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Tanzania’s new president comes out as firmly pro-business, and highlights helium, nickel and gold

It’s barely been a month since Samia Suluhu Hassan took office as the new President of Tanzania, but already the air of change is palpable.

First things first, she’s hit the ground running with a very proactive approach to tackling the country’s coronavirus crisis – in marked contrast to her predecessor John Magafuli, who had taken a more laissez-faire attitude.

But it’s not just her approach to health that’s different.

It’s also her approach to wealth.

In a wide-ranging televised address she spoke of a need to revitalize Tanzania’s connections with the wider world, citing in particular the need to make the country a hospitable place for foreign investment.

“We need investors more than they need us,” she said, midway through the speech, as she mandated her newly-appointed foreign affairs minister to mend relationships with the international community.

Tanzania’s had a mixed record in recent years when it comes to foreign investment. The country’s dispute with Acacia Mining was well publicized, and although most neutral observers felt that Acacia was at least as at fault, if not more so, than the government, sentiment nevertheless took a dive.

Now that Acacia has been subsumed by Barrick, much of the antagonism has dissipated, but the dispute itself hasn’t been settled.

A settlement will now be a priority, said President Hassan, not just of the Acacia dispute, but of all outstanding tax and other issues with mining companies.

So, it looks as if Tanzania is once again wide open for business, and that the President is keen to get things moving as fast as possible.

And it’s not all vague generalities and big promises either.

President Hassan was quite specific about some of the areas in which she wished to smooth the investment process and encourage growth, namely helium, nickel and gold.

Tanzania was first opened up to mining in a significant way in the late 1980s, when pioneers like John Park and Algy Cluff worked their way across the Lake Victoria Goldfields region which now hosts some of Barrick’s biggest mines.

But it’s not only gold that the country is endowed with. There are also significant graphite, nickel, uranium, coal and gemstone deposits and projects, some of which have a long track record of production, and others of which are comparatively new.

But for the next generation of Tanzanians, it may well be helium that’s the real game-changer.

President Hassan is probably one of the few world leaders in history to name-check helium in what amounted to her inaugural address to the nation.

Why did she do it?

Because the Rukwa helium project in the south west of the country looks as though it’s going to the be the world’s largest primary producer of helium, bar none.

And if primary helium production has been an obscure topic to the world’s investors up till now, it looks very much as though that’s about to change.

With the clear support of President Hassan, the project’s owner, Helium One (LON:HE1), is keen to get cracking with the next stage of development work as quickly as possible.

The thinking is that once up and running, Rukwa could supply between 10% and 15% of the world’s helium needs for the next hundred years. And given that helium is essential in the manufacture of MRI scanners, fibre-optics, rocketry, aerospace products and semiconductors, what we are talking about here is a raw material for the high end of the high-tech industry.

In that context it’s no wonder President Hassan wants to create a safe and secure investment environment – some pundits indeed, have drawn an analogy between Tanzania’s helium reserves and Saudi Arabia’s oil reserves.

Both Tanzania and Helium One have work to do. But companies like Shanta Gold (LON:SHG) have already shown that it’s possible to make a success of working in Tanzania, even when there are some headwinds.

Now that there’s new impetus, desire and a willingness to make things happen at the top of government, anything’s possible.

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