Tanzania Seeks to Revive Liganga-Mchuchuma Steel Production Project
On 15 August 2025, Nicolaus Shombe, Managing Director of National Development Corporation (NDC) of Tanzania, announced that a new study on the Mchuchuma and Liganga mining projects was initiated at the end of July 2025. The study is expected to last six months and will recommend the way forward.
Since 2010, Sichuan Hongda (SSE: 600331) has won the tender to develop the Liganga-Mchuchuma coal mining and steel production project. At that time, the project cost was estimated at about USD 3 billion, but since then, not much progress has been made. Mchuchuma is a coal mine which was intended to fuel the iron ore furnace and power the steel smelter near the Liganga iron ore mine.
Sichuan Hongda even created a local entity called Tanzania-China International Minerals Resources Limited (TCIMRL), which was incorporated in Tanzania in 2011. Under the agreement, #TCIMRL owns 80% of shares and NDC owns 20% in the venture. #NDC would then increase its shareholding to 49%, once TCIMRL has recouped its investment.
The Mchuchuma and Liganga deposits are situated some 50 kilometers apart in the Ludewa District in the Njombe Region. The overall plan is to develop these two mines together as an integrated complex with steel as the final product.
In support of the main project, several side projects were also on the drawing board. First, a 600 MW thermal power plant would be built: 250 MW would go to the steel plant, and 350 MW would be connected to the national grid to enhance electricity access in the surrounding communities. A high-voltage 22kV transmission line linking Mchuchuma to Liganga would also have to be deployed. The road between Mchuchuma and Liganga would also need to be upgraded.
The integrated iron-coal complex would generate more than 6,000 direct jobs and support another 20,000 indirectly. To facilitate the transfer of knowledge and assist in capacity building, the Government of Tanzania has already initiated the setting up of a Technical and Vocational Education and Training (#TVET) Academy to promote skills development geared toward the coal and iron industry.
Based on previous studies, the Liganga mine has reserves estimated at 219 million tonnes of iron ore. Additionally, it can output 175,400 tonnes of titanium and 5,000 tonnes of vanadium annually during the projected 70-year lifespan of the mine. On the other hand, the Mchuchuma mine has an estimated reserve of 428 million tonnes of coal. At the current price of $118 per tonne of iron ore and $141 per tonne of coal, the total worth of these two mines exceeds USD 85 billion.
In 2024, the NDC signed another agreement with Fujian Hexingwang for coal and iron mining at the Maganga Matitu project, which is part of the broader Liganga-Mchuchuma program. The agreement with Fujian Hexingwang is worth USD 77 million.
As recently as February 2025, the NDC issued a 3-week deadline to MM Steel Resources to commence mining activities at the Katewaka Project, which is also in Ludewa. In addition, the NDC has been encouraging the investors in the mining sector to adhere to #ESG norms and carry out #CSR activities. The Tanzanian Minister of Industry & Trade, Suleiman Jafo, even instructed the investors to build two new buildings at the Nkoman’ombe Primary School, which is located near the Mchuchuma and Katewaka project sites.
Between 2012 and 2021, Tanzania imported nearly USD 10 billion in iron and steel products. Most of it came from China and South Africa in roughly equal amounts. Thus, if implemented, the Liganga-Mchuchuma steel complex is expected to save Tanzania nearly USD 2 billion annually in foreign exchange needed for imports.
At this stage, the Government is leaving all its options open. If Sichuan Hongda is unable to start operations within a reasonable time frame, NDC might need to enlarge its scope of search to find a new partner.