3.4 Status of Iron and Steel Sub-Sector in Tanzania

Recent political and economic changes in Tanzania, which have resulted, into trade liberalisation and the lifting of price controls have made a significant impact on the country’s iron and steel industry. For the last five years total supply of iron and steel products (from 1991 to 1995) was an average of 669,000 tones per annum. The highest level of supply was 762,497 tones in 1992 while in 1995 only 535,118 tones were supplied. Because of low industrial development in the iron and steel industry most of these products are imported. Local production currently stands at less than 100,000 tones per annum of bars and rods from re-rollers. A demand of 680,000 tones has been estimated for 1998.

The population of Tanzania is around 35 million and with the growth of population, the demand in the construction industry would grow substantially. Assuming a moderate growth rate of 5%, the demand for construction materials only by 2010 will reach a minimum of 1.22 million tones per annum. In this respect there is tremendous potential for the development of iron and steel industry.

Considering the present quantum of consumption of steel products in Tanzania, and the likely future growth in demand, establishment of an economically viable iron and steel plant to meet a portion of local requirements and export market merits serious considerations. This steel plant will form the nucleus for further development of the iron and steel industry in the country. As a matter of fact in a developing economy like that of Tanzania, the Iron and Steel Sub-Sector forms the core for the industrial growth. Besides meeting part of the domestic needs, development of this industry will also boost and initiate the growth of several ancillary iron and steel consuming industries in the country.

3.5 Approach on the Establishment of a Metallurgical Complex

Titanium in iron ores is usually in chemical combination with iron (as FeTiO₃) and, therefore, cannot be easily separated by mechanical means. During reduction of the iron ore, the titanium dioxide( TiO₂ ), which can not be separated through beneficiation process, is reduced to titanium carbide and carbonitride. The presence of these compounds renders the iron viscous and can cause operational difficulties.

The Liganga iron ore are however rich in both vanadium and titanium and require economical processing in order separate these useful elements from the parent rock. The seams containing significant quantities of vanadium can be exploited as the source of vanadium and iron similar the successful route used (since 1957) by Highveld Steel and Vanadium Corporation of South Africa.

Smelting reduction of titanium-bearing iron ore in blast furnaces has been practiced extensively in recent times in China and Russia. The iron sands of New Zealand are being processed through the normal direct reduction route using the rotary kiln process for reduction. Thus, the technology for reduction of titanium-bearing ores has been commercialized, though it has not been widely applied due to limited resources of such ores and not as result of economics.

The prospect of utilizing the titanium and vanadium-bearing iron ore deposits at Liganga for the proposed, vanadium, titanium and iron ore project, therefore, will depend on several factors, primarily: -

An assessment of the above factors will have to be carried out in order to establish the suitability of the Liganga ore deposits for separating vanadium and titanium concentrates from the main ore and using the residual iron ore in the establishment of an iron and steel complex.

3.5.2 Future of the Iron and Steel Industry in Tanzania

The Government of Tanzania through the National Development Corporation

(NDC) is now contemplating the future of the Iron and Steel Industry in the country. NDC which is responsible for investigations and development of Liganga iron ore deposits, has plans to undertake the implementation of this complex metallurgical project in phases as detailed below: -

First Phase

During this initial phase, it is proposed to produce titanium and vanadium concentrates for export market. Accordingly, about 2.5 Million tones of Liganga titaniferous ore is targeted for mining to produce the following products: -

1. 250,000 tones per year of titanium( TiO₂ ) concentrates
2. 11,000 tones per year of vanadium( V₂O₅ ) concentrates

The metallurgical and infrastructural facilities required for the production of vanadium and titanium concentrates shall consist of Liganga Iron Ore Mine; a Beneficiation Plant; a Pelletisation Plant; a Vanadium Leaching Plant; a Vanadium and Titanium Concentration Plant; Water and Electricity Supply; and Auxiliary Facilities including Township.

Second Phase

The second phase of the development of Liganga Titaniferous ore deposits entail production of about 1.1 million tones per year of iron and steel products including special steels with an option of expansion.

The said volume to be produced at the rate of say 3300 tones daily, would need reliable means to transport all the required raw material to the complex and finished products to consumers through Dar Es Salaam, Mtwara harbour and other major towns both for local and export markets.

First Scenario:

Transportation of about 840,000 tones per annum of washed coal from Mchuchuma to Liganga (some 80 km) and thereafter process vanadium and titanium concentrates (261,000 tones per year) for export plus iron and steel products (1.1 million tones per year) for local, regional and international market to be moved through Mlimba station to Dar Es Salaam and through Songea to the harbour of Mtwara.

Second Scenario:

Moving 840,000 tones per year of washed coal from Mchuchuma to Mtwara (830 Km); transporting about 2.5 tones per year of titaniferous ore from Liganga to Mtwara (app. 900km); processing vanadium and titanium concentrates (261,000 tones per annum) in Mtwara for export market; and manufacturing iron and steel products (1.1 million tones per annum) in Mtwara for local, regional and international market through the harbour of Mtwara.

In order to implement this project, the Government would like to consider the establishment of Iron and Steel Complex using the following alternative strategies: -

1. A fully integrated iron and steel mini-mill (complex) consisting of iron making, steel making, steel casting for slabs, slab rolling, sheet metal rolling (flat products including HRC) and auxiliary facilities

OR

2. An integrated iron and steel mini-plant consisting of iron making , steel making, steel casting for long products (non-flat i.e. profiles, sections, bars, rods, wire, etc ), rolling and auxiliary facilities

OR

3. A semi-integrated steel plant comprising of steel making and rolling facilities as the major production units (continuous caster could be using a mix of scrap and direct reduced iron (DRI) to produce billets) as well as the requisite auxiliaries.

The Liganga titaniferous iron ore, the Mchuchuma - Mhukuru coal, limestone at Meshe-Msolwa and gas from Mtwara are considered the basic raw materials for this complex.

The most important facilities from which selection for appropriate process route would be based (during the second phase) consist of the following: -

The shortage of high quality iron ore deposits worldwide and influence of contaminants have stimulated development of new technologies which use large volumes of materials which are less sensitive to the quality of the raw materials. As an integral part of development in this industry, a long term plan shall be the establishment of a strategy so that readily available local raw material such as fluxes and coal are under constant review in line with development of new technologies in the world.

The processes such as COREX, MIDREX and others have been commercialised and have proved to be technically and economically very attractive and cost effective. The availability of commercially acceptable titaniferous processing technologies and market for vanadium, titanium, iron and steel products provide opportunities for the establishment of this metallurgical complex in Tanzania. The best techniques with highest level of refinements to suit the abundant titaniferous ores deposits of Liganga and market shall be selected.

It is envisaged that appropriate location of the metallurgical complex will stimulate the national economic growth in Tanzania. In the light of this the selection of plant site shall be determined after thorough analysis of a number of variables including size, concentration and quality of lump ore; quality and supply (availability) of additional raw materials; transportation cost for inputs and finished products; target for local, regional and international market; availability and cost of expertise and labour; availability and cost of utilities; etc.

4.0 DETAILED PRE-FEASIBILITY STUDY

The National Development Corporation (NDC) is organising a detailed Pre-feasibility study for Liganga iron ore, titanium and vanadium mine project to ascertain the mineable quantities and qualities of Liganga deposit and Iron and Steel Complex. The conclusions and recommendations of this study are expected to assist the Government, through NDC, to promote this important resource for private investment.

The proposed pre-feasibility study will cover the following main activities:

1. Undertake supplementary exploration progammes that will give a precise estimate of the mineable ore reserves in the area;
2. Estimate and classify the Liganga deposit reserves, indicating chemical and physical properties of the ore;
3. Review alternative locations and determine appropriate plant location to offer competitive advantages;
4. Review all processes with respect to the recovery of iron ore and concentrates of titanium and vanadium from the parent rock as co-products;
5. Conduct a preliminary market study for iron, steel, titanium and vanadium on prices and consumption in the past and projection for the future;
6. Conduct a preliminary techno-economic and financial analysis of the project;
7. Conduct a preliminary Environment Impact Assessment (EIA) of the areas to be affected by the project;
8. Recommend to the Government of Tanzania / (NDC) detailed studies that need to follow and how to make the best use of this local resource to attract private investors.

National Development Corporation has prepared a proposal for funding of the Liganga Vanadium, Titanium and Iron Ore Mine Pre-feasibility study. The study is expected to start as soon as funding is firmed up.

National Development Corporation (NDC) would wish to proceed further with the first phase of Liganga iron ore, titanium and vanadium project as soon as the planned study is over. NDC has in mind joint venture approach with partners in private sector towards financing the implementation of the first phase of the project for the exploitation of Liganga iron ore for the production of titanium and vanadium concentrates. The second phase of the project for the establishment of either an integrated steel plant or a semi- integrated plant will also be implemented in a private sector.