urged stakeholders to explore the full value chain, including domestic processing opportunities, instead of relying heavily on exports currently, over 80% of Tanzania’s coal is shipped abroad, leaving only a small share for local industries.
During the meeting, stakeholders raised concerns over rising royalties, the need to participate in determining indicative prices, increasing port charges, and the influence of unregulated traders destabilising the market.
TANCOAL Chief Executive Officer, Daniel Mikenze, said Tanzanian coal exporters face significant disadvantages compared to suppliers from South Africa, mainly due to higher royalty rates and rising port handling charges, which recently increased from US$6 to US$12 per tonne.
He added that the situation is further worsened by crossborder traders who buy coal cheaply in Tanzania and resell it in neighbouring countries at suppressed prices, creating cartel-like distortions that set unfair market benchmarks.
“The mistake we make in Tanzania is conducting this business individually. We end up competing among ourselves in a small domestic market and then in foreign markets. We must unite,” Mr. Mikenze said, noting that producers have agreed to form an association to work with the Mining Commission on pricing, market monitoring, and overall regulation.
He stressed the importance of coal stakeholders being involved in setting indicative prices, arguing that without their technical input, published rates fail to reflect real operational conditions in the mining sector.
Mr. Mikenze also highlighted that Kenya, a major buyer, treats Tanzania as a buffer market rather than a primary source, turning to South Africa and Mozambique when international prices fall.
This makes Tanzania strategically important but vulnerable to regional price fluctuations.
He noted that Kenya alone consumes between 250,000 and 400,000 tonnes of coal annually, mainly for cement and steel production.
With the country’s construction boom ongoing, demand is rising offering Tanzania a significant opportunity if it remains competitive.
Mr. Mikenze said adjusting or removing royalty charges at the point of sale would help Tanzanian coal better compete with South African supply.
Following the concerns, Mr. Mavunde directed the Mining Commission to expedite the review of royalties and port-related charges and ensure no indicative price is released without full consultation with stakeholders.
He also urged producers to prepare a robust case for the Tanzania Ports Authority (TPA) on handling costs, assuring that the government will support fair, evidence-based reforms to grow the sector.
He added that the government has already appointed a special officer to coordinate coal-related matters, insisting that all concerns must now be channelled through the established system for timely solutions.
