Dangote Cement has turned to locally-mined coal to fire its cement plants because of gas shortages due to militant attacks on Nigerian facilities and to lower its production costs.
“All our cement plants have been converted to coal,” Aliko Dangote, the company’s billionaire majority owner and chairman, told a business conference on Thursday, adding they would use 12,000 metric tonnes of coal each day.
Dangote is shifting to coal rather than gas to fire the kilns which produce clinker, an ingredient of cement.
BUA Group said it is also switching one of its plants in northern Nigeria to run on coal to fire its kiln to address fuel shortages. It said technological advances have helped in the processing of coal to reduce emissions. Dangote’s main cement plant is also located in northern Nigeria.
BUA Group said its other plants in the south of the country still run on gas to heat the kilns.
Coal’s use to generate U.S. electric power fell in April to its lowest monthly level since 1978, the U.S. Energy Information Administration said in a June report. Natural gas, meanwhile, surpassed coal as the United States’ top fuel source for the third straight month, the EIA said.
But gas shortages have plagued Nigeria, with militants in the oil heartland of the Niger Delta regularly disrupting the West African nation’s oil and gas production.
Dangote, Africa’s biggest cement producer, has an annual production capacity of 43.6 million tonnes and targets output of between 74 million and 77 million tonnes by the end of 2019 and 100 million tonnes of capacity by 2020.
The company has invested more than $5 billion to expand outside its home market in the past few years.
Dangote said Nigeria has become a cement exporter generating $1.25 billion of sales as against annual imports of $2.5 billion which the country would have spent before the sector was liberalised in 2002.