Govt bans coal, gypsum imports to boost local mining sector

12Aug 2016
The Guardian Reporter
The Guardian
Govt bans coal, gypsum imports to boost local mining sector

THE Ministry of Energy and Minerals has banned imports of coal and gypsum to boost domestic production of the minerals, apparently inconveniencing local manufacturing factories that have been importing the raw materials for various reasons.

Dangote cement factory

Tanzania has an estimated total reserve of up to 10 billion tonnes of coal, making it one of the biggest sources of coal in Africa.

However, the $500 million Dangote cement factory in Mtwara region has reportedly been seeking coal imports from South Africa for power generation, on grounds that it is a cheaper option than buying the coal locally.

Similarly, otherlocal cement makers and factories manufacturing other goods in Tanzania have been importing gypsum despite the mineral being available in abundance within the country, citing supply side constraints.

“We don't want to hear that the price of imported coal from South Africa is cheaper than the price of coal from Mchuchuma to Mtwara," the deputy minister for energy and minerals, Dr Medard Kalemani, said in a statement.

Kalemanialso dismissed suggestions that imported coal is of superior quality to coal mined in Tanzania.

Coal provides around 90 per cent of the energy consumed by cement plants around the world, according to official estimates.

Dangote in 2014applied for a license to build a 75-megawatt, coal-fired plant that would power its cement factory in Mtwara region. Initially it was to power the plant from electricity on the grid.

Developing coal production is part of the government's broader energy strategy, which includes exploiting recent big gas finds and reducing reliance on hydro-power.

"Most of Tanzania's coal reserves remain unexploited…that is why we want more investors to set up small and large-scale coal mines," Kalemani said during a recent meeting with coal and gypsum industry stakeholders at the ministry's headquarters in Dar es Salaam.

"It is impossible that there’s more demand than production of coal…this is completely not true. We have enough coal reserves, we have prohibited coal imports, and that is the position of the government," the deputy minister added.

He also asserted that there is no need whatsoever to import gypsum because of the current over-capacity of production of the mineral locally.

According to Kalemani, Tanzania currently has 300,000 tonnes of gypsum, which he said is enough to meet the domestic demand for the product which is also used in cement production.

"There are a few domestic companies that produce gypsum and coal ... We encourage more Tanzanians to invest in this area to boost local production," he said.

Representatives of local factories have called on the government to set indicative prices for both coal and gypsum to ensure the minerals when produced locally are competitively-priced compared to imports.