Cement Plant Shuts In Tanzania Following Government Failure To Provide Subsidized Gas

December 2, 2016 11:23 pm0 commentsViews: 134

The energy costs have gone high and technical glitch is also seeing mounting up in Tanzania and this has led to the closure of $500 million cement factory of Africa’s richest man Aliko Dangote.

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Recently the executives of Dangote Industries Tanzania complained about the failure by government in providing cheap fuel along with other logistical solutions.

Prior to this, the cement factory had also requested the Tanzania petroleum Development Corporation (TPDC) to supply natural gas at subsidized prices to its Mtwara factory but a deaf ear was turned.

TPDC is government-owned energy company in the country.

The plant spends about $4 million a month on diesel to power machineries.

CEO Harpeet Duggal earlier had said, “Our plant uses six million liters of diesel per month to run generators after the promises to supply it with natural gas, which is produced in a nearby gas field, failed to materialize.”

The plant was strategically built to get cheap natural gas extracted in nearby fields as the previous government had promised for. The new president is learned to have refused to honor the agreement made between the plant and former President Jakaya Kikwete.

In between the plant resorted to import coal from South African and this has upset top government officials.

The South African coal comes cheaper than the natural gas.

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