The BUA Group And Dangote Group Fight Should Stop

The Nigeria government needs to weigh in and stop the escalation of value-destroying tendencies between BUA Group and Dangote Group. Alhaji Abdulsamad Rabiu, Chairman of BUA Group, and Alhaji Aliko Dangote, Chairman of Dangote Group, are two of Nigeria’s leading industrialists. Over the years, I have noticed that these people and their respective entities are taking competition to the ugly paths. The latest is about rights to limestone, a key raw material for cement production.

Today, a news organization, APO Group, which has been distributing contents for Dangote Group released this:

The management of BUA Group has been using armed militia, soldiers and policemen to mine marble and limestone in mining sites allocated to the Dangote Group, the Ministry of Mines and Steel Development  has alleged.

In a statement signed by the ministry’s Permanent Secretary, Mohammed Abass, and made available to our correspondent, the ministry said the company had been using a combination of armed militia, soldiers and policemen to obstruct the ministry’s team from executing the stop work order issued to the company in October.

The ministry’s statement was in response to an open letter to President Muhammadu Buhari by the company alleging that a minister was involved in sabotaging its operations.

Abass said that in the records of the Ministry of Mines and Steel Development and the Nigerian Mining Cadastre Office, the BUA Group did not have a mining lease over the contentious site (No. 2541ML) and was therefore engaged in illegal mining.

He stated, “The ministry stands by the stop work order issued to the BUA Group and signed by the Permanent Secretary dated 17th of October 2017.”

“The letter was issued after thorough investigation confirmed that the BUA Group was indeed engaging in illegal mining of marble/limestone at a mine pit located on geographical coordinates N070 21’ 47.4’ E0060 26’ 51.8’, while the run-of-mine is stockpiled at an area with geographical coordinates N070 21’ 48.4’; E0060 26’37.2’.”

“Clarification provided by the Mining Cadastre Office shows that the coordinates of the mine pit and RoM stockpile area fall wholly within the area of mining Lease No 2541ML belonging to Messrs Dangote Industries Limited.”

You do not need an oracle to know that the Dangote Group is behind the press release by  APO. Dangote Group and the ministry may have cogent points, but the way they have been handling this matter is not necessarily good for Nigeria. BUA Group, according to Reuters, feels that Dangote Group is trying to bully it to “relinquish mining rights in a limestone field as part of a bid to monopolise the cement market”. It rightfully asked the Nigerian president to intervene. Mr. President is yet to comment.

Nigerian conglomerate BUA group has accused Dangote group of trying to force it to relinquish mining rights in a limestone field as part of a bid to monopolise the cement market and asked the president to intervene, BUA’s chairman said

[…]

“Our cement business has of late come under intense, consistent attacks … as the minister, Dangote group and their cohorts have sought to employ instruments of state … to forcefully wrest control of our mining areas,” BUA said in a letter to President Muhammadu Buhari and seen by Reuters on Wednesday.

Rabiu called on Buhari to investigate. He said the company was under pressure to relinquish its mining area to Dangote.

This Goes Beyond Limestone

Forget what is happening today, BUA Group and Dangote Group have been fighting for the soul of Nigeria through cement, for years. In 2015, BUA Group wrote an open letter against the Nigerian Government for providing favorable foreign exchange to Dangote Group for its Congo business. The open letter which was published in many print newspapers attacked the heart of Dangote’s strategy which is pushing governments to offer concessions before investments. But something was different: Congo was not Nigeria and it was immoral to subsidize the investment through the special forex offered by the Nigerian central bank. BUA Group reasoned that Nigeria should not be paying conglomerate tax for investments in Congo. The letter was the first time we saw the level of animosity between these billionaires.

Buhari Needs to Step In

The Dangote group controls about 70% of Nigeria’s cement market in terms of output. BUA is an emerging player. The Cement market in Nigeria is littered with many broken promises: only Dangote Cement has flourished. The core of BUA accusation here is that the market leader wants to bully it to relinquish its source of raw material. If that happens, Nigeria will lose. Yet, Dangote Group has put a claim, maintaining that the asset is under its rights.

The government, especially the President should step in and see how to resolve this issue. This has gone beyond what a minister can do, since BUA does not even believe anything the ministry of Mines and Steel Development is saying, having noted that the ministry was working for its competitor.

They need to resolve this and get back to growing their enterprises. And President Buhari has a role to play here, urgently. This also explains why our mining rights must be digitized. Doing so will eliminate issues where two billionaires are fighting for the same thing, claiming  legal rights to the same property.

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