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Months later and the Russian/Ukraine conflict is benefitting Tanzania

Tanzania coal
  • Tanzanian coal exports experience a remarkable seven-fold increase in response to Europe's energy crisis caused by the Russia-Ukraine conflict. 
  • Port of Mtwara witnesses unprecedented operations as coal shipments contribute to significant revenue growth for the government. 
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  • European demand for Tanzanian coal is expected to decline in the long term due to the EU's carbon emissions policy, aiming for a net-zero economy by 2050.

According to the most recent data from Tanzania's central bank, Tanzanian coal exports experienced a seven-fold increase in the year to March as a result of the strong demand brought on by Europe's energy crisis as a result of Russia's invasion of Ukraine.

In September 2022, Business Insider Africa reported that the rise in demand for coal is a result of the ongoing war between Russia and Ukraine. Europe which is typically dependent on Russia for its thermal coal and natural gas has had to look elsewhere for this pollutant energy source.

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Currently, Tanzania, which has 1.9 billion tons of known coal reserves, experienced an increase in its coal exports to $223.8 million. “Exports of coal edged up to $223.8 million from $31.9 million, induced by rising demand for alternative energy, amid supply challenges caused by the war in Ukraine,” the Bank of Tanzania (BoT) relayed via its Monthly Economic Review for April 2023.

The once-sleepy port of Mtwara is now seeing unheard-of operations, and the government is generating large profits from the exports thanks to the rebounding coal demand.

According to Norbert Kalembwe, manager of Mtwara Port, the port handled about 1.5 million tonnes of cargo from July 2022 to March this year, with coal making up approximately 80% of the total.

“Up to March this year business has been good. We have seen an increase in revenue both for the port and government collections,” Mr Kalembwe said.

Additionally, the number of oil exploration projects in Africa has also experienced a significant increase, with Tanzania being one of the primary regions of interest. The Tanzanian and Ugandan governments are working together to increase their oil production capacity, and some significant European oil companies have already started forming commercial alliances with these nations, delayed only by environmentalist groups looking to prevent an oil-induced humanitarian crisis.

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The need for coal has conflicted with initiatives to switch to sustainable energy as countries attempt to wean themselves from Russian gas.

The amount of Tanzanian coal shipments to Europe is anticipated to fall in a few years as a result of the EU's policy on carbon emissions, according to Manfredo Fanti, director of the European Union Delegation to Tanzania.

“In the short-term and with the effect of the war, the EU has increased its import in coal, but we shouldn’t expect that to last in the next few years to come,” he said. By 2050, European nations hope to have a net-zero economy in terms of greenhouse gas emissions, ending the use of coal.

This is a Business Insider Article, for more articles like this, visit africa.businessinsider.com

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