Aliko Dangote is planning to invest in developing Mbinga coal mine in the southwest of Tanzania. This was disclosed during a meeting between Dangote and Tanzania’s Vice President Mohammed Gharib Bilal at the Africa Global Business Forum in Dubai.
Dangote is expecting that the coal from the mine will be used to power Mtwara Cement plant, located in the same region in the country. The amount of investment for the new coal plant is, however, undisclosed. The coal will be utilized to finance transportation of cement across the borders of Tanzania, according to reports.
Dangote Cement is targeting to take advantage of the surge in local demand for cement amidst increased construction activity in the region. Mtwara cement plant will have a production capacity of 3 million tpa of cement when complete.
According to the company group website, Tanzanian economy – which is expected to grow at 7.0% in five years to come – has experienced a surge in cement demand fueled by improved economic performance. Tanzania economy is expected to grow at this rate, supported by manufacturing, mining and tourism sectors.
Apart from helping power the Mtwara cement plant, investment in the Mbinga coal mine will also help generate about 3000 employment opportunities. Tanzania also has good limestone and Gypsum deposits and is attraction good investment opportunities in the mining sector. By having a cement plant in the country, Dangote is banking on these opportunities.
Dangote is also planning to venture in more cement production in the region, and has already announced plans to increase its production capacity for a planned cement plant in Mombasa Kenya. Construction at the 1.5 MTPA Integrated Cement plant in Mtwara is already in progress, and the plant is expected for commissioning in Q2 of 2014. Dangote’s other cement plants in the region include the proposed plant in Kenya to have 3MTA, their plant in Nigeria and Ghana, among others. The company has declared intentions to expand in other parts of Africa where it has not been operational, and also in Latin America and Middle East.