TANZANIA will soon start niobium production, one among rare minerals used in electron industries, substantially needed in manufacturing aircraft and rocket engines.

Dr Steven Kiruswa, the Minerals deputy minister, made this affirmation in the National Assembly yesterday, responding to a question by Oran Njeza (Mbeya Rural) who raised an issue over the time frame when Niobium mining and Ferroniobium production would begin in Mbeya District.

Niobium is also used in building drilling equipment for oil and gas, plus an assortment of motor vehicles, all of which will be in view as the niobium mining project at Panda Hill, run by Panda Hill (T) Ltd (PHTL) begins work, he said.

It is expected to produce niobium-based products, including Ferroniobium as it is derived from niobium processing, he said, noting that the government has already started discussions with Panda Hill to sign a share distribution pact.

The government will acquire shares in the project, alongside other economic benefits, he said, highlighting that in line with the Mining Act (Chapter 123 of the laws), holders of medium and large-scale mining licenses are required to provide the government with non-dilutable shares of not less than 16 per cent.

Compensation payments for those affected by the project are being made, and once completed, building the niobium processing plant will start.

In a follow-up question, the MP affirmed that the investor is ready to meet all the requirements, including investing $250m, demanding how quickly the government will enable the firm to receive their export processing zone (EPZ) license to start building the plant.

There is an area where residents need to be compensated, he said, demanding the time frame for signing the contract with the investor so as to start work, to which the deputy minister acknowledged.

Niobium production is vital in boosting the economy, he said, noting ongoing discussions to finalize the agreement, where a meeting in Arusha is slated for today (Friday) to finalize elements of the contract structure.

The presumptive contract includes three key aspects, namely the government's participation in niobium production, participation in the processing plant, and the establishment of a subsidiary company as legally required.

“So, once these discussions are finalized and the agreement is signed, they will proceed with relocating the prison, compensating residents and establishing the EPZ area,” he added.