Latest News

Maguire: The cement boom in Africa signals the next big shift in global energy usage.

Africa consumes less than 5% of the global energy supply. It is therefore vastly outweighed by other regions when it comes to assessing current trends in energy and pollution. The aggressive plans to build cement plants in the region may change this.

Global Energy Monitor data shows that Africa dominates the global pipeline of cement production capacity being built.

This construction share is compared to a 8% share of the currently operating cement capacity. This indicates a 'rapid growth in planned production on the continent.

But cement investments are about a lot more than just construction materials. These bets are on urbanization, regional economic growth and industrialization.

Concrete is used to build roads, houses, factories, ports and other infrastructure before countries use more steel, chemicals or manufactured goods.

The cement pipeline is a good indicator of Africa's energy needs. These are expected to increase dramatically if the construction boom linked to the plans for cement capacity materializes.

The trend of energy consumption and emissions in the rest of world is expected to be curbed by electrification, and the slowing of heavy industrial production.

Leaning In

GEM data indicates that Africa has a cement production capacity of 441 million metric tons per year in operation and 43.3 millions tons per annum under construction.

African nations also announced plans to add 23 million tons to the current annual cement production capacity. This would increase the total capacity of the region by 15%, compared to its current level, bringing it to just under 507 million tonnes.

The overall increase in capacity for cement in Africa is far greater than planned additions to cement capacity in other regions. This indicates that Africa’s development plan looks set to be?more raw materials-intensive' than other parts of the globe.

Africa's heavy-duty cement plans indicate a similar steep rise in raw materials and energy requirements, since cement production is notoriously high energy-intensive and requires large quantities of coal, petroleum, coke, and natural gas to ensure ample output.

These cement projects will increase the demand for electricity, as well as infrastructure to import, store, and distribute coal, gas, and other fuels. They also need to ship out concrete produced.

The plans to expand Africa's cement manufacturing footprint are a response to the growing demand for industrial energy in Africa, which will initially be supplied by fossil fuels.

FRONTRUNNERS EGYPT & NIGERIA

Egypt, among African countries, has the largest cement production footprint of 88 million tonnes per year.

Nigeria is second to India for the amount of cement currently being produced.

Libya, Mali and Angola are also among the top 20 countries in the world for cement construction. This shows that growth is expected across the entire continent.

Even if Africa adopts cleaner energy technology more rapidly than other industrializing regions, the scale of planned construction of cement suggests that it will still need large quantities of materials to urbanize.

The fact that 16 African nations are building new cement kilns suggests that Africa is on the right track to follow some of the same blueprints as countries in Asia.

CLEANER CONCRETE?

The African cement plan is different from those of other regions because African developers can use the most modern and efficient components to build their?cement plants.

Modern kilns have a higher efficiency than those that were installed ten or more years ago. They should therefore be able to produce more cement using fewer inputs.

Locally produced renewable electricity -- such as rooftop solar installations -- may also be used to run milling and processing equipment, reducing energy costs for producers.

Electric cement kilns, which are becoming more widespread, offer the potential to further reduce energy intensity in countries that want to limit their industrial carbon footprint.

Cost considerations will likely remain paramount on many African markets. This may delay the adoption of expensive emissions-reduction techniques such as carbon sequestration.

This means that cement production in Africa will be energy- and material-intensive, even though they use the latest kilns available and the most advanced components.

Cement projects in Nigeria, Libya Mali, Mozambique, and other countries are not just industrial investments. These projects are early indicators of future growth in?energy demand.

Africa's urbanization and industrialization could make it one of the world's largest sources of demand for electricity, fuels for transport and industrial energy. This would force policymakers to find a balance between rising living standards and rising emissions.

These are the opinions of the columnist, an author for.

You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn, X and X.

Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets 7 days a weeks.

(source: Reuters)