Tanzania is positioning itself as a strategic alternative in global critical mineral supply chains as governments and investors seek to diversify away from China's dominance in mineral processing and refining.

The 2026/27 budget proposal reinforces mining as a pillar of economic growth, with a focus on downstream value addition. Proposed reforms to Framework Agreements aim to reduce regulatory uncertainty, giving investors greater confidence by simplifying the implementation of tax incentives for large-scale mining projects.

Critical minerals are in a bottleneck. China controls 90% of global processing and refining capacity, which makes competitors like the US nervous and leaves mineral exporting countries worse off. While this dependence will not disappear overnight, governments and investors are increasingly seeking alternative suppliers. Tanzania appears determined to position itself as part of that solution.

Critical minerals account for roughly 50% to 55% of Tanzania's total national export value, positioning it as the country's third-largest industry and making Tanzania the leading mining economy in East Africa. As the world looks to diversify away from Chinese critical minerals, Tanzania is quietly positioning itself as an attractive destination for both domestic and international mining investment.

Over the past five years, the government has established more than 40 mineral markets and buying centres across the country, significantly improving transparency in mineral trading, reducing smuggling, and enabling small-scale miners to sell their minerals at competitive prices.

Tanzania's latest budget, presented in June, outlines plans to elevate the mining sector by placing the industry at the centre of plans for economic growth, domestic revenue generation, industrial development, and job creation. The budget, which takes effect on July 1, is the country's largest spending plan to date, with nearly three-quarters of revenue raised domestically and a target of 6.3% GDP growth in 2026.

Beneath the headlines are two reforms that reveal a deeper strategy: reducing regulatory uncertainty for investors while strengthening the long-term foundations of the domestic mining industry.

The first concerns Framework Agreements. Under the proposed reforms, tax exemptions contained in Cabinet-approved Framework Agreements would no longer require additional Government Notices before taking effect. While the exemptions themselves are not new, embedding them more directly into law reduces a source of uncertainty that has long complicated investment planning for large-scale mining projects. For investors considering multi-billion-dollar commitments over many years in rare earths and other critical minerals, regulatory certainty can be as important as the incentives themselves. Framework agreements have introduced elaborate institutional mechanisms aimed at addressing the one-size-fits-all framework, developing tailored approaches and treaties specific to particular mining companies. The removal of Government Notices at the local levels has also slashed bureaucratic red tape and disrupted corrupt networks.

The second reform looks beyond large international projects. The government has proposed allocating 10% of gross mineral revenue collections to a Mineral Research Fund. The objective is to improve geological knowledge, exploration capacity, and technical support across the sector. This is particularly significant for small-scale miners, who employ thousands of Tanzanians and account for roughly 40% of mineral revenue, yet often face challenges related to information gaps, productivity, and access to modern mining techniques.

Taken together, the proposals suggest Tanzania is deliberately positioning itself as a long-term destination for mining capital. This is a marked contrast to the development strategies adopted by other East African countries. The Democratic Republic of Congo, for example, has historically supplied over 60% of the world's cobalt supply. In 2025, when cobalt prices hit a nine-year low, the DRC tried to regain leverage by capping cobalt exports. While those interventions demonstrated DRC's influence over global cobalt markets, Tanzania's strategy focuses on attracting investment through regulatory predictability, geological knowledge, and downstream value addition.

Whether this approach ultimately succeeds hinges on implementation. Government will need to empower institutions to oversee the policy changes, address auditing gaps, and fix delayed approvals due to understaffing. Questions remain about how the new Framework Agreement provisions will operate in practice, including what documentation investors will require, what equitable economic sharing means, and whether the rules will apply to existing agreements.

However, the direction of travel is increasingly clear. At a time when governments and manufacturers are seeking alternative sources of critical minerals, Tanzania is signalling that its competitive advantage may lie not in controlling supply but in providing the certainty required to attract long-term investment.