Every year, Tanzania spends more than $1 billion importing steel beams, rods, plates, and coils that form the skeleton of its bridges, high-rises, ports, and railways. In every tonne of imported steel lies not only the foreign currency spent, but also opportunities missed: jobs not created at home, skills not developed, and value not captured.
And yet, beneath the soil of Ludewa in Njombe lies Liganga, East Africa’s largest known iron ore deposit. For decades, politicians, planners, and citizens have pointed to it as the answer to this paradox: why should a country so rich in ore spend so heavily on imports? The dream is bold and compelling, a domestic steel industry that can forge the rails of the Standard Gauge Railway, the beams of Dar’s skyline, the bridges across Rufiji and Kilombero, the pipelines and ports of tomorrow.
But geology alone does not build steel. Liganga has sat in speeches and plans since the 1970s, and Tanzania still imports. The challenge is not the ore itself; it is whether we can assemble the conditions, rail, power, financing, and governance that can turn rock into rolled steel at competitive prices. The real test is whether Liganga can stop being a dream and start being the forge of our industrial future.
The promise of Liganga
The geological surveys are clear: Liganga hosts vast reserves of iron ore, sufficient to support production for decades to come. On paper, it positions Tanzania not only to meet domestic demand but to export across East Africa.
Steel is a strategic metal. No industrial power in history was built without steel. It is the hidden skeleton of modern economies, in every rail, port, airport, power line, and factory floor. For Tanzania, steel is not just a commodity; it is the bedrock of Vision 2050. It enables the physical infrastructure upon which agriculture, services, and technology depend.
Economic logic of import substitution. Today, the construction sector in our country consumes imported rods and coils from China, India, and Turkey. Annual import bills of USD 1.3–1.5 billion drain foreign exchange reserves. A domestic steel plant, supplied by Liganga, could keep much of that value at home. Beyond saving foreign exchange, it could create jobs, catalyze SMEs in fabrication and transportation, and reduce vulnerability to global price shocks.
Symbolic importance. Steel carries weight beyond economics. It signals industrial maturity. To produce one’s own steel is to announce entry into the club of nations that shape, rather than merely consume, industrial goods. For Tanzanians who still recall slogans of self-reliance, Liganga represents more than metallurgy; it is sovereignty forged in furnaces.
Yet promise is only the first page. To turn ore into industry requires enabling infrastructure, rails that can carry heavy tonnages, and megawatts that can keep smelters hot.
The infrastructure enablers, rail and power
Iron ore is heavy, and steelmaking is energy-hungry. Without railway bulk capacity and reliable power, Liganga is a non-starter.
Rail as the conveyor of competitiveness. The proposed Mtwara–Liganga railway is not a vanity project; it is an industrial artery. Ore cannot be economically moved by road. A railway is the only way to achieve the economies of scale that make smelting viable. Moreover, a rail line built for ore can also carry coal from Mchuchuma, agricultural produce from Njombe, and imports from Mtwara port. In this sense, Liganga does not only justify rail — it underwrites a southern development corridor. A railway built only to move passengers is a drain; a railway built to move iron and coal is an engine.
Power is the lifeblood of smelting. Steelmaking consumes enormous energy. Blast furnaces, arc furnaces, and rolling mills all require firm, cheap megawatts. Without stable electricity, smelters stall, costs balloon, and competitiveness vanishes. Mchuchuma’s coal has long been proposed as the twin to Liganga’s iron, supplying both fuel for smelting and base-load for the southern grid. However, reliance on coal must be balanced with diversification, including hydropower, gas, and eventually renewables, to ensure sustainability and align with the global shift toward low-carbon steel.
Integration of the package. Liganga has always been imagined in tandem: iron ore, coal, railway, and port. Break one link in this chain, and the rest falters. This is why speeches about Liganga often sound like speeches about infrastructure, because in truth, they are inseparable. Ore in the ground means nothing without rails and power above it.
The challenge for Tanzania is to synchronise these enablers. If the railway is late, the ore sits idle. If power is unreliable, furnaces fail. If both slip, Liganga remains a dream, while imports continue to flow.
Financing and execution gaps
The ore at Liganga is not the problem. The problem is turning ore into a functioning industrial ecosystem, and here, Tanzania has stumbled for decades.
Decades of announcements. Liganga has been in speeches since the 1970s. Each administration has described it as the missing link in Tanzania’s industrialisation. Memoranda have been signed, feasibility studies have been commissioned, and joint ventures have been announced. Yet half a century later, steel imports continue to rise, and Liganga remains dormant.
Investor hesitation. Why the stall? Partly, it is the scale of capital required, which amounts to billions of dollars for mining, smelting, rail, and power combined. Few investors are willing to shoulder this risk without sovereign guarantees or concessional finance. Others are wary of market competitiveness: can Tanzania produce steel at prices that compete with imports from Asia, where economies of scale and subsidies are entrenched?
Coordination gaps. The other culprit is governance. Liganga is not a single project; it is a chain. Rail, coal, power, and steel must be synchronised. When one leg falters, the whole system stalls. Too often, ministries and agencies have moved at different speeds, leaving the project stranded between rhetoric and reality.
Lessons from elsewhere. TAZARA showed that bold infrastructure can be built, but it also showed the cost of poor integration with economic fundamentals. The Standard Gauge Railway debates echo the same issue: infrastructure must be tied to freight and industries. Kabanga Nickel discussions remind us that geology is particular, but execution is fragile. Liganga belongs in this family of unfinished symphonies.
Execution is not a technical mystery; it is a political discipline. Without clarity on financing and inter-ministerial coordination, Liganga will remain a file in a cabinet while imports continue to drain the treasury.
Regional and global market pressures
Even if Liganga is built, it will not operate in a vacuum. Steel is one of the world’s most traded commodities.
Competition from imports. China, India, and Turkey flood the markets with steel at prices that are hard to match. Their plants benefit from decades of scale, subsidised energy, and established logistics. For Tanzania, the question is not whether we can produce steel, but whether we can create it competitively. If domestic prices are higher, importers will undercut us.
Regional demand. The East African Community and SADC are experiencing a surge in infrastructure spending. Roads, rails, ports, and housing demand millions of tonnes of steel annually. If Tanzania can position Liganga as the region’s supplier, the market exists. However, to capture the market, product quality, reliability, and logistics must match or exceed those of imports.
Global green transition. The steel industry is under scrutiny for its climate impact. Europe is introducing carbon tariffs; investors are shifting to “green steel.” If Liganga anchors itself on coal-only smelting, it risks being locked into a model that the world is penalising. But if Tanzania can blend hydropower, natural gas, and eventually hydrogen, it could position itself as a low-carbon steel producer — a premium niche in future markets.
The market is both an opportunity and a trap. If Liganga is designed only for yesterday’s steel economy, it may be obsolete by the time it starts. If intended for tomorrow, it could leapfrog.
Governance and policy choices
Ultimately, Liganga’s fate will be written not in ore grades but in governance.
Industrial policy alignment. Liganga must be integrated into Vision 2050, rather than being treated as a stand-alone project. Its success depends on integration with construction, transport, and manufacturing policy. A steel plant cannot survive if it is not connected to national planning.
Local content and SMEs. Procurement and supply chains must deliberately include Tanzanian firms. Fabricators, transporters, maintenance companies, and IT providers should be trained and supported through contracts and ongoing training. Steel should be the product, but industrial capacity should be the legacy.
Revenue management. Royalties and taxes must be collected and reinvested in industrial diversification, rather than being swallowed up by recurrent spending. Without fiscal discipline, Liganga risks becoming another resource cycle of booms and busts.
Transparency and credibility. Publish realistic timelines. Share feasibility summaries. Clarify financing structures. Secrecy invites rumour; openness attracts trust. In an era where investors, financiers, and citizens demand accountability, transparency is often more cost-effective than opacity.
Liganga does not lack promise. It lacks credible governance. That is the difference between a geological deposit and the Industrial Revolution.
Counterarguments and answers
“Imported steel is cheaper; why bother?”
Yes, imports may be cheaper today, but dependence is costly tomorrow. Prices fluctuate, forex drains, and supply can be disrupted. Domestic steel provides sovereignty, stabilises supply, and seeds skills.
“The project has dragged on for decades; it will never happen.”
Delay is not destiny. Many nations took decades to build their steel bases. With the right partnerships and governance, Liganga can still pivot. The alternative is to surrender to perpetual imports.
“Coal dependency makes it obsolete in a green world.”
If designed inflexibly, yes. However, if the plant is future-proofed by blending hydropower, natural gas, and eventually hydrogen, it can evolve into green steel. Tanzania has an opportunity to design a plant for tomorrow, not yesterday.
“Tanzania should focus on agriculture, not heavy industry.”
Agriculture and industry are allies, not rivals. Steel strengthens agriculture by providing irrigation pipes, storage facilities, and transport networks. Without industry, agriculture remains trapped in low productivity.
Steel dreams or grounded future?
Liganga is more than a mine. It is a mirror of our industrial ambition. Do we remain a nation that imports a billion dollars of steel each year while sitting on ore, or do we forge our own future?
The choice is not geological; the ore will wait. The choice is political, financial, and institutional. To move from dream to reality requires rail, power, financing, and above all, governance. Without them, Liganga will remain a slogan, and imports will continue to drain our coffers.
However, if Tanzania can align its infrastructure, markets, and policies, Liganga can be remembered as the furnace that forged our industrial age. Steel is not just metal; it is nationhood in beams and rails. Ore is geology; steel is governance.
The paradox is ours to resolve: will Liganga remain a dream in speeches, or will it finally become the forge of a grounded future?
