Dangote says group will contest legal challenges to Kenyan refinery

Aliko Dangote says his business group is ready to contest legal challenges to its projects as a land dispute threatens to affect activities at the site of a planned refinery in Kenya. The President of Dangote Industries Limited spoke during a fireside chat at the Nairobi Securities Exchange. His comments followed a Kenyan court order concerning land earmarked for a 700,000-barrel-per-day refinery in Lamu.

The Malindi Environment and Land Court ordered that the prevailing status of the land be maintained until a hearing on October 14. The case was filed by 133 residents of Chandavai in Lamu County, who claim that the land is ancestral property on which their families have lived and farmed for generations. Dangote Group said the order had not halted the planned groundbreaking ceremony, although activities at the site could be affected because both parties were required not to undertake activities before the case was heard.

Dangote said he was confident the project would proceed. He referred to previous legal and administrative difficulties faced by the group elsewhere in Africa, including a Senegalese factory that was stopped for a year before the company obtained a Supreme Court judgment. The Lamu refinery is expected to cost between $15bn and $16bn and be completed by 2030.

Dangote said equipment had already been deployed to the site and estimated that more than 60,000 people would be needed during construction. He said the project would create opportunities for small and medium-sized businesses and attract other industries to the area. He also said Kenya had become an important part of the group’s African expansion strategy.

Dangote disclosed plans to list the refinery on the Nairobi Securities Exchange rather than the Nigerian Exchange. He said the group intended to widen ordinary African ownership of its businesses and was willing to reduce its stake in the refinery to 25 per cent if demand for shares increased. He said a planned $2.5bn fundraising comprised a $1bn private placement and a $1.5bn initial public offering.

After reported demand of $3.7bn for the private placement, the group created an additional $1.6bn offering to expand public ownership.