Gas shortage: Dangote Cement, BUA Turn to Coal

Economic DiversificationAliko Dangote, chief executive officer of Dangote Group.

Dangote Cement Plc and BUA Group have turned to locally-mined coal to fire their cement plants and to lower its production costs.

The decision, the companies said, was because of gas shortages due to militant attacks on Nigerian facilities.

“All our cement plants have been converted to coal,” the Chairman, Dangote Cement Plc,  Aliko Dangote, told a business conference on Thursday, adding that 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,Reuters said.

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 had helped in the processing of coal to reduce emissions.

Dangote’s main cement plant is located in Nigeria’s Kogi State.

BUA Group said its other plants in the south of the country still ran on gas to heat the kilns.

Coal’s use to generate the United States electric power fell in April to its lowest monthly level since 1978, the US Energy Information Administration said in a June report.

Natural gas, meanwhile, surpassed coal as the US’ 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 $5bn to expand outside its home market in the past few years.

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Samed Olukoya
Samed Olukoya is the CEO/Founder of, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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