Give us limestone – Dangote tells gov’t

 

By Basiru ADAM

Nigerian cement giant Dangote, which entered the Ghanaian market in 2010, says it has been restricted to bagging cement produced in Nigeria because the company is yet to get limestone allocation from the government of Ghana to start local production.

“If we get limestone today, within 24 months we will be producing,” Alhaji Tajudeen Sijuade, Vice Chairman of Dangote Cement Ghana Limited, told B&FT at the company’s plant in Tema where tonnes of finished cement are bagged for the Ghanaian market.

 

Ghana’s limestone deposits, he said, have been “encumbered” by people who have applied for mining and exploration licences but do not have money to go into the business of producing cement.

“They are waiting for somebody to partner with. But it is dangerous to partner with somebody in the cement business because to produce 6 million tonnes of cement the equipment costs about US$6billion, and that is why we want to get the allocation directly from government – which actually owns all mineral deposits,” he said.

A similar situation prevailed in Nigeria until the government ordered that those who had been holding licences for five years without producing should give it up, Alhaji Tajudeen said.

Dangote has three plants in Nigeria and produces 20 million metric tonnes per annum.
Ghana’s limestone deposits are said to occur in four major areas, including Buipe in the Northern Region – where Dangote hopes to produce from – and serve not only Ghana but the landlocked countries of Burkina Faso and Mali. Limestone deposits occur in other areas like Nauli, Oterkpolu and Bongo-Da. Minor deposits also occur in various parts of the country.

Government of Ghana data indicate that since 1916 when the Buipe limestone was discovered, thus leading to subsequent discoveries, various geological exploratory works have been carried out at different periods, leading to the mining of the Oterkpolu deposit as filler for the production of Portland cement.

But until Ghacem, the market leader with 55 percent share, set up a US$2million plant at Yongwase-Krobo in the Eastern Region in 2004 to produce cement from limestone, Ghana’s limestone deposits had largely been unexploited.

Yet in the main, cement companies in the country import clinker and crush it into fine cement powder.

In a rapidly expanding economy like Ghana’s, the demand for cement is huge. “This year alone we are thinking it [demand] should be between 6.5 and 7 million metric tonnes because of the construction work that people promised during the election campaign. And we have been reading in the papers that companies are looking at coming to Ghana to do serious construction work,” Alhaji Tajudeen said.

The ever increasing cost of cement in the country, meanwhile, has been a source of worry for many citizens, most of whom would rather put up their own houses, with industry players admitting that demand far outweighs supply in the country.

With a current market share of 11 percent, Dangote Cement believes that it could contribute significantly to reducing the supply-side deficit if it begins producing in Ghana. The company says it could also create jobs far beyond the 450 it currently provides, of which only four are non-Ghanaian.  

“We will not leave Ghana until we produce cement,” Alhaji Tajudeen declared confidently.  
Green View International Company Limited, a subsidiary of Dangote Group, says it has invested over US$28 million so far into its cement-packaging plant in Ghana.

Dangote supplied onto the Ghanaian market 545,000 tonnes of Portland cement in 2012, and is hoping to inch it up to two million tons in 2013, noted Alhaji Tajudeen.

 

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