Africa's cement boom signals next great shift in global energy use: Maguire
By Gavin Maguire
LITTLETON, Colorado, Sept 24 (Reuters) - Africa currently consumes under 5% of global energy supplies, and so is vastly overshadowed by other regions in assessments of current energy and pollution trends. But the region's aggressive cement plant construction plans may be about to change that.
African nations dominate the global pipeline for cement capacity under construction, accounting for 42% of all cement production capacity currently being built, data from Global Energy Monitor (GEM) shows.
That construction share compares to an 8% share of currently operational cement capacity, signifying aggressive growth in planned cement production across the continent.
But investments in cement capacity are about much more than construction raw materials. They are bets on urbanization, industrialization and broader regional economic development.
Before countries consume larger volumes of steel, chemicals and manufactured goods, they generally consume vast quantities of concrete to build housing, roads, ports, factories and power infrastructure.
In that sense, the cement pipeline acts as a leading indicator of Africa's broader energy needs, which look set to accelerate sharply if the expected construction boom tied to cement capacity plans emerges.
In turn, any such African industrialization boom would likely contrast with trends in other regions, where electrification and slowing heavy industrial output are projected to curb energy and emissions trends in much of the rest of the world.
LEANING IN
Africa currently has around 441 million metric tons of annual cement production capacity in operation, and around 43.3 million tons of annual capacity under construction, GEM data shows.
African nations have also announced plans for a further 23 million tons of annual capacity, which in combination would lift the region's total cement capacity by around 15% compared to current levels, to just over 507 million tons.
That overall increase in cement capacity far exceeds planned cement capacity additions in all other regions, and indicates that Africa's development roadmap looks set to be more raw materials-intensive than many other parts of the world.
Africa's heavy cement plans also indicate an equally steep climb in associated raw material and energy needs, as cement production is notoriously energy intensive and requires large volumes of coal, petroleum coke, natural gas and other fuels to ensure abundant output.
As these cement projects come on line, they will also increase demand for electricity as well as the infrastructure needed to import, distribute and store coal, gas and other fuels, and also to ship out the concrete supplies produced.
In other words, the plans to rapidly expand Africa's cement production footprint point to rising African demand for industrial energy, which in many African markets will likely be initially supplied by fossil fuels.
FRONTRUNNERS EGYPT AND NIGERIA
Among individual African nations, Egypt has the largest existing cement capacity footprint, of around 88 million tons per year.
Nigeria has the largest pipeline for cement capacity under construction (10 million tons), and ranks second only to India in terms of cement capacity currently being built.
Libya, Mali, Angola, Uganda, Mozambique and Cameroon also have cement construction pipelines that rank within the global top 20, highlighting that the growth swell is expected throughout the continent.
The scale of planned cement construction suggests Africa's urbanization will still require large quantities of physical materials, even if the continent adopts cleaner energy technologies more quickly than previous industrializing regions.
Indeed, the fact that 16 separate African nations are currently constructing new cement kilns seems to suggest Africa is on track to partly follow the same blueprints used by countries in Asia and elsewhere.
CLEANER CONCRETE?
One key distinction between Africa's cement plans and those followed previously by other regions is that African developers have the chance to underpin their cement facilities on the latest and most efficient components available.
Modern kilns are notably more efficient than those installed 10 or more years ago, and so should be able to churn out greater volumes of cement with fewer overall inputs.
Locally produced renewable energy — such as via rooftop solar installations — can also help run grinding and processing machines, and thereby reduce overall energy bills for producers.
Electric cement kilns are also becoming more widely available, and so offer a potential path to even further reductions in energy intensity within countries keen on limiting the carbon footprint of industrial operations.
However, cost considerations are likely to remain paramount in many African markets, which may slow adoption of more expensive emissions-reduction technologies such as carbon capture.
That means that energy and materials-intensive cement operations will likely be the norm across Africa, even as they deploy the latest available kilns and components while they set up shop.
All told, the cement projects scattered across Nigeria, Libya, Mali, Mozambique and elsewhere are not merely industrial investments. They represent early signs of where future energy demand growth may emerge.
As Africa urbanizes and industrializes, the continent could become one of the world's most important sources of incremental demand for electricity, transport fuels and industrial energy, forcing policymakers to balance rising living standards against rising emissions.
The opinions expressed here are those of the author, a columnist for Reuters.
Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. Follow ROI on LinkedIn and X.
And listen to the Morning Bid daily podcast on Apple, Spotify, or the Reuters app. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance 7 days a week.