Dangote Cement plant is now using locally-mined coal to power the factory as disruption in gas supply threatens its operations and increasing production costs.
Aliko Dangote reacting to the situation, said, “All our cement plants have been converted to coal,” adding they would use 12,000 metric tonnes of coal each day.
Dangote’s move is unusual in an era when power generation is shifting away from coal.
Coal used to generate U.S. 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.
Currently, Nigeria is plagued by gas shortages with militants in the Niger Delta regularly disrupting Nigeria’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.