Critical minerals investment in Tanzania is becoming an increasingly important part of the country’s mining and industrial development strategy. The Government is strengthening its approach to mineral exploration, strategic mineral development, local processing, State participation and investment facilitation.
For international mining companies, investors and project developers, these developments create opportunities. However, they also introduce important regulatory, ownership, tax and operational requirements that must be assessed before committing capital.
Tanzania’s mining investment framework is particularly relevant to companies exploring or developing graphite, nickel, lithium, rare earth elements, cobalt, niobium and other minerals that may support global energy transition, manufacturing and technology supply chains.
This guide examines the principal developments affecting critical minerals investment in Mainland Tanzania in 2026 and explains what prospective investors should consider.
- Tanzania’s Critical and Strategic Minerals Strategy
The Government has been developing a Critical and Strategic Minerals Strategy intended to strengthen the contribution of mineral resources to national economic development.
The strategy places particular emphasis on:
- Developing critical and strategic mineral resources.
- Increasing domestic mineral processing and beneficiation.
- Supporting investment in exploration and mining projects.
- Strengthening geological information and mineral research.
- Increasing the contribution of mining to industrial development.
- Supporting the country’s participation in international mineral supply chains.
The Ministry of Minerals has identified 25 critical minerals and 18 strategic minerals through its technical work. However, the official declaration of the relevant minerals must be distinguished from the preliminary identification process.
Under the Mining Act, the Minister may declare minerals to be critical or strategic through an order published in the Government Gazette, following the required recommendation and Cabinet approval.
Investors should therefore verify the applicable official declaration rather than assume that every mineral mentioned in a strategy document automatically receives a special regulatory classification.
- Tanzania’s Growing Mining Investment Activity
Tanzania continues to promote investment in mineral exploration and development.
According to the Ministry of Minerals’ 2026/27 budget statement, the Mining Commission issued 454 licences for critical and strategic minerals between July 2025 and March 2026.
The reported distribution was:
- Graphite: 271 licences.
- Nickel: 136 licences.
- Rare earth elements: 28 licences.
- Heavy mineral sands: 11 licences.
- Lithium: 6 licences.
- Cobalt: 2 licences.
These figures demonstrate the scale of licensing activity reported by the Ministry. They should not, however, be interpreted as proof that all licensed projects have commenced commercial operations or secured financing.
Tanzania’s international mining profile has also improved. In the Fraser Institute’s 2025 Annual Survey of Mining Companies, Tanzania ranked 34th out of 68 jurisdictions globally and fourth in Africa on the Investment Attractiveness Index.
For investors, the practical opportunity is to identify projects with credible geological potential, a viable licensing position, financing capacity and a realistic development plan.
- Government Participation in Mining Projects: The 16% Free-Carried Interest
One of the most important considerations for investors is the Government’s participation in mining projects.
The Mining Act and the Mining (State Participation) Regulations, 2022, GN No. 574 of 2022, establish the framework for Government participation in qualifying mining interests.
Regulation 7 provides for a Government entitlement of not less than 16% non-dilutable free-carried interest shares in the equity capital of a mining interest.
The free-carried interest means that the Government is not required to make a financial contribution for those shares, including in circumstances involving an increase in share capital.
The Regulations also provide for preferred-share treatment and associated governance and economic rights.
What does the 16% interest mean for an investor?
The standard framework agreement template contemplates a joint venture in which the Government holds at least 16% and the private investor holds the remaining ordinary shares, commonly described as an 84:16 structure.
However, investors should not assume that 84% private ownership is an unconditional commercial guarantee in every project. The Regulations also recognise other forms of Government participation and provide for consideration of matters such as public infrastructure and the level of investment.
The project structure should therefore be assessed against the applicable legislation, the Government’s participation arrangements and the negotiated project documents.
What is a framework agreement?
A framework agreement is the principal document used to record the arrangements between the Government and the mining project parties.
Under the 2022 State Participation Regulations, the Government and the mining company negotiate the framework agreement to govern the joint venture arrangement.
Important matters include:
- Government shareholding and participation.
- The structure of the joint venture company.
- Shareholders’ rights and governance.
- The joint financial model.
- Economic benefits sharing.
- Fiscal assumptions.
- Local processing and beneficiation commitments.
- Project implementation arrangements.
The Regulations apply to companies or persons holding a Mining Licence or Special Mining Licence. They should not be confused with the requirements applicable to every exploration applicant or prospecting licence holder.
The timing of the Government participation process and the project structure should be assessed early, particularly before the investor finalises its financing and corporate arrangements.
- Tax Incentives for Qualifying Mining Framework Agreements
The Finance Act, 2026 (Act No. 2 of 2026), which commenced on 1 July 2026, introduced specific tax provisions relating to qualifying mining framework agreements.
These amendments are relevant to investors negotiating the construction and development phase of mining projects.
The principal areas include:
- Excise Duty Remission
The Finance Act amended the Excise (Management and Tariff) Act by introducing section 146B.
The provision allows the Minister, subject to Cabinet approval and an order published in the Gazette, to remit excise duty on qualifying goods imported or purchased by a holder of a Mining Licence or Special Mining Licence who has entered into a framework agreement with the Government.
The provision concerns goods used during the construction of a mining project in which the Government has an ownership interest.
Petroleum products are excluded, and the Minister must specify the relevant goods, time limit and applicable conditions.
- Income Tax Treatment
The Finance Act amended section 10 of the Income Tax Act to recognise qualifying framework agreements between the Government and holders of Mining Licences or Special Mining Licences.
The relevant exemption is subject to Cabinet approval and applies during the construction phase of the mining project. It ceases immediately upon commencement of production.
This is not a general exemption from all income tax obligations throughout the life of a mining operation.
- Value Added Tax
The Finance Act also amended section 6 of the Value Added Tax Act.
The amendment provides for qualifying VAT exemptions on goods and services imported or supplied for the implementation of mining activities in which the Government has an ownership interest.
The framework agreement must provide for the relevant VAT exemption, and the qualifying goods or services must be used exclusively for construction of the mining project.
The exemption ceases immediately when production begins and is subject to the applicable statutory conditions and Cabinet approval requirements.
- Compliance and Penalties
The Tax Administration Act was also amended to introduce section 94A, addressing abuse of exemptions or remissions granted under framework agreements.
Misusing exempted goods, transferring them without the Commissioner’s approval or obtaining an exemption through false or misleading statements can result in criminal liability, a fine equal to the amount of tax exempted and recovery of the tax.
Investor consideration: Tax incentives should be negotiated, documented and approved before the project relies on them financially. An investor should not treat a proposed incentive in a draft framework agreement as an automatically available tax exemption.
- Government Investment in Geological Research and Mineral Data
Access to reliable geological information is important when evaluating the commercial viability of a mining project.
The Government has continued to invest in geological mapping and geoscientific research through the Geological Survey of Tanzania.
Reported geological coverage includes:
- Geological mapping: approximately 97%.
- Low-resolution airborne geophysical surveys: approximately 100%.
- High-resolution airborne geophysical surveys: approximately 16%.
The Government has announced plans to increase high-resolution airborne survey coverage to approximately 34% during the 2026/27 financial year, with a longer-term objective of reaching at least 50% by 2030.
The Mineral Survey Fund
The Finance Act, 2026 amended the Mining Act by establishing the Mineral Survey Fund under section 149A.
The Fund is intended to finance geoscientific surveys. Its statutory revenue source includes 10% of revenues collected from royalties, fees and other charges prescribed under the Mining Act.
The Fund is administered by the Commissioner for Minerals, and expenditure is subject to the approval requirements set out in the legislation.
For investors, improved geological data can support exploration planning, reduce uncertainty and help identify areas requiring further technical investigation.
Nevertheless, regional geological data should not replace independent technical due diligence, sampling, drilling, resource estimation and feasibility studies.
- Mineral Processing and Local Value Addition
Tanzania’s mining framework places considerable emphasis on domestic mineral processing and beneficiation.
The Mining Act contains restrictions on the export of raw minerals and mineral concentrates and provides for mineral beneficiation and processing within the United Republic.
Investors should therefore assess the processing requirements applicable to their particular mineral, product and project before developing an export strategy.
This may involve:
- Establishing a processing or beneficiation facility.
- Obtaining the relevant mineral processing, smelting or refining licences.
- Evaluating access to reliable electricity and water.
- Assessing transport and logistics infrastructure.
- Planning for local content requirements.
- Including processing commitments in the relevant project agreements.
The Buzwagi Special Economic Zone and other approved industrial locations may be relevant to projects considering mineral processing and related industrial activities.
However, investors should independently verify the availability of the relevant facilities, licences, land, infrastructure and investment incentives before selecting a project location.
- Cancellation of Inactive Exploration Licences
The Government has also taken enforcement measures against licence holders who fail to develop their mineral areas or comply with licence conditions.
On 15 April 2026, the Minister for Minerals announced the cancellation of 40 exploration licences covering approximately 900 square kilometres.
A further 43 licence holders received notices requiring them to rectify identified defaults within 30 days.
The announced enforcement action addressed issues including:
- Failure to develop licensed areas.
- Non-payment of applicable fees.
- Failure to meet local content obligations.
- Failure to implement corporate social responsibility commitments.
This development is important for prospective investors interested in acquiring or applying for mineral rights.
However, an announcement that a licence has been cancelled does not by itself establish that a particular area is immediately available for a new application.
Investors should conduct a current Mining Commission cadastre search and obtain confirmation of the legal status and availability of the target area.
- International Arbitration and Investor Risk
A significant legal development occurred through the Written Laws (Miscellaneous Amendments) (No. 2) Act, 2026 (Act No. 7 of 2026), which commenced on 2 October 2026.
The Act amended section 11 of the Natural Wealth and Resources (Permanent Sovereignty) Act by inserting subsection (4).
The new provision addresses agreements containing special arrangements relating to proceedings, the seat of arbitration or jurisdiction in disputes arising from the extraction, exploitation or acquisition and use of natural wealth and resources.
Where the relevant agreement has received Cabinet approval, the application of section 11 should not prejudice the implementation of that agreement.
What does this mean for mining investors?
The amendment provides a statutory route for qualifying agreements to contain specially agreed dispute-resolution arrangements, including arrangements concerning the seat of arbitration.
However, it does not mean that every mining investor automatically has a right to foreign-seated arbitration.
Investors should carefully review:
- The wording of the proposed dispute-resolution clause.
- The type of agreement being negotiated.
- The scope of the relevant natural-resource activities.
- The required Cabinet approval.
- The agreed arbitration rules and seat.
- Recognition and enforcement considerations.
The dispute-resolution framework should be considered during the negotiation of the project agreement rather than left until a dispute arises.
- Key Regulatory Considerations Before Investing in Tanzania’s Mining Sector
Although the Government is promoting critical minerals investment, investors must plan for the regulatory obligations applicable to their particular project.
Before committing capital, a prospective investor should consider the following:
- Mineral rights and licensing
Identify the appropriate mineral right, confirm the availability of the target area and verify the relevant licence conditions.
- Corporate structure
Determine the appropriate Tanzanian corporate vehicle, ownership structure, shareholders and local operational arrangements.
- Government participation
Assess whether the project is subject to the Mining (State Participation) Regulations and plan for the relevant framework agreement and Government participation arrangements.
- Tax and investment incentives
Identify available incentives and establish whether they require a framework agreement, Cabinet approval, a Gazette order or other regulatory procedures.
- Local content and employment
Plan for Tanzanian participation, employment, procurement, training and other applicable local content obligations.
- Environmental and social compliance
Assess environmental approvals, land access, compensation, relocation, and resettlement and community obligations.
- Processing and export arrangements
Determine the applicable processing, beneficiation, mineral trading and export requirements for the specific mineral and product.
- Project financing and dispute resolution
Ensure that the financial model, project agreements, Government participation arrangements and dispute-resolution provisions are aligned with the applicable legal framework.
- How GERPAT Solutions Supports Mining and Investment Projects in Tanzania
GERPAT Solutions provides business advisory, investment facilitation and regulatory compliance support to local and international businesses seeking to establish or expand operations in Tanzania and Zanzibar.
For mining and critical minerals investors, our support can include:
- Company formation and corporate structuring coordination.
- Mining investment regulatory information and compliance support.
- Business registration and licensing coordination.
- Tax registration and corporate compliance support.
- Investment facilitation and regulatory coordination.
- Work and residence permit coordination for eligible foreign personnel.
- Intellectual property registration and brand protection.
- Local compliance planning and coordination with relevant authorities.
- Coordination with appropriately qualified advocates and technical specialists where specialist legal or technical services are required.
Our objective is to help investors understand the regulatory environment, identify compliance requirements and organise the practical steps necessary to establish and operate a business in Tanzania.
Conclusion
Critical minerals investment in Tanzania presents opportunities for investors interested in exploration, mining, mineral processing and industrial development.
The 2026 legislative developments are particularly important because they address Government participation, construction-phase tax incentives, and geological research funding and dispute-resolution arrangements for qualifying natural-resource agreements.
However, these measures should not be interpreted as automatic incentives or guarantees of project approval.
Investors should undertake proper licensing, corporate, technical, financial, environmental and regulatory due diligence before committing capital.
Understanding the legal framework at the beginning of a project can help investors structure their operations, manage regulatory risks and plan for sustainable long-term investment in Tanzania.
GERPAT Solutions — Intellectual Property, Business Formation, Licensing and Corporate Compliance in Tanzania and Zanzibar.
Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, investment or professional advice. It covers Mainland Tanzania and reflects information available as at 14 November 2026. Laws and regulatory requirements may change. Investors should verify applicable requirements and seek advice from qualified professionals before making decisions. GERPAT Solutions provides business advisory, investment facilitation and regulatory compliance support and is not a law firm.