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Dangote to commence coal mining

Dangote Cement Plc, a subsidiary of Dangote Group, plans to start coal mining at Ankpa, Kogi State by the close of 2016, the Group Chief Executive officer, Mr. Onne van der Weijde has said.

According to the group, the coal will be of a high quality to be used without blending in order to cope with gas shortages in the country.

Most of the cement producer’s production lines in Nigeria will have operational coal mills by September 2016. At present the company is using locally purchased coal that is blended with imported coal to ‘assure optimal quality.’

Mr. Onne van der Weijde added that, “Our investment in coal is enabling us to reduce our dependence on both oil and gas as fuel sources, thus protecting our production from disruption and improving margins”.

“We decided two to three years ago to diversify and re-risk fuel supplies,” he said, adding, “Klin fuel is the major cost of cement production; our group margins are affected by the mix of fuel in Nigerian klin.

Also back-up LPFO is often not available locally, forcing production shutdowns prior to use of coal, gas is priced is US dollars, but paid in naira and therefore is affected by foreign exchange, FX.

However, locally bought or mined coal will be priced in naira. Reviewing the operation in the first half, H1, of the year, he said that Dangote Cement grew sales volume by 60 per cent, saying that the growth is expected to continue in the second half of the year.

The Group financial highlights for H1 showed 20.6 per cent growth in revenue to N292.2 billion; Group cement volume was up 59.6 per cent to almost 13.0Mt, while Nigeria achieved record sales volume of 38.8 per cent to more than 8.7Mt after price reduction.

Source: Ghana/Starrfmonline.com/103.5fm/Miriam Hayford

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