On Monday, Tanzanian government awarded a coal mining license covering about 10 square kilometers to the $500 million cement factory set up in 2015 by Aliko Dangote, as part of plans to lower the company’s production costs and ease disruptions caused by energy shortages.
Tanzanian president, John Magufuli, last week gave the government officials a seven-day ultimatum to allocate a coal mining area to Dangote within the mineral-rich Ngaka coal fields, which are licensed to another company.
Dangote wants to double Tanzania’s annual output of cement to 6 million tons. As Africa’s biggest cement producer, Dangote Cement has an annual production capacity of 43.6 million tons. It targets an output of between 74 million and 77 million tons by the end of 2019 and 100 million tons of capacity by 2020.
Dangote runs on expensive diesel generators and requested Tanzanian government support last year to supply natural gas at a reduced price.
President Magufuli later intervened after a meeting with Nigerian billionaire and the company’s owner Aliko Dangote over stalled negotiations on prices.
He blamed middlemen for the delay in supply plans and said Dangote “will now buy natural gas directly from the state-run TPDC (Tanzania Petroleum Development Corporation)”.
Sources; Reuters, The Citizen Tanzania