RE: One Well, Big Potential12 Jan 2026 21:21
Is this why the share price is worthless🤔
Helium extraction in Tanzania has so far proven uneconomical mainly because the discoveries don’t translate into a commercially viable production system once real-world costs, scale, and market realities are applied. Here’s a clear, structured explanation.
1. Helium is present — but not in commercial form
Tanzania’s helium discoveries (notably in the Rukwa Basin) are helium-rich but methane-poor.
That sounds good on paper, but in practice it’s a problem:
Most profitable helium globally is produced as a by-product of natural gas
Tanzania’s helium is standalone, meaning helium must carry 100% of the costs
➡️ Without natural gas revenues to subsidise processing, helium alone rarely pays.
2. Low flow rates kill economics
Even if helium concentration is high, flow rates matter more.
In Tanzania:
Wells produce small volumes of gas
You need many wells to reach scale
This leads to:
High drilling costs per unit of helium
Rapid decline rates
Poor economies of scale
➡️ High concentration ≠ profitable production.
3. Extremely high capital expenditure
Standalone helium projects require:
Specialised separation units
Compression systems
Liquefaction or purification plants
Storage and transport infrastructure
For Tanzania:
All equipment must be imported
Financing costs are high
Projects lack nearby industrial demand to anchor long-term contracts
CAPEX per unit of helium becomes one of the highest globally.
4. Logistics and geography
Helium must be shipped as:
High-pressure gas or
Cryogenic liquid (–269°C)
Tanzania’s helium sites are:
Remote
Far from ports
Poorly connected by infrastructure
Transporting helium from inland Tanzania to global markets is expensive and technically risky, destroying margins.
5. Market reality: helium prices aren’t high enough
Despite periodic “helium shortages,” long-term contract prices remain below what Tanzania needs to break even.
Large producers (Qatar, US, Algeria) have:
Existing gas infrastructure
Low marginal costs
Ability to flood the market during shortages
Tanzania would be a high-cost producer competing in a price-controlled market.
6. Financing and credibility issues
Helium projects in Tanzania have faced:
Repeated delays
Over-optimistic reserve estimates
Shifting technical assumptions
This has:
Damaged investor confidence
Raised cost of capital
Made funding large facilities difficult
Without cheap capital, the economics collapse.
7. No local demand
Helium demand comes from:
MRI scanners
Semiconductor fabs
Aerospace
Tanzania has almost no domestic helium consumers
All production must be exported → higher logistics + zero pricing power
Simple economic summary
For helium to work, you usually need at least one of these:
✔ Large natural gas field
✔ Massive scale
✔ Existing liquefaction infrastructure
✔ Cheap energy and transport
Tanzania has none of the above.
Bottom line
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