Total Project Cost
Investment Required
Stakeholders
Countries
Project Overview
Description
Development of a standard gauge railway line connecting the Port of Mtwara and the mineral-rich areas of Liganga (iron ore) and Mchuchuma (coal) in southern Tanzania, supporting resource extraction and industrial development.
Objectives
Develop railway infrastructure to facilitate extraction and transport of strategic mineral resources (iron ore and coal); provide efficient transport linkage between resource-rich areas and the Port of Mtwara for export; support industrial development in southern Tanzania through improved logistics infrastructure; reduce transportation costs for bulk commodities; create employment opportunities in construction, operations, and related industries; enhance economic development in previously underserved regions; and improve Tanzania's mineral export capabilities.
Strategic Importance
This railway project represents a strategic resource corridor designed to unlock Tanzania's significant iron ore and coal deposits in the southern region. By connecting these resources to the Port of Mtwara, the project creates an efficient export route while supporting industrial development including potential steel production and power generation. The railway forms a key component of Tanzania's industrialization strategy and southern development corridor, promoting balanced regional development away from traditional economic centers. Furthermore, the project contributes to Tanzania's export diversification objectives, reducing dependence on agricultural commodities by facilitating mineral exports with higher value addition potential.
Technical Specifications
Technology & Design
The railway will employ standard gauge (1,435mm) technology with design appropriate for heavy mineral transport, including considerations for axle load, gradient, and curvature. Initial diesel traction with provision for electrification as power generation capacity develops at Mchuchuma.
Capacity & Size
Approximately 700 km of standard gauge railway connecting Mtwara Port, Mbamba Bay, Liganga, and Mchuchuma; design capacity for 10 million tons of freight annually with initial operations at 5 million tons; mineral loading facilities at mining sites; intermodal facilities at key locations
Technical Details
Standard gauge railway (1,435mm) with axle load capacity of 30 tons to accommodate heavy mineral trains; Maximum gradient of 1.2% on main routes; Maximum speed of 80 km/h for freight operations; Heavy-duty track structure suitable for mineral transport; Modern signaling and communications systems; Specialized mineral loading facilities at mining sites; Port interface facilities at Mtwara
Development, Implementation & Financial Details
Development Timeline
Pre-feasibility studies (2025-2026); Detailed feasibility and design studies (2026-2028); Financing arrangements and mining integration (2028-2030); Implementation (2030-2034)
Latest Implementation Updates
UPDATED2025-05-09 — Parliament informed that feasibility and preliminary design for 1,000 km Mtwara–Mbamba Bay SGR (incl. Liganga/Mchuchuma spur) are complete; next phase moves to procurement/financing structuring. Link: https://www.thecitizen.co.tz/tanzania/news/national/tanzania-completes-initial-designs-for-1-000-kilometre-mtwara-mbamba-bay-railway-line-5032518
Financing Structure
The project is expected to utilize a resource-backed financing approach with: potential public-private partnership structure linking railway development to mineral extraction rights; sovereign financing through development finance institutions; bilateral financing linked to mining investment; and possible mineral off-taker investment in transport infrastructure. This financing model aligns transport infrastructure development with resource extraction investments.
Capital Structure
Resource-backed development model with public infrastructure component (40%) and private investment in integrated mining-rail operations (60%). The exact structure will depend on the appetite of mining investors and market conditions for iron ore and coal.
Project Timeline
Start Date
January 2025
Expected Completion
December 2034
Development Timeline
Pre-feasibility studies (2025-2026); Detailed feasibility and design studies (2026-2028); Financing arrangements and mining integration (2028-2030); Implementation (2030-2034)
Project Status History
Status 2022
Pre-Feasibility
Status 2024
Pre-Feasibility
Additional Project Details
Preparation Funding Gap
USD 18.00M
Construction Timeline
Phase 1 (Mtwara-Mbamba Bay section): 2030-2032; Phase 2 (Connections to Liganga and Mchuchuma): 2031-2034
Legal & Financial Advisors
CPCS Transcom providing initial technical advisory services; legal and financial advisory services pending appointment
Market Analysis
Market Analysis
The railway will primarily serve the Liganga iron ore deposits (estimated reserves of 1.2 billion tons) and Mchuchuma coal deposits (estimated reserves of 428 million tons). Current transportation constraints make extraction economically unviable, but with railway access, production potential is estimated at 3-5 million tons of iron ore and 2-3 million tons of coal annually.
Market Demand
Initial design capacity of 5 million tons of freight annually, with potential expansion to 10 million tons based on mineral production growth. Limited passenger services will serve communities along the route with estimated demand of 250,000 passengers annually.
Key Stakeholders
Project Sponsor
Tanzania Railways Corporation, Tanzania Ministry of Minerals
Key Parties
Tanzania Railways Corporation, Tanzania Ministry of Minerals, Tanzania Ports Authority, National Development Corporation of Tanzania
Investors
African Development Bank, China Exim Bank, Development Bank of Southern Africa, private mining investors
Contractors & Operators
To be determined through international competitive bidding following project structuring
Risk Assessment
General Risk Assessment
Major risks include: mineral market fluctuations affecting mining investment decisions; technical challenges in difficult terrain; potential environmental sensitivities in southern Tanzania; coordination between mining and railway development timelines; and financing challenges for large-scale infrastructure in remote regions. Risk mitigation includes phased implementation approach, comprehensive stakeholder engagement, and robust mineral market assessment.
Regulatory Risks
Requires integration of railway development with mining licensing and environmental frameworks. Regulatory issues include land acquisition in remote regions, environmental compliance for both railway and mining components, and harmonization of mineral and transport sector regulations.
Impact Assessment
Environmental Impact
The project requires comprehensive Environmental and Social Impact Assessment covering both railway and mining components. Key environmental considerations include watershed protection in ecologically sensitive areas, management of potential impacts from mineral transport (dust, spills), habitat fragmentation in previously undeveloped regions, and climate resilience measures for coastal sections vulnerable to flooding.
Social Impact
The project is expected to generate approximately 10,000 direct jobs during construction and 2,500 permanent jobs during operation, with additional employment in related mining operations. Socioeconomic benefits include development in historically underserved regions, skills transfer in railway and mining sectors, improved connectivity for isolated communities, and potential for industrialization around mineral processing hubs.
Investment Opportunities
Private Sector Opportunities
Significant opportunities exist for private sector participation in integrated mining-railway operations, with potential models including: mining concessions with railway development obligations; BOT arrangements for railway infrastructure; operations and maintenance concessions; and equipment supply and maintenance services.
Next Steps & Agreements
Next Steps
Complete comprehensive pre-feasibility studies; develop integrated mining-railway development framework; secure technical assistance funding for detailed studies; advance mineral developer engagement; establish project implementation structure
Offtake Agreements
The railway development will be linked to mining concession agreements, with take-or-pay arrangements to ensure minimum cargo volumes. Railway access agreements will establish operational parameters, maintenance responsibilities, and performance standards.
Contact Information
Eng. Masanja Kadogosa, Director General, Tanzania Railways Corporation, Email: info@trc.co.tz; Dr. Hassan Abbas, Permanent Secretary, Ministry of Minerals, Email: ps@madini.go.tz
