Tanzania: Light At the End of the Tunnel – How Electrification Is Powering Tanzania’s Small-Scale Mining Sector
STORY HIGHLIGHTS
- The Government of Tanzania’s rural electrification campaign is boosting mining profitability, creating jobs, and improving livelihoods, with support from the World Bank.
- The Rural Energy Agency (REA) has connected 213 small mining businesses to the grid, reducing their reliance on expensive diesel generators and increasing their productivity.
- With improved sector prospects, a young female engineer is breaking barriers and building a successful career in a male-dominated industry.
GEITA, March 6, 2025 – After eleven years working abroad, Charles Buzalwa returned home to Geita, Tanzania, determined to build his own business. In 2021, he settled in Shikonoka, a remote village, and invested his savings of Tsh 450 million (~$174,000) in a quarry and mining operation–fully cognizant of the challenges he would face due to the lack of electricity in the area.
“We were aware the government had plans to bring electricity to small mining industries in the region because they are critical to the local economy,” he explained, “so I remained hopeful.” His optimism was tested. Initially, the amount he spent on fuel to run his jaw crushers accounted for a staggering 85% of his daily costs–Tsh 1.2 million out of Tsh 1.5 million–while he spent Tsh 300,000 on labor. The business barely survived.
While other mining ventures in the region succumbed to the challenges of operating without grid power, Charles’s technical skills proved invaluable. He became his own mechanic, thus minimizing repair costs and maximizing productivity where others faltered. “My personal expertise was a huge advantage,” he said. “While other small mining companies spent most of their revenue on machine repairs, in addition to fuel, I could keep such costs down on my side.” For three long years, he battled against the odds.
Finally, in early 2024, the long-awaited electricity arrived, courtesy of the Rural Energy Agency (REA). The impact was immediate and dramatic. Charles’s daily operating costs plummeted by almost 90%, from Tsh 1.2 million to just Tsh 100,000, as he switched from fuel-powered machinery to electricity.
Through its efforts to extend electricity access to underserved communities, REA has connected 213 small mining businesses in Tanzania, allowing them to modernize their operations and contribute more to local and national growth. REA’s campaign is part of the National Rural Electrification Program, an initiative led by the Government of Tanzania and implemented with the support of the World Bank through the Tanzania Rural Electrification Expansion Program (TREEP). Financed by the International Development Association (IDA), TREEP’s objectives include expanding access to reliable and affordable electricity services, increasing the share of renewable energy sources in the country’s energy mix, and enhancing energy security and resilience while improving the financial sustainability of the energy sector. To date, thanks to an initial $209 million in funding followed by an additional $341 million in 2022, TREEP has connected nearly 8 million people, over 1,600 healthcare facilities, close to 6,500 educational institutions, and more than 16,000 businesses to the electricity grid. The program’s success led to the launch of ASCENT TZ, a $300 million project also financed by IDA which aims to accelerate access to sustainable and clean energy solutions across Tanzania.
For Charles in Shikonoka, while the availability of electricity has significantly improved operations, his company still faces a considerable capital shortage that is preventing him from acquiring such essential equipment as additional trucks, electric compressors, and excavators. This has limited his production capacity. In 2023, for example, this bottleneck cost him a 15,000-ton order for aggregates from the Ministry of Water. Nevertheless, with the power now connected, Charles sees a clear path to attracting investment and expanding his production capacity.
“The grid connection has opened up opportunities for us,” he said. “Of course, we still need capital, but this now makes us much more attractive to investors. I am optimistic that, with the right investments, we can double our production capacity and even fulfill those bulk orders that we had to turn down before. The future looks good.”
In northwestern Tanzania, the arrival of grid power in Nyamagata ward thanks to TREEP has spurred growth in the area’s small-scale gold mining operations, showing how REA’s rural electrification is driving local growth and improving livelihoods.
Geita Resources Limited is one of over 20 such operations in the area. Before grid power arrived, the company spent over Tsh 1.4 million per day on fuel alone, which severely limited profitability. Since the connection, these unbearable costs have been drastically reduced, paving the way for the expansion of investments in both industry infrastructure and improvements in the lives of local miners.
“Having electricity has boosted our profitability,” said Yusufu Kulodeswa, the manager at Geita Resources. “This has allowed us to hire more miners. Previously, our operations were limited to daylight hours. But now, with reliable lighting, we can run night shifts, effectively doubling our production capacity and creating more jobs in the community.”
In Mbogwe District, Irene Kataraia is living her dream as a mineral processing engineer–a career path she never envisioned. While drawn to engineering in general, Irene initially had little interest in mining. “In secondary school,” she explains, “mining was never on my radar. But when I applied to university, it was one of the courses where I was accepted.”
Upon graduation, she had to battle with the perception that mining is a male domain in which she had no chance to succeed. “It wasn’t easy,” she says. “Given the stereotype that women can’t thrive in male-dominated industries like this one, I wondered if I was setting myself up for failure. But with hard work and determination, things become easier.”
Her turning point came during practical training. “I developed an interest in mining during my field work. I noticed there was a gender gap, and the mentorship offered to women at the place I was training at motivated me to consider moving into this sector,” said Irene.
Finally, her aspirations took her to Waja, a mineral processing company in Mbogwe where she oversees operations over a thousand kilometers from her home in Dar es Salaam. There, more challenges awaited her. “I found the environment so unwelcoming without the electricity, especially as I was coming from the bustling city life. It was a big adjustment, but I adapted with time.”
Before electrification, the mine relied on costly and inefficient diesel generators. Fuel expenses alone amounted to a staggering Tsh 3 million per day, and the 15-kilometer trek for refueling was also a constant drain on time and resources. On days when fuel was scarce, production ground to a halt.
In 2023, the government’s rural electrification plan brought power to the village of Lubeho, where the mine is located, and the impact was immediate. Daily operating costs dropped to Tsh 200,000, and production stabilized between 90 and 100 tons per day.
But the benefits extended beyond operations. “Before, even watching TV was not possible and you had to use your phone battery sparingly,” said January, who works at the mine. “Sometimes, during big games like Simba vs. Yanga or involving the national team, we had to walk about two kilometers away in the dark. We would return in groups, carrying sticks for our protection from the wild animals. Today, we can watch football in the shade right here, charge our phones at any time, bathe with clean water. It is a huge improvement.”
Crédito: Link de origem