Tanzania and Nigeria’s Dangote Cement have reached an agreement on the supply of natural gas to the firm’s manufacturing plant in the East African country after negotiations stalled over prices, Tanzanian President John Magufuli said on Saturday.
The $500 million cement factory in the southeastern Tanzanian town of Mtwara, set up last year with an annual capacity of 3 million tonnes, runs on expensive diesel generators and has sought government support to reduce costs. However, the negotiations had stalled with the state-run Tanzania Petroleum Development Corporation (TPDC) saying the company was seeking “at-the-well prices”.
After meeting Aliko Dangote, the company’s chairman, Magufuli blamed unspecified middlemen of interfering with supply plans and said the issue has now been resolved with gas supplies to be sold at a “reasonable” tariff.
“They (Dangote Cement) will now buy natural gas directly from the state-run TPDC instead of going through middlemen,” Magufuli told journalists after the meeting.