Africa�s richest man Aliko Dangote has shut down his cement plant in Tanzania due

to high energy costs and a technical glitch at the $500 million factory, according
to a government source, who confirmed reports in Tanzanian media.

Executives at Dangote Industries Tanzania have recently complained about the

government�s failure to provide the company with cheap fuel and other logistical
solutions. Dangote Cement had previously requested the government-owned energy
company, the Tanzania petroleum Development Corporation (TPDC), to supply its
Mtwara-based cement plant with natural gas at significantly subsidized prices - a
request the government body turned down.

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.
Dangote plant was strategically built in Mtwara, in Tanzania�s southeastern region,
to take advantage of cheap natural gas that is extracted in nearby fields. While
the previous government led by former President Jakaya Kikwete had promised Dangote
cheaper prices for natural gas, the TPDC under the government of President John
Magufuli has refused to honor the agreement. In a bid to mitigate its energy costs,
Dangote Industries has resorted to importing coal from South Africa, which is
cheaper than natural gas � a move that has greatly upset top government officials
in the Magufuli-led government, primarily because Tanzania also possesses
substantial deposits of coal. In August, the government banned the importation of
coal from South Africa � a move that pundits believe was specifically targeted at
Dangote. The Tanzanian government has repeatedly requested that the cement behemoth
source its coal locally, but Dangote executives have complained that the coal,
which is mined from Songwe region, hundreds of kilometers away from Mtwara, is of
poor quality and unreasonably expensive.

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.