Africa’s richest man Aliko Dangote is still keen on investing hundreds of millions of dollars in Zimbabwe’s cement industry, but securing limestone deposits to support the plant remains a sticking point, Government sources revealed yesterday.
He is also keen on investing in a 600 megawatt thermal power station that also demands huge coal supply.
Dangote, whose net worth is $12,3 billion according to Bloomberg Billionaire Index, visited the country in September 2015 where he expressed willingness to immediately invest $400 million in cement manufacturing plant, but the deal is yet to come to fruition.
A Government delegation went to Nigeria to follow up on the investment deals in April this year and reportedly engaged Dangote and his team to establish his position on Zimbabwe since the time he visited the country.
The Nigerian businessman reportedly spelled out a set of proposals to the Zimbabwe delegation, led by officials from the office of the President and Cabinet, which he reportedly wanted guarantees provided to enable him to put his investments into this country.
While doomsayers had already dismissed the envisaged deal, The Business Weekly can exclusively reveal that the deal is still alive.
Information gathered is that the sticking point between Government and Dangote is the availing of sizeable limestone claims, which is key in the production of cement.
Representatives of the Nigerian billionaire, The Business Weekly is authoritatively informed, have identified “particular” limestone deposits that they have told Government there are the type that can back their massive investment.
Government, however, is in a spot of bother as the claims that have enticed the Dangote team are held by another private player who is refusing to let them go.
Sources said the limestone claims Dangote had identified were already held by some locals who are now keen to sell at a premium.
“There are issues he is raising pertaining to resources, especially limestone,” said one official close to the developments. “So essentially, the Ministry of Mines is the one that can make the deal sail through.Dangote is yet to identify where exactly he will mine the limestone. The areas with limestone deposits that Dangote wanted were already taken by other people who now want to maximise and sell them to him at a premium.”
“Dangote doesn’t want to pay a premium, stalling the deal in the process. He wants limestone deposits of good quality, which have a longer mine life. So that is the outstanding issue. Ask the Zimbabwe Geographical Survey director (Temba) Hawadi if they have found limestone and coal deposits for Dangote and you can get a good story there.”
Mines and Mining Development Minister Walter Chidhakwa, confirmed the development saying the group should consider forging joint ventures with holders of the deposits.
“As Government, we have directed them to limestone claims, but if you go anywhere in Zimbabwe the land belongs to someone so they should go and negotiate joint ventures,” Minister Chidhakwa said.
“We are still waiting for them,” Minister Chidhakwa added, apparently indicating Government is willing to do business with Dangote.
The Minister said the company should, however, comply with the country’s laws including the Indigenisation and Economic Empowerment Act. The country’s demand for cement for the year is estimated at 1,17 million tonnes.
Zimbabwe currently has four cement producers namely, Livetouch Investments, PPC Zimbabwe, Lafarge Zimbabwe and Sino-Zimbabwe with combined annual capacity of about 2,7 million tonnes.