For decades, Tanzania’s extraordinary mineral wealth was a symbol of a familiar problem across Africa: valuable resources were extracted locally, while much of the wealth generated from them flowed elsewhere.

Today, Tanzania is trying to change that equation.

The country is rapidly transforming its mining industry, attracting billions of dollars in foreign investment while rewriting the rules to ensure that a larger share of the value created by its natural resources remains inside the country.

The story of Tanzanite offers a striking illustration of why this transformation matters.

The Tanzanite Story

In 1967, a Maasai herder named Jumanne Mhero Ngoma discovered a cluster of unusual violet crystals in the Mereli Hills near Arusha, Tanzania.

For his discovery, Ngoma received 50,000 Tanzanian shillings — equivalent to roughly $22 in today’s money.

The commercial rights to the mineral, however, went to Henry B. Platt, then vice president of the American jeweler Tiffany & Co. and great-grandson of the company’s founder, Louis Comfort Tiffany.

Platt gave the gemstone its now-famous name: Tanzanite.

Tiffany subsequently promoted the stone aggressively, famously marketing it as a jewel that could be found in only two places: Tanzania and Tiffany’s.

The marketing campaign helped turn Tanzanite into a globally recognized gemstone.

Between 1967 and 1971, an estimated 2 million carats of Tanzanite were mined in Tanzania and sold almost exclusively through Tiffany. Those stones could be worth as much as $1.2 billion today.

The contrast is striking: the person who discovered the mineral received what would now be only a few dozen dollars, while the gemstone became a highly valuable international commodity.

Tanzania's experience was far from unique.

Across Africa, countries rich in gold, copper, cobalt, diamonds and other strategic minerals have often struggled to capture a proportionate share of the wealth generated from their natural resources.

But Tanzania is now attempting something different.

From Tourism to Mining

Over the past two decades, Tanzania’s mining sector has expanded rapidly while becoming significantly more diversified.

By the mid-2000s, minerals had overtaken tourism as the country's leading source of foreign currency.

The momentum has accelerated in recent years. Since 2021, government revenue from mining taxes and royalties has more than doubled.

Gold has been particularly important. Tanzania's gold exports increased by 38.2% last year, reaching a record $4.7 billion. Meanwhile, mining's contribution to the country's GDP surpassed 10% for the first time.

Gold and graphite are only part of the story.

Mineral sands mining is underway at Fungoni-Kigamboni and Tajiri, while a new processing plant is being built in Tanga. Tanzania is also developing a government-approved niobium project at Panda Hill, which could eventually help make the country one of the world's four largest niobium producers.

The result is an increasingly diverse mining industry rather than one dependent on a single commodity.

Tanzania Changes the Rules

The most important transformation, however, may not be geological. It is regulatory.

Since 2017, Tanzania has significantly rewritten the framework governing its mining industry.

Amendments to the country's Mining Act gave the government a 16% non-dilutive, free-carried interest in large-scale mining licenses.

The country's local-content requirements have also been designed to increase Tanzanian participation in mining projects and their supply chains, including requirements involving local companies and equity participation.

President Samia Suluhu Hassan has described the philosophy behind this approach as "sovereign pragmatism."

The idea is relatively straightforward: Tanzania does not have to choose between foreign investment and national interests.

Instead, it can welcome international capital while ensuring that the Tanzanian state, businesses and workers capture a larger portion of the economic value.

That represents a significant shift from the traditional model in which governments primarily collected royalties and taxes from foreign-owned mining operations.

Under the new approach, the state seeks to become a direct participant in the country's mineral wealth.

Investors have also pointed to improvements in areas such as land titling and judicial efficiency as factors making Tanzania a more predictable place to operate.

Can Resource Nationalism Attract Investment?

Tanzania's strategy was not without risks.

Given the country's history of resource nationalism, there were concerns that tougher regulations and greater government participation could discourage international mining companies.

So far, the opposite appears to be happening.

The global race for critical minerals, combined with Tanzania's willingness to engage with private investors, has created new opportunities.

Over the past four years, the country's mining sector has attracted approximately $3.3 billion in private investment.

That is particularly significant because critical minerals have become strategically important as governments and companies compete to secure supplies for electric vehicles, batteries, renewable energy and advanced technologies.

Tanzania increasingly finds itself at the intersection of these global trends.

Kabanga: The Big Test

Perhaps the most important test of Tanzania's new mining strategy is the Kabanga nickel project.

Kabanga is considered one of the world's largest undeveloped nickel deposits. Nickel is an important material for batteries and other modern technologies, making the project strategically valuable well beyond Tanzania's borders.

A US government-backed consortium, Orion CMC, supported by Abu Dhabi's L'imad Holding, is moving toward a decision on developing a refinery in Tanzania.

The objective is particularly important: rather than simply exporting raw nickel ore, Tanzania wants more processing and value creation to take place domestically.

The proposed facility would produce battery-grade nickel, potentially allowing Tanzania to capture more economic value from its natural resources.

The consortium is also negotiating a $500 million to $600 million minority stake in Kabanga.

For Washington, the project offers another way to diversify critical-mineral supply chains and reduce dependence on China.

For Tanzania, the potential benefits extend beyond exports.

A successful project could generate jobs, expand the domestic industrial base and increase tax revenues while bringing advanced processing capabilities into the country.

That combination could become a blueprint for how resource-rich developing countries engage with global investors.

Not Every Project Is Moving Quickly

Tanzania's mining story is not entirely a success story yet.

Two Western-linked graphite projects, Nachu and Mahenge, have encountered significant delays.

Nachu spent roughly a decade facing setbacks and had previously been associated with a proposed binding offtake agreement involving Tesla. Eventually, the project became part of a Nasdaq-listed company whose main business was freeze-dried sweets — an unusual twist for a major graphite development.

Mahenge, meanwhile, is located on what is described as the world's second-largest graphite reserve and has attracted an established international investment group.

However, its final investment decision has repeatedly been postponed, most recently to November 2026.

Such delays are not necessarily evidence that Tanzania's strategy is failing. Large mining projects frequently take years to reach construction and production because of financing, permitting, infrastructure, commodity prices and technical considerations.

Building a mining industry capable of competing globally takes time.

Diversifying Beyond a Single Foreign Partner

Another important element of Tanzania's strategy is its approach to international relationships.

Rather than becoming heavily dependent on a single country or investment bloc, Tanzania has sought capital and partnerships from multiple sources.

Chinese, American and Gulf investors have all become part of the country's broader mining landscape.

This diversification could give Tanzania greater negotiating power.

If a country relies almost entirely on one foreign investor or one export market, its bargaining position can weaken. By maintaining relationships with multiple global powers, Tanzania can potentially avoid becoming overly dependent on any one source of capital.

For a country seeking to maximize the value of its natural resources, that flexibility can be strategically important.

From Tanzanite to a New Mining Model

There is an important historical irony in Tanzania's transformation.

The country's mining industry became internationally famous partly because of Tanzanite — a gemstone discovered by a Tanzanian herder that generated enormous commercial value while providing its original discoverer with very little financial reward.

Nearly six decades later, Tanzania is attempting to ensure that its next generation of mineral discoveries produces a very different outcome.

The goal is no longer simply to extract resources and collect royalties.

Instead, Tanzania wants to participate directly in mining projects, expand local ownership, develop processing industries, create jobs and capture more of the value generated by its minerals.

That does not mean the model is without risks. More government involvement can create challenges for investors, while ambitious local-content requirements can become difficult to implement if domestic companies lack the necessary capital or expertise.

But Tanzania's recent experience suggests that stronger national control does not necessarily have to mean shutting the door to foreign investment.

The country's challenge is to strike the right balance.

A Potential Blueprint for Resource-Rich Nations

Tanzania is becoming an increasingly interesting case study for other resource-rich developing countries.

Its strategy combines stronger state participation with international investment, domestic processing with global supply chains, and diversification with long-term planning.

The ultimate test will be whether these policies translate into sustained improvements in living standards for ordinary Tanzanians.

If the Kabanga project moves forward as planned and Tanzania succeeds in establishing domestic processing capacity, the country could demonstrate that it is possible to attract major international investors while retaining a greater share of the economic value generated by natural resources.

The question, therefore, is no longer simply whether Tanzania has minerals.

It clearly does.

The more important question is who will benefit from them.

For decades, the answer was often international investors and trading companies.

Tanzania is now trying to change that answer — and in doing so, it could provide a valuable model for other countries seeking to turn natural-resource wealth into long-term national prosperity.