Ethiopia to sign Agreement with Djibouti to use Port for Coal Import

(HornTrade) – Ethiopia is to sign an agreement with Djibouti next month for the use of its Port to ship in and unload coal that the Ethiopian Petroleum Enterprise (EPE) plans to import to be used as fuel for cement factories.

Yigzaw Mekonnen, director general of EPE and Mekonnen Abera, head of market research and business promotion of the Ethiopian Shipping & Transit Services Enterprise, (EMTSE) were in Djibouti last week discussing the terms of the deal with Aboubaker Omar Hadi, the chairman of the Port.

This comes three weeks after Mekonnen Manyazewal, minister of industry (MoI), wrote a letter requesting Ethiopian Maritime & Transit Service Enterprise (EMTSE) and Ethiopian Shipping Lines (ESL) to prepare transportation and port facilities for the unloading of coal to be imported by the EPE.

The two countries have agreed on the general terms of import and are drafting the contract to be signed in November, according to Mekonnen.

It has been a few months since the EPE has been looking for alternative sources of fuel to replace the Heavy Furnace Oil currently in use. Their initial plan to use Pet Coke was unsuccessful due to supply and cost issues.

A task force composed of ESL, MTSE and five major cement factories, along with MoI, have considered the possible import of coal from other countries based on geographical proximity and institutions capable of importing at competitive prices. Based on their assessments, South Africa has been found to be a suitable destination to import from, considering South Africa has coal with a caloric degree of 6,300, which is suitable for cement factories.

With intentions and plans to have cement factories start using coal as soon as possible, institutions have been scrambling, trying to accomplish specific tasks assigned to them, within three months time.

The MoI has been collecting information from cement factories on how much cement is demanded in a year. Accordingly, it has found that, with the exception of Mugher and East Cement factories, the remaining factories in operation require 896,500tn of cement for this year.

Out of the twelve operational cement factories, the highest amount of coal is consumed by Messebo and Derba Midroc which have the capacity of producing 2.1 and 2.3 million tonnes of cement on a yearly basis, consuming 22,000tn of coal each.

However, as some of the cement factories have coal in stock from previous imports, the MoI is assessing these matters in order to determine how much coal to import. The EPE, which has been tasked with preparing the necessary human resources and budget for the import of coal, is also to look for companies to supply the product from South Africa up on floating an international tender.

The task force has discovered, through assessments, that it will cost 207.30 dollars for one tonne of coal to be transported from South Africa.

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