In the same week, Tanzanians could have read two headlines side by side.
“Tanzania finalises Host Government Agreement for USD 40 billion LNG plant in Lindi.”
“Government recommits to Mchuchuma coal and Liganga steel; Mtwara–Njombe rail to proceed.”
Both stories belong to the same geography, the deep south, and both promise transformation. Offshore, international oil companies drill in ultra-deep water, promising to turn 57 trillion cubic feet of gas into liquefied exports bound for Europe and Asia. Onshore, vast seams of coal and beds of iron ore are meant to fire smelters, roll steel, and seed a domestic industrial base.
But they also tell very different stories. One is written in the language of global capital markets, climate diplomacy, and billion-dollar export contracts. The other is told in the idiom of sovereignty, self-reliance, and import substitution. One presents Tanzania as a partner in the global energy transition; the other positions it as a nation determined to industrialise on its own terms, even if it means burning black rock in the climate era.
Can the south carry both narratives without splitting apart? Or must we reconcile LNG and coal into one corridor story, coherent, sequenced, and credible, if the region is to move beyond speeches into reality?
LNG offshore, the global-facing narrative
Few projects in Tanzanian history have generated the scale of anticipation attached to the Lindi LNG plant. Offshore, the reserves are staggering: over 57 trillion cubic feet of recoverable gas, spread across deep-water blocks held by Shell, Equinor, ExxonMobil, and partners. Onshore, the proposed plant at Lindi would be one of the largest industrial investments in Africa, a USD 40 billion complex of liquefaction trains, storage tanks, jetties, and pipelines.
Gas as the “transition fuel.” In the global discourse, natural gas is pitched as the least dirty fossil fuel: cleaner than coal and oil, dispatchable in power systems, and a flexible substitute as countries move towards renewables. LNG projects, unlike coal, still attract investment from major banks, export credit agencies, and sovereign wealth funds, provided environmental standards are observed. For Tanzania, this framing makes LNG politically saleable in international diplomacy, even as climate pressure grows.
Export dollars and prestige. The LNG project is aimed squarely at exports. Gas would be liquefied and shipped to Asia and Europe, earning billions in forex. The sums are vast enough to sway GDP figures, fiscal revenues, and the balance of payments. Politically, it offers prestige: Tanzania on the map of global energy supply, rubbing shoulders with Qatar, Mozambique, and the US Gulf Coast.
Foreign-led, global capital. The project’s DNA is international. Its operators are multinationals; its financing will be global; its markets are overseas. Communities around Lindi will see jobs and infrastructure, but the logic of the plant is to serve distant demand. This global-facing narrative positions Tanzania as a partner in the world’s energy transition, supplying “bridge fuel” for others.
Coal & steel onshore, the sovereignty narrative
Travel inland to Njombe and Songea, and the story changes tone. Here, the promise is not billions from exports, but billions saved from imports.
Iron and coal as twins. Liganga holds East Africa’s largest known iron ore deposit. Mchuchuma contains coal seams mapped for decades. Together they were conceived as a twin project: coal to fuel furnaces and generate power, iron to feed smelters and roll domestic steel. Unlike LNG, which exports energy to others, this pair is about import substitution and self-reliance.
The steel gap. Tanzania spends USD 1.3–1.5 billion annually importing steel products, rods, coils, beams. Every bridge, tower, and railway is underpinned by foreign billets. Liganga’s promise is to reverse this, to make Tanzania not just a buyer but a maker of steel. It is a sovereignty argument: no nation industrialises while importing its skeleton.
Rail and port logic. Mchuchuma and Liganga are also the freight logic for the Southern Corridor railway and Mtwara port. Coal and ore are the heavy, steady tonnage that justify rail economics. Unlike LNG, which flows offshore pipelines into an export terminal, coal and steel would anchor inland logistics, linking hinterland to coast.
Political symbolism. Coal and steel carry a different kind of prestige. They resonate with ideas of ujamaa-era self-reliance, of sovereignty rooted in domestic capacity. They appeal to the politics of jobs in Njombe, Songea, and Mtwara. They speak less to global investors and more to local citizens: we will build with our own resources, not forever import from others.
A narrative in tension. Yet this sovereignty story carries costs. Coal is carbon-intensive; international financiers retreat from it. Steel plants are expensive, slow to deliver, and hard to keep competitive against Asian giants. The sovereignty narrative is domestically powerful, but globally awkward.
The clash, green vs. black, export vs. substitution
The paradox of the south becomes clear when you place the two narratives side by side.
Climate optics. LNG is marketed as a “transition fuel,” coal as a climate villain. International diplomacy applauds gas, scolds coal. Yet in Njombe, the argument is reversed: without coal, no furnaces burn; without furnaces, no steel; without steel, no infrastructure. The same global actors who welcome Tanzania’s gas cringe when it speaks of coal.
Financing sources. LNG attracts global capital. Development finance institutions, export credit agencies, sovereign wealth funds, all can lend to gas. Coal struggles. Western banks have withdrawn; insurers hesitate. Mchuchuma must look east (China, India) or inward (domestic banks) for money, and often at higher cost.
Export vs. substitution. LNG is about earning forex from overseas markets. Coal and steel are about saving forex by replacing imports. LNG brings revenue but leaves Tanzania reliant on foreign demand. Coal and steel keep value at home but expose us to competitiveness risks against cheap Asian steel.
Prestige vs. pragmatism. LNG makes headlines in Davos, Paris, and Houston. Coal and steel resonate in Njombe, Mtwara, and Dar’s construction sites. One boosts Tanzania’s global image; the other addresses its domestic skeleton.
The clash is not only rhetorical; it risks becoming institutional. Ministries, financiers, and even diplomats may push one project at the expense of the other, fragmenting the corridor. Unless reconciled, LNG and coal could end up cannibalising political bandwidth, finance, and credibility.
The corridor opportunity, integration rather than contradiction
Yet the paradox need not be fatal. LNG and coal/steel can be seen not as rivals but as layers of one Southern Corridor strategy.
Shared infrastructure. Both LNG and steel need ports. Upgrades at Mtwara and Lindi can be designed to serve tankers offshore and bulk carriers inland. Both need rail spines, LNG to bring construction materials and inputs, coal and steel to provide steady freight. Both need power; LNG-driven electricity can stabilise the grid that steel relies on.
Complementary roles. LNG is export-oriented, earning forex. Steel is domestic-oriented, saving forex. Together they strengthen both sides of the balance sheet. LNG pays for imports; steel reduces the need for them.
Industrial ecosystem. LNG supports petrochemicals, fertilizer, and power. Steel supports fabrication, machinery, and construction. In an integrated corridor, gas plants and steel mills coexist alongside agro-processing, logistics hubs, and SMEs. Njombe provides coal and iron, Lindi hosts LNG trains, Mtwara moves cashews and maize. The region becomes an ecosystem, not a collection of isolated projects.
Example of synergy. LNG-powered electricity can reduce reliance on coal for base-load, lowering Mchuchuma’s emissions profile. Steel from Liganga can provide materials for LNG infrastructure, jetties, tanks, pipelines. Instead of being in tension, each reinforces the other.
The opportunity is to tell one corridor story: a south that is energy-rich, infrastructure-ready, and industrially diverse.
Governance choices
To seize that opportunity, governance must act with coherence.
Unify corridor strategy. Establish a Southern Corridor Authority mandated to coordinate LNG, coal, steel, ports, and rail. Give it authority to align sequencing, financing, and community benefits. Fragmentation kills; integration multiplies.
Narrative discipline. Stop telling two competing stories. Frame coal as transitional and capped, LNG as global and export-focused, steel as sovereign and domestic. Together they form a balanced portfolio.
Transparency. Publish a corridor masterplan: sequencing of projects, financing structures, complementary infrastructure. Citizens and investors should see how LNG and steel fit together, not be left guessing.
Community dividends. Ensure that jobs, clinics, and schools reach Mtwara, Lindi, Njombe, and Songea. Communities must see tangible benefits, not just promises. Otherwise, both LNG and coal risk social licence.
Diplomatic balance. Speak one language to investors abroad and another to citizens at home, but keep them aligned. Gas can be presented as a global bridge fuel; coal can be justified as a short-term domestic necessity. What matters is coherence, not contradiction.
Counterarguments and answers
“Coal undermines LNG’s green credibility.”
Not if managed carefully. If coal is capped at a defined share, framed as transitional, and paired with investment in renewables, LNG can still be Tanzania’s green-facing project abroad.
“LNG will overshadow coal and steel.”
Not necessarily. LNG is export-focused; coal and steel serve domestic markets. One earns forex; the other saves it. Together they cover both sides of the ledger.
“The corridor is overloaded with projects.”
Integration creates economies of scale. Shared rail, ports, and power make each project more viable. Fragmentation is what overloads.
“Donors won’t support coal.”
True, but LNG-backed financing for shared infrastructure can indirectly support steel. Domestic banks and Asian lenders may also fill coal’s gap. Transparency and diversification are key.
“We should pick one narrative, not both.”
That is a false choice. Tanzania can and must walk on two legs: one in the global LNG market, one in domestic steel sovereignty.
One corridor, one story
Southern Tanzania cannot afford to be a battlefield of narratives. If LNG offshore and coal/steel onshore are treated as rivals, both will stall. If they are woven into one coherent strategy, the south can emerge as Tanzania’s most dynamic growth pole, a region of energy, industry, and trade.
The two headlines must become one story: a Southern Corridor that earns forex through LNG, saves forex through steel, anchors rail and port with bulk cargo, and delivers jobs and services to local communities.
The world may see contradictions, gas in one hand, coal in the other. Tanzania must see integration, a bridge to industrialisation, sequenced with discipline, explained with honesty.
If we fail, the south will remain a patchwork of promises. If we succeed, it will be remembered as the place where Tanzania finally reconciled global and domestic ambitions into one corridor of transformation.
