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Ethiopian cement production faces disruption over job plan

Published by , Assistant Editor
World Cement,

Bloomberg has reported that Ethiopian regional officials are demanding that Dangote Cement Plc, Derba MIDROC Cement Plc, and other foreign cement producers hand control of areas of their businesses to groups of unemployed youths.

According to a draft contract drawn up by Oromia state’s East Shewa Zone administration, these companies should allow the youths to run their pumice mines. Currently, the extraction of pumice is overseen by local bureaucrats, instead of Ethiopia’s central government.

“The youth have to get the advantage from the resource, and side-by-side the companies must get advantage from this resource,” Yohan Tesso, head of East Shewa’s urban employment creation and food security office, said by phone. “It’s a win-win.”

Oromia has 1.2 million unemployed youths. The demand is part of Prime Minister Hailemariam Desalegn’s administration’s attempts to reduce youth unemployment by creating 950 000 new jobs for young people, five months after a state of emergency was declared to deal with violent protests by Oromo communities. Dangote Cement was one of many businesses attacked during the unrest, which caused foreign business to slump.

The operations of Dangote and Derba were recently halted by the local administration amid discussions about the proposals, which came without warning.

Dangote CEO Onne van der Weijde has said the the disruptions have not forced Dangote to stop output. The company is discussing the proposal with Oromo officials and may be willing to sign a contract, provided that the same quantity and quality can be delivered without increasing costs.

Teweld Abay, a director of mineral marketing in Ethiopia’s federal mines ministry has said that the local administration has not communicated its plans to the ministry and had no right to ask cement companies to sign the contract.

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