Dangote shuts down cement plant in Tanzania

Nigerian billionaire Aliko Dangote has shut down his $500 million cement plant in Tanzania due to high energy costs and a technical glitch, according to Tanzanian media.

Officials at Dangote Industries Tanzania have made complaints about the government’s failure to provide the company with cheap fuel and other logistical solutions.

Dangote cement spends as much as $4 million on diesel every month powering its cement factory.

“Our plant uses six million liters of diesel per month to run generators after the promises to supply it with natural gas, which is produced in a nearby gas field, failed to materialize,” Dangote Tanzania CEO, Harpeet Duggal, had told a group of politicians in October.

However, the acting commissioner of minerals in the Ministry of Energy and minerals, John Shija, has defended Tanzania’s coal as being better than imported coal both in terms of quality and price.

“While coal produced in Tanzania is sold at $90 per ton with transportation costs included, coal from South Africa is sold at between $103 and $118 per ton – transportation costs included, “ Shija told a group of journalists on Thursday at a press conference in Dar es salaam on Wednesday.

“We have banned the importation of coal to secure our local coal which is also better than the others in quality,” he said.

An official at Dangote Industries Tanzania who spoke on the condition of anonymity said the company wants the government to honour the agreement reached by the previous government.

Tanzania’s Minister for Industry, Trade and Investment, Charles Mwijage, in a press conference on Wednesday said Dangote Cement is still enjoying the same incentives it was promised when the company was invited to invest in Tanzania.

“Of course, it is difficult to fulfill an investor’s wishes by 100 per cent… indeed many wish for more and more tax reliefs, but a law was passed to control tax incentives by the last regime in 2014,” the minister said.

But a source at the Tanzanian Presidency claims that Dangote Cement is caught up in political infighting – a crossfire between the previous and current administration.

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