State caught in the middle: Coal extraction and community struggles in Tanzania.

This paper focuses on how the re-emergence of the state in Tanzania’s coal sector is affecting relations between investors and local populations. Recent research on large-scale investments in natural resources has mainly focused on the state as an investment facilitator. Its duty to protect local rights has also been emphasised. The role of the state as an investor in its own right, which is currently on the increase due to growing resource nationalism, has received much less attention. The paper adopts the political economy of land and natural resource investments as an analytical framework to examine community–investor relations in Tanzania’s coal sector, which has recently seen the re-emergence of SOEs as shareholders in mining investments. The paper makes two contributions. First, it reviews the historical relationship between the state and local populations over the years and shows how it is influencing present-day relations between them. Secondly, it documents expressions and instances of local dissent towards investors and analyses empirical changes in contemporary investment dynamics in the context of remerging SOEs, showing how local deals change over time, as SOEs learn from changes in local-level politics and from their foreign partners. It finds that, in respect of investments in the coal sector involving SOEs, securing community consent is not the main priority for investors at the start of the investment cycle, where investments are framed as national projects. Efforts to reach a ‘local exchange deal’ are more likely to be made when resource extraction is already taking place and conflicts have arisen that have to be resolved. By incorporating the state as an investor, the paper offers lessons for SOEs in re-thinking their strategies as they approach new projects at a time when revived SOEs are increasingly being tasked with ambitious extraction projects.