Aliko Dangote, President of Dangote Industries Limited, has said his group will not abandon plans to construct a 700,000-barrels-per-day refinery in Lamu, Kenya, despite an ongoing legal dispute over the land earmarked for the project.
Dangote made the statement on Tuesday during a fireside chat at the Nairobi Securities Exchange, where he discussed the group’s investment plans and expansion across Africa.
His comments came after the Malindi Environment and Land Court ordered that the existing situation on the disputed land be maintained pending a hearing scheduled for October 14.
The case was brought by 133 residents of Chandavai community in Lamu County, who claim that the land selected for the refinery forms part of their ancestral heritage.
The Dangote Group had previously clarified that the court order did not prevent the groundbreaking ceremony planned for Wednesday, although activities at the project site could be affected while the legal dispute is being considered.
Reacting to the development, Dangote described legal challenges as part of doing business in different parts of Africa and said his group was prepared to defend its interests.
He recalled a previous experience in Senegal, where one of the group’s factories was shut for about a year before the company eventually secured a favourable judgment at the Supreme Court.
The proposed Lamu refinery is estimated to cost between $15 billion and $16 billion and is expected to be completed by 2030. The facility is planned to have a production capacity of 700,000 barrels per day, making it larger than the 650,000-barrels-per-day Dangote Refinery in Lagos.
Dangote said the Kenyan project is expected to require more than 60,000 workers and generate significant opportunities for small and medium-sized businesses.
He also disclosed that the refinery would be listed on the Nairobi Securities Exchange rather than the Nigerian Exchange, describing the move as part of efforts to strengthen African capital markets.
According to Dangote, Kenya is being treated as a home for the group’s investment, adding that the company views Africa as its wider investment base.
On ownership, the businessman said Dangote Industries was prepared to make the refinery more accessible to African investors by reducing its stake and allowing more people to own shares in the project.
He revealed that a private placement initially targeted at $1 billion attracted interest worth $3.7 billion. The group had also planned to raise $2.5 billion through a combination of private placement and an initial public offering.
Dangote said an additional $1.6 billion offering was created to accommodate the strong demand from investors and indicated that the group could sell even more shares if regulators approve it.
He added that Dangote Industries could eventually reduce its ownership of the refinery to as low as 20 or 25 percent, saying the objective was to give more Africans an opportunity to participate in the project.
Dangote further assured investors that the company would maintain strong corporate governance and said shareholders would have the authority to change the leadership if the company’s performance failed to meet expectations.
