An Eye Opener Week-long Visit to South Tanzania 1500MW Electricity Complex
Last week the Parliamentary Public Organizations Accounts Committee (POAC) that I Chair embarked on our first week-long visit in accessing the state of the 3 Mega projects in Southern Tanzania that are being carried out by National Development Corporation (NDC).
We set off from Dar-es-Salaam and slept in Njombe town (expected capital of new Njombe Region. We drove to Ludewa then to Mchuchuma on to Liganga after that we set off to Ruvuma Region where we started off from Songea then to Ngaka Coalfields and we moved on to Mbeya Region to visit our the last project which was Kiwira Coal Mine located in Ileje/Kyela districts.
On the way we encountered a number of problems that any typical Mwananchi comes across everyday. Our bus broke down (9 of us drove in one car from Iringa to Makambako), we had to contend with lack of accommodation in some places, in Ludewa for instance Hon. Deo Filikunjombe MP of parliament of the area and Vice-Chairman of POAC provided accommodation in his own house and housed MPs from other political parties which goes to show what a great country we live in. In Mbeya we stayed in a work in progress hotel; some of the highlights of a very informative, exciting and thought provoking trip on how we can move forward these projects.
These 3 Coal mining mega projects are touted as the biggest electricity projects since we attained our independence over 50 years ago and would have a combined total of 1500MW and is being dubbed as South Tanzania 1500 MW Electricity Complex that will transform the Southern Corridor and Tanzania as a whole. It should be noted that currently we have 1034 MW installed capacity in terms of electricity generation and we are only generating about half of that estimates put it at 560 MW.
Mchuchuma Coal To Electricity Project
Our first visit took us to Ludewa District in Iringa Region to Mchuchuma Coal Mine which happens to fall in the constituency of our Vice-Chairman Hon. Deo Filikunjombe, MP of Ludewa Constituency.
The Mchuchuma coal mine has yet to kick off, what has been done so far is a feasibility study to determine the amount of coal reserves that we have at Mchuchuma Coal Mine and the floating of a tender for a strategic partner to take up the project in partnership with National Development Corporation (NDC) which they have done and a Chinese company by the name Sichuan Hongda Corporation Limited has won the tender and they are currently in talks and carrying out due-diligence.
It is estimated we have a total of 536 million tons of Coal reserves that can add up to 1.2bn tons at Mchuchuma Coal Mine.
With Mchuchuma Coal Mine, NDC together with Sichuan Hongda Corporation Limited intends to mine 3 million tons of coal per annum and mine mouth thermal power station of 600 MW. Half of the generated power will be supplied to the Liganga Iron Ore project and the rest will be feed into the national grid. At this rate, Mchuchuma can produce Tanzania all its current power for the coming 150 years! I asked Dr. Mzindakaya, the Chairman of NDC what went wrong with our elders not to exploit these resources, he said DECISION MAKING!
Sichuan Hongda Corporation Limited and China Africa Development Fund plan to invest about USD $ 3 Billion Dollars in both the Mchuchuma Coal and Liganga Iron ore project. They expect to make about USD $ 1.2 Billion dollars a year. Somebody informed me that this Chinese company is experienced in Zinc mining and has no experience in Power generation….Due diligence?
Liganga Iron Ore Project
Our second visit took us to Liganga Hills and surrounding areas which has the biggest known iron ore resources in the country estimated to contain reserves ranging from 200 million to over 200 Billion tons.
On top of that the iron ore have excellent range of magmatic associated minerals that is Vanadium and Titanium magnetite which is a major source of raw material for iron and steel industry.
The Challenges so far in implementing these projects are:
Lack of sense of urgency in decision making by the government to get these projects going- A killer disease and hence a go slow culture, Corruption as everyone wants a cut from the concerned parties. This vice is very pervasive in this country of ours, Lack of Infrastructure: Road, Rail and Electricity, Lack of connection to feed into the National Grid, Lack of qualified local experts for these projects. All these challenges can be overcome by having results oriented, pragmatic Ministers, sack corrupt bureaucrats and integrate the projects for coordination. A Presidential Special appointee on South Tanzania 1500 electricity complex? Perhaps!
Ngaka Coalfields Project-400 MW Power Station
Located in Mbinga district about 250km on the Njombe-Mchuchuma-Manda road, this is one of the most advanced and exciting development projects that the POAC committee saw and a lot of work has been done and they are currently having 45 staff on the ground.
The Ngaka Coal Project is being developed through Tancoal Energy Limited (Tancoal), a joint venture company between Atomic’s 85% owned Tanzanian subsidiary, Pacific Corporation East Africa (PCEA), which owns a 70% interest in Tancoal, and the National Development Corporation (NDC) of Tanzania, which owns 30%.
They have already completed their Bankable Feasibility Study (BFS), their goal is the development of a thermal coal mining operation at Ngaka and the development of a 400 megawatt power station, utilizing proven clean coal gasification technology, at the Ngaka mine site. Malawi has already asked for a contract to supply them with 150MW from this project (money starts to flow?).
At the moment they are waiting for their special mining license from the Ministry of Energy and Minerals to commence exploration. The estimated coal reserves are 200 million tons and it is said to have the best coal in the country.
Kiwira Coal Mine Project
Our last visit took us to Kiwira Coal Mine which is currently at the hands of Kiwira Coal and Power Limited(KCPL) which is a company jointly owned by Tanpower Resources Limited (70%) and Government of Tanzania (30%).
The Government is at present finalizing the transfer back of shares from Tanpower Resources back to the government in order to transfer ownership to National Social and Security Fund (NSSF) and STAMICO to run Kiwira Coal Mine.
The government has committed in transferring ownership to NSSF. NSSF on their part have committed to buy it out and all its debts. It’s under this guise that NSSF took it upon them to give a presentation on their future intentions and how they will revive and develop Kiwira in the next 5 years in order to produce 500MW electricity that they will sell to TANESCO.
We travelled back from Kiwira through Mbeya, slept in Iringa and then back to Dar es Salaam. We brought no electricity from the visit but HOPE.
* It’s a mind boggling question that we import 200,000 tons of steel yearly while our own iron ore is standing bare on the hills of Liganga in Ludewa.
*Does it make sense importing 230,000 tons of coal every year from South Africa while we have the best quality coal lying idle in Ngaka, Mbinga districts. Of course one will argue with trade theories of comparative or even competitive advantage! Prices of iron would half, avoid our rails from being stolen as scrap metal(chuma chakavu) for hungry steel mills and save our forex!
*Similarly for coal, we would save us an estimated US $ 40million a year! All in all jobs! Jobs! jobs let alone the multiplier effect.
Let us make decisions and turn South Tanzania 1500MW electricity complex live! No more promises, let us deliver power to the people………