Tanzania Faces Critical Minerals Risks From Global Demand

Tanzania’s ambition to develop its critical-minerals sector and attract international investment presents an opportunity to strengthen industrialisation, but experiences from countries such as Indonesia and the Democratic Republic of Congo (DRC) show the risks that can emerge when mineral production expands faster than domestic processing capacity, environmental safeguards and regulatory systems.

Tanzania has significant deposits of minerals considered important to global supply chains, including graphite, nickel, cobalt, lithium and rare earth elements. The country was the world’s fifth-largest producer of natural graphite in 2024, while mining and quarrying contributed about 10% of GDP.

The United States has also identified Tanzania as a potential strategic supplier of critical minerals, while international initiatives such as the Minerals Security Partnership are seeking to strengthen supply chains covering minerals including graphite, cobalt and nickel. The partnership says its projects should promote local value addition and high environmental, social and governance standards.

Indonesia provides an important case for Tanzania to study.

Jakarta banned exports of unprocessed nickel ore in an effort to force greater domestic processing and attract investment in smelters and downstream industries. The policy helped Indonesia become the world’s dominant nickel producer and attracted substantial foreign investment into processing.

However, the rapid expansion also came with significant environmental and economic challenges. An Associated Press investigation reported extensive deforestation and high greenhouse-gas emissions associated with coal-powered nickel processing, while Indonesia has also faced concerns over the concentration of foreign investment and the difficulties of developing a complete domestic electric-vehicle value chain.

For Tanzania, the lesson is that local processing alone does not automatically guarantee broad industrial development. The country would need to ensure that processing facilities create domestic jobs, technology transfer, local businesses and wider manufacturing opportunities.

The Democratic Republic of Congo, one of the world’s largest sources of cobalt, has also been attempting to capture more value from its mineral resources.

In 2026, the DRC introduced a ban on exports of copper and cobalt concentrates as part of efforts to encourage domestic processing and increase the economic value retained within the country. However, the policy has included exemptions because domestic processing capacity remains an important constraint.

Research published in Nature Communications in July 2026 also highlighted environmental and regulatory concerns surrounding the DRC’s cobalt supply chain. Researchers estimated that substantial quantities of naturally occurring uranium may have been carried alongside cobalt exports, while additional material may have accumulated in mining and processing waste. The study described potential environmental, worker-safety and regulatory implications.

These examples demonstrate that having valuable minerals is only one part of building a successful mineral industry. Processing capacity, reliable electricity, environmental monitoring, skilled workers, transparent contracts and effective enforcement are equally important.

What Tanzania can do

As international demand for Tanzania’s critical minerals grows, several safeguards could help reduce similar risks:

Prioritise domestic value addition by encouraging processing and refining before minerals are exported where economically and technically feasible.

Require clear local-content commitments, including Tanzanian employment, suppliers, skills development and technology transfer.

Strengthen environmental monitoring around mines, processing plants and waste-storage facilities.

Conduct independent assessments of major mining projects before approving large-scale operations.

Make mineral contracts and beneficial ownership information more transparent, consistent with Tanzania’s existing commitments to accountable resource governance.

Ensure reliable power and infrastructure so that domestic processing is commercially viable rather than simply mandated on paper.

Avoid excessive dependence on one foreign market or investor, by developing a diversified group of trading and investment partners.

Establish clear rules for strategic minerals, including conditions governing exports, processing, stockpiling and emergency supply situations.

Build Tanzanian technical expertise in mineral processing, geology, environmental management and battery-related manufacturing.

Track the entire mineral value chain, from extraction to processing and export, so that the government can determine how much economic value is actually retained inside Tanzania.

Tanzania’s own mining framework already includes provisions relating to local content, government participation and value addition, while the government has identified downstream processing and industrialisation as priorities.

The growing global competition for graphite, nickel, cobalt and other critical minerals therefore presents Tanzania with both an opportunity and a policy challenge: how to attract the investment needed to develop its mineral resources while ensuring that the country’s resources contribute to long-term industrialisation rather than primarily serving external supply chains.

The experiences of Indonesia and the DRC do not provide identical circumstances to Tanzania, but they offer concrete examples of environmental, processing, regulatory and value-addition challenges that Tanzanian policymakers and citizens can examine as the country’s critical-minerals sector expands.