Tanzania’s cement market is set for a major shakeup in pricing after Dangote Cement announced that its plant in the country’s Mtwara region will be powered by coal.
Nigerian-owned Dangote Cement says it is to develop a coal mine in Tanzania’s western region to supply fuel for a cement plant it is building in the East African country.
Dangote Cement is part of Dangote Group, which is owned by Africa’s richest man, Aliko Dangote. The cement plant it is building in the Mtwara region at a cost of $500-million will produce three-million tonnes a year from 2015.
“Dangote is expecting that the coal from the Mbinga mine will be used to power the Mtwara cement plant,” says Tanzania’s Vice President, Mohammed Gharib Bilal.
The announcent is expected to send shivers down the spines of other cement makers in Tanzania, where high energy costs have been blamed for exorbitant retail cement prices.
There are four cement makers in Tanzania with a combined production capacity of 3.8-million tonnes a year. This capacity is expected to more than double to 8.3-million tonnes a year when Dangote Cement’s new plant starts production and other manufacturers complete the upgrade of their plants.
Domestic cement consumption in the country stands at 2.2-million tonnes a year and is projected to increase to 3.9-million tonnes a year. With the massive capacity expansion, Tanzania expects to become a major cement exporter, particularly to neighbouring countries like Rwanda, Burundi, Uganda and the Democratic Republic of Congo.
The Tanzania plant is part of Dangote’s $4-billion pan-African investment drive.