Value addition isn’t one-size-fits-all

Value addition is often framed as a silver bullet—turning raw minerals into refined products, driving job creation, tech transfer, export growth, and industrial development. But there’s more than one type.

Beyond the obvious economic gains, there’s strategic value addition: controlling access to a mineral that underpins a lucrative sector, even if the immediate economics are marginal. Sometimes, refineries exist to anchor monopolies—breaking even at best—while profits flow from downstream manufacturing.

Tanzania is no exception to the Sub-Saharan trend of wanting more than just raw ore exports. But with the UK-funded Manufacturing Africa programme’s report Minerals Value Addition in Tanzania Perspective comes a hard question: whose value are we adding?

The problem with outsourcing policy

When strategic thinking is outsourced to foreign actors, national objectives risk being diluted by donor agendas. The UK, curiously, is hardly a role model here. Its own critical minerals sector suffers from outdated geological mapping, underinvestment, and an overreliance on policy documents long on ambition, short on delivery. If the UK cannot secure its own supply chains, why should Tanzania follow its blueprint?

Priority minerals: whose “regional” demand?

The report identifies 11 priority minerals via a push–pull model based on production and “high regional demand.” In reality, regional seems to mean “Chinese manufacturing demand,” not East African industrial needs.

Critical: graphite, REEs, nickel, iron, copper, cobalt
Strategic: gold, limestone, phosphate, potash, synergetic minerals

Tanzania’s mining in numbers

• 6 million people employed directly or in related services
• The mining sector accounted for 10.1% of national GDP
• Mineral exports hit a record $4.1 billion in the year ending January 2025—more than half of all non-traditional export income (~$7.1 billion)
• 10 medium-to-large scale mines
• 5th globally in graphite reserves

The $7–11 billion question

The study lists 14 value addition opportunities, grouped into:

• Low-hanging fruit – strategic-mineral-based sectors
• No-regret – gold bars and jewellery
• Big bets – graphite and NdPr metals
• Opportunistic – cobalt/nickel sulphates, steel, copper cathode/wire

Graphite and REEs get special attention—unsurprising, given stakeholder interests. But reality bites: outside China, spherical graphite is rarely produced profitably. Syrah Resources processes in Louisiana, not Mozambique. EcoGraf’s planned Mechanical Shaping Facility in Ifakara could buck the trend with funding and an Export Processing Zone granting a decade-long tax exemption. The short-term benefit to Tanzania is limited; the long-term payoff hinges on attracting an anode facility partner—difficult without ex-China know-how and solutions for anode degradation during transport along poorly maintained infrastructure.

REE metals are equally fraught. Bans on tech exports, scarce expertise, and logistics bottlenecks make profitable ex-China production rare. Success here almost certainly requires Chinese partners—raising questions about dependency, intellectual property, knowledge transfer, and strategic leverage.

Nickel and cobalt: risky ground

Indonesia’s nickel monopoly, Chinese EV-sector demand slowdown (and the rise of sodium-ion popularity), and volatile pricing make nickel a gamble. Cobalt—largely a byproduct of nickel and copper—faces structural oversupply. Add in China’s refining dominance and deliberate overproduction by giants like CMOC, and Tanzania’s cobalt prospects dim.

Misaligned priorities

The report rightly stresses policy reform, finance access, and infrastructure—but these solutions rely heavily on developed-world capabilities. Tanzania, ranked 117th of 167 on the Legatum Prosperity Index, will face a choice between sovereignty and foreign capital.

Its deprioritisation of coal reflects UK preferences, not Tanzanian industrial realities. Processing, refining, and manufacturing require cheap, reliable power. Coal—alongside hydro—is essential. The “green transition” is energy addition, not fossil fuel phase-out; 2024 saw record coal demand of 8.77 billion tonnes. No country has industrialised without it.

A better playbook

Tanzania can still anchor value addition in national interest by:

• Linking mineral royalties to a sovereign wealth fund with a 20–50 year mandate
• Locking in legal stability, transparent frameworks, and investor-friendly taxation
• Coordinating with peer nations on African-market manufacturing and high-quality export goods

The potential is real. But without governance discipline, robust negotiation, and a clear-eyed view of market realities, Tanzania risks adding value—just not for Tanzanians.