Let Dangote mine coal locally, directs Magufuli

Dar es Salaam. President John Magufuli yesterday directed that Dangote Cement Company be allowed to mine coal locally for its factory in Mtwara.

Dr Magufuli directed National Development Corporation (NDC) to allocate the firm a section of Ngaka coal mine in Mbinga District, Ruvuma Region.

President Magufuli issued the directive before commissioning 580 heavy-duty lorries that will be used to ferry cement from the factory to other parts of the country.

President Magufuli said he was aware that production at the plant has been facing a number of challenges, including bureaucracy in obtaining coal from Ngaka.

He added that coal production under Tancoal Energy Limited, which has been contracted by NDC, was “very poor”.

“Under the current arrangement, it is very difficult to ensure that the investor gets enough coal for cement production because of poor production capacity. You should therefore give Dangote a piece of land at the mine so that he can produce coal for his factory,” said President Magufuli, referring to Nigerian billionaire Aliko Dangote, who attended the ceremony. Mr Dangote is the founder, president and chief executive of manufacturing conglomerate Dangote Group, which owns the Mtwara cement plant.

Dr Magufuli also directed the relevant state agencies to investigate the deal between Tancoal and NDC.

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

Dr Magufuli also directed the Minister of Energy and Minerals, Prof Sospeter Muhongo, to make sure that natural gas was directly delivered to Dangote Cement Company through a mains line, adding that there should be no intermediaries in the work.

“It doesn’t make sense that natural gas is transported to Dar es Salaam, some 500 kilometres away, and not to Dangote Cement, which is only about 10 kilometres from where the gas is produced,” the Head of State added.

Earlier, the Minister of Finance and Planning, Dr Philip Mpango, said the company had paid Sh46 billion in taxes since it was established.

For his part, Mr Dangote promised to build a hospital and school in Mtwara Region as part of his group’s corporate social responsibility policy.

Cement manufacturers in the country have for a number of years been complaining about the quality and availability of locally produced coal.

A report compiled between August and September 2015 by a five-member independent committee chaired by Dr Augustine Hangi listed major challenges cement manufacturers have been grappling with in recent years. They include poor and/or fluctuating quality of coal, damage to kilns and a decrease in overall productivity.

The Commissioner of Minerals tasked the team with establishing why major coal users in the country, especially cement manufacturers, prefer imported to local coal. The investors have been urging the government to lift the ban imposed on coal importation.