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  • Business - Companies
  • Updated: June 16, 2020

Dangote Group, BUA Group Fight Dirty Over Mining Sites In Edo, As Rivalry Intensifies

Dangote Group, BUA Group Fight Dirty Over Mining Sites In Ed

The face-off between Dangote Group and BUA Group has not ended as both companies continue to lay claim to the ownership or rights to the same mining sites in Edo State. The two companies, owned by Nigerian billionaires, Aliko Dangote and Abdulsamad Rabiu, have been at loggerheads, with Dangote Group warning workers of BUA Group not to take a step into the mining premises.

Both Dangote Group and BUA Group stated that they got approval from the Ministry of Mines to operate on the mining sites located in Obu, Okpella, Edo State. But Dangote Group was said to have insisted that BUA Group got its approval from the Edo State Government which has no authority over mining license approval, while BUA says Dangote Group got approval for Kogi mining sites, not Edo.

What Dangote Group Had To Say

According to a report by Punch, the Group Executive Director, Dangote Group, Devakumar Edwin, said Dangote Group and AICO entered into an agreement to transfer the mining site, 2541ML from AICO to Dangote, in 2014. AICO later requested for approval to transfer from the Ministry of Mines.

The Ministry of Mines in 2016 informed Dangote Group of the approval of the transfer, making the Dangote-owned company the legal holder and owner of the Mining Lease No. 2541ML. The public and people working with BUA Group were warned not to enter the mine and interfere with the disputed mining leases.

While explaining the situation, Edwin said after the 2014 agreement between Dangote Group and AICO, “AICO thereafter applied to the Ministry of Mines for the approval of the transfer vide a Mining Lease Transfer Form dated July 11, 2014.

“In 2016, the Ministry of Mines wrote to the Dangote Group to convey the approval of the ministry for the transfer/assignment of 2541ML from AICO to Dangote Group with effect from February 3, 2016. Following the approval of the ministry, the Dangote Group became the legal holder and owner of the Mining Lease No. 2541ML. The 2541ML Certificate was thereafter endorsed to reflect the transfer from AICO to the Dangote Group.”

BUA Group Challenges Dangote Group's Claim

While BUA Group didn't state that the mining sites were transferred to it by AICO or any company, BUA Group, however, countered the claim that Dangote Group is a legal holder of the disputed mining sites in Edo State. According to BUA Group, the mining sites issued to Dangote Group is located in Kogi State, while the one in Edo State was approved for BUA Group.

The Rabiu-owned company stated that it is ludicrous for Dangote Group to claim a mining site that isn't within its approved license area, “The Dangote Group alleged that BUA claims to have been granted its mining licences from the governor of Edo State.

“In this regard, it is imperative to note that BUA has never contended that the governor of Edo State granted its licences, as the authority to grant a mining licence is within the sole jurisdiction of the Ministry of Mines and Steel Development through the Nigeria Mining Cadastre Office, which granted the BUA licenses.

“We wish to state clearly that the mining licence granted to Dangote Group explicitly states that the location is in Kogi State, Nigeria, while the BUA licences and mining sites respectively cover and are located in Obu, Okpella, Edo State, Nigeria. The Dangote Group’s attempt to lay claim to mining sites not within a geographical area covered by its licence is therefore ludicrous.”

Rivalry History Between Dangote Group And BUA Group

Both companies operate in almost the same markets, making Dangote Group and BUA Group rivals in cement, sugar, agriculture markets and other household food items. The founders, Dangote and Rabiu are among the wealthiest businessmen in Nigeria and Africa, with Dangote leading the African chart, while Rabiu is no.8 according to Forbes.

Both Dangote Cement and BUA Cement are the MTN and Airtel of the cement industry, and both companies are listed on the Nigerian Stock Exchange (NSE). They both recorded impressive performance for the first quarter of 2020. In the first three months of 2020, Dangote Cement recorded N249.1 billion against the N240.1 billion it earned in revenue for Q1 2019, while Gross Profit also increased slightly in Q1 2020, as the Group generated N144.8 billion as against the N140.6 billion it gross in profit for Q1 2019, AllNews reported.

BUA Cement Plc generated N175.5 billion in revenue in 2019, representing a substantial growth when compared to the corresponding period of 2018 when BUA Cement Plc generated N119 billion in revenue. Gross profit nearly doubled as BUA Cement Plc generated N82.4 billion for the year 2019, surpassing the N59 billion generated as gross profit in the corresponding period of 2018.

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