After last year’s deal by Tanzania’s government to supply natural gas to Dangote Cement Company in the southeastern town of Mtwara, the state has offered land to the Nigerian company to mine coal for its operations.
Tanzania’s Ministry of Energy and Minerals on Saturday handed a 10-square-kilometre plot of land to the $500 million cement factory set up in 2015 with an annual capacity of 3 million tonnes.
According to local media The Citizen, the move was sanctioned by President John Magufuli to allow the company get a reliable supply of coal to fuel its activities.
Tanzania has banned the importation of coal from South Africa and Tancoal, the only one coal producing company in the country, cannot meet the entire market demand.
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)”.
Dangote, Africa’s biggest cement producer, is seeking to double Tanzania’s annual output of cement to 6 million tonnes.
It plans to roll out plants across Africa.