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Tanzania awards Dangote coal mining licence

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World Coal,

According to NASDAQ, Tanzania has awarded a coal mining licence to the local unit of Nigeria's Dangote Cement in order to lower the company's production costs and ease disruptions caused by energy shortages.

"The process of allocating a coal mining area to the Dangote cement factory was completed on March 11," Tanzania's energy and minerals ministry reported. "The company will be given a licence covering 9.98 km2 in the Ngaka area."

The cement factory in the southeastern Tanzanian town of Mtwara has a capacity of 3 million tpy. The Tanzanian President, John Magufuli, recently gave government officials a week-long ultimatum to allocate a coal mining area to Dangote within the mineral-rich Ngaka coal fields, which are licensed to another company.

The Ngaka coal basin in southern Tanzania, an area covering more than 840 km2, is licensed to Tancoal Energy Ltd. Intra Energy said it would work with authorities to hand over part of its licensed coal mining area to Dangote, but raised concern about what it called "special treatment" being given to the Nigerian cement maker by the Tanzanian government.

The Australian coal miner owns a 70% stake in Tancoal Energy, with the remaining 30% held by National Development Corp, a Tanzanian public investment firm.

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