East Shewa Zone administration wants Dangote Cement Plc to outsource its pumice, sand and clay mines to youth groups or be responsible for “any problems” that may arise.

By Emele Onu and Nizar Manek (Bloomberg) |

Dangote Cement Plc, controlled by Africa’s richest man, Aliko Dangote, said it may shut its operations in Ethiopia if authorities in the central state of Oromia don’t reverse an order to cement makers to hand over control of some parts of their businesses to local young people.

Oromia state’s East Shewa Zone administration wants the Nigerian company to outsource its pumice, sand and clay mines to youth groups or be responsible for “any problems” that may arise, according to a letter from the authority to Dangote that was seen by Bloomberg and verified with a representative of East Shewa’s administration. The regional government sees the transfer of jobs in pumice production as a way to ease youth unemployment and quell unrest, according to the document.

Any mismanagement of mining infrastructure including buildings and excavators could “lead to total breakdown of our business,” Dangote Executive Director Edwin Devakumar said in an interview at the company’s headquarters in Lagos, Nigeria’s commercial hub, last week. The cement maker will write to the federal government this week to ask it to intervene and will consider shutting the plant in Mugher, about 90 kilometers (56 miles) north of Addis Ababa, as a “last option” if this fails, he said. The company listed Ethiopia as one of its three “key” markets, along with Nigeria and South Africa, in a presentation in May.

There’s “no intention to displace any investment,” so long as Dangote is “working by the laws and regulations in our region and country,” Tekele Uma, head of Oromia’s transport authority, said by phone. “If anyone’s complaining about Oromia regional state, we’re ready to talk with them. Any investment can come. Any investment can go.”

Motuma Mekassa, Ethiopia’s minister of mining, petroleum and natural gas, said by phone he wasn’t aware of an attempt by Dangote to reach his office.

Continue reading this story at Bloomberg
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