Tanzania gives Dangote cement its own coal mine to boost production

In a bid to break a stalemate over energy supply to Dangote Cement’s new $500m plant in Tanzania, the country’s president John Magufuli has ordered a state agency to give the Nigerian producer its own coal mine.

As a result, Dangote, owned by Nigerian billionaire Aliko Dangote, received a 10-square-kilometre plot of the Ngaka coal mine in Ruvuma Region on 11 March, reports newspaper The Citizen.

The plant, opened in Mtwara in 2015 and expected to double cement supply in the developing country, is reported to have been using expensive diesel generators to make cement while talks have dragged on between Dangote and Tanzania Petroleum Development Corporation (TPDC) over the price Dangote will pay for supplies of the country’s new-found gas.

If this company gets enough coal, it will help to lower cement prices. This in turn will help to make the lives of the majority of Tanzanians better– John Magufuli, Tanzania’s President

TPDC claims Dangote wants to pay below market price for the gas.

Coal, meanwhile, another possible energy source, has become scarce in the country since the Magufuli government banned its import in August 2016.

Earlier in March Magufuli directed the country’s National Development Corporation to allocate Dangote a section of Ngaka coal mine, and complained that production by Tanzania’s own coal supplier, Tancoal, was "very poor".

"NDC and Tancoal should understand that the coal doesn’t belong to them, but Tanzanians," Magufuli said, reports The Citizen. "If this company gets enough coal, it will help to lower cement prices. This in turn will help to make the lives of the majority of Tanzanians better."

Speaking before commissioning hundreds of heavy-duty lorries needed to ferry cement from the Dangote plant to locations around the country, the president also instructed his Minister of Energy, Prof Sospeter Muhongo, to ensure a gas mains line was installed to the Dangote plant from the field 10km away.

The generous action toward Dangote has raised expectations of Tanzania’s other cement producers, who have long complained about energy supply, for similar treatment, say reports.

Image courtesy of Tancoal