Displaying items by tag: Government
Police and protestors clash at ACC Masturi cement plant hearing
04 November 2022India: A violent disturbance brought an end to a public hearing over ACC's plans to establish a new integrated cement plant in Masturi, Chhattisgarh, on 3 November 2022. Police reportedly used 'mild force' to subdue protestors who claimed that ACC has acted illegally. The Free Press Journal has reported that land recorded by ACC as 'barren' in document submissions is allegedly used by residents for cultivation of rice and other crops.
Limestone mining has already commenced at the Masturi site.
Dalmia Bharat increases income as earnings drop in first half of 2023 financial year
03 November 2022India: Dalmia Bharat sold 12Mt of cement during the first half of its 2023 financial year, up by 20% year-on-year from 10Mt in the first half of the 2022 financial year. Its income was US$757m, up by 21% year-on-year from US$624m. Meanwhile, the company's earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 28% to US$116m from US$161m. The company noted the growth effects of 'fuel price corrections' during the second quarter of 2022, which it expects to increase its profitability during the second half of year.
Managing director and CEO Punit Dalmia said “We are pleased with the performance of the first half of this year despite the intense inflationary environment, and are confident that we will be among the best in the industry, leaving the bad times behind. While the geopolitical turmoil continues, we are confident in the resilience of the Indian economy, which is further cementing its position at the centre of global growth and consumption.” Dalmia continued “In view of the government's continued momentum in the infrastructure sector, driven by the revitalisation of the housing sector, we expect the demand for cement to grow rapidly. Looking ahead, we will remain focused on our capacity expansion progress.”
Dalmia Bharat's 14 integrated cement and grinding plants span 10 Indian states and have a capacity of 37Mt/yr, India's fourth largest.
Slashing cement's CO2 emissions Down Under
02 November 2022In Australia and New Zealand, four producers operate a total of six integrated cement plants, with another 13 grinding plants situated in Australia. This relatively small regional cement industry has been on a decades-long trajectory towards ever-greater sustainability – hastened by some notable developments in recent weeks.
Oceania is among the regions most exposed to the impacts of climate change. In Australia, which ranked 16th on the GermanWatch Global Climate Risk Index 2021, destructive changes are already playing out in diverse ways.1 Boral reported 'significant disruption' to its operations in New South Wales and southeast Queensland due to wet weather earlier in 2022. This time, the operational impact was US$17.1m; in future, such events are expected to come more often and at a higher cost.
Both the Australian cement industry and the sole New Zealand cement producer, Golden Bay Cement, have strategies aimed at restricting climate change to below the 2° scenario. Golden Bay Cement, which reduced its total CO2 emissions by 12% over the four-year period between its 2018 and 2022 financial years, aims to achieve a 30% reduction by 2030 from the same baseline. The Australian Cement Industry Federation (CIF)'s 2050 net zero cement and concrete production roadmap consists of the following pathways: alternative cements – 7%; green hydrogen and alternative fuels substitution – 6%; carbon capture – 33%; renewable energy, transport and construction innovations – 35% and alternative concretes – 13%, with the remaining 6% accounted for by the recarbonation of set concrete.
Australia produces 5.2Mt/yr of clinker, with specific CO2 emissions of 791kg/t of clinker, 4% below the global average of 824kg/t.2 Calcination generates 55% of cement’s CO2 emissions in the country, and fuel combustion 26%. Of the remainder, electricity (comprising 21% renewables) accounted for 12%, and distribution 7%. Australian cement production has a clinker factor of 84%, which the industry aims to reduce to 70% by 2030 and 60% by 2050. In New Zealand, Golden Bay Cement's main cement, EverSure general-purpose cement, generates CO2 at 732kg/t of product.3 It has a clinker factor of 91%, and also contains 4% gypsum and 5% added limestone.
Alternative raw materials
Currently, Australian cement grinding mills process 3.3Mt/yr of fly ash and ground granulated blast furnace slag (GGBFS). In Southern Australia, Hallett Group plans to commission its upcoming US$13.4m Port Augusta slag cement grinding plant in 2023. The plant will use local GGBFS from refineries in nearby Port Pirie and Whyalla, and fly ash from the site of the former Port Augusta power plant, as well as being 100% renewably powered. Upon commissioning, the facility will eliminate regional CO2 emissions of 300,000t/yr, subsequently rising to 1Mt/yr following planned expansions. Elsewhere, an Australian importer holds an exclusive licencing agreement for UK-based Innovative Ash Solutions' novel air pollution control residue (APCR)-based supplementary cementitious material, an alternative to pulverised fly ash (PFA), while Australian Graphene producer First Graphene is involved in a UK project to develop reduced-CO2 graphene-enhanced cement.
Golden Bay Cement is investigating the introduction of New Zealand's abundant volcanic ash in its cement production.
Fuels and more
Alternative fuel (AF) substitution in Australian cement production surpassed 18% in 2020, and is set to rise to 30% by 2030 and 50% by 2050, or 60% including 10% green hydrogen. In its recent report on Australian cement industry decarbonisation, the German Cement Works Association (VDZ) noted the difficulty that Australia's cement plants face in competing against landfill sites for waste streams. It described current policy as inadequate to incentivise AF use.
Cement producer Adbri is among eight members of an all-Australian consortium currently building a green hydrogen plant at AGL Energy’s Torrens Island gas-fired power plant in South Australia.
Across the Tasman Sea, Golden Bay Cement expects to attain a 60% AF substitution rate through on-going developments in its use of waste tyres and construction wood waste at its Portland cement plant in Northland. The producer will launch its new EcoSure reduced-CO2 (699kg/t) general-purpose cement in November 2022. In developing EcoSure cement, it co-processed 80,000t of waste, including 3m waste tyres. The company says that this has helped in its efforts to manage its costs amid high coal prices.
Carbon capture
As the largest single contributor in Australia's cement decarbonisation pathway, carbon capture is now beginning to realise its potential. Boral and carbon capture specialist Calix are due to complete a feasibility study for a commercial-scale carbon capture pilot at the Berrima, New South Wales, cement plant in June 2023.
At Cement Australia's Gladstone, Queensland, cement plant, carbon capture is set to combine with green hydrocarbon production in a US$150m circular carbon methanol production facility supplied by Mitsubishi Gas Chemical Company. From its commissioning in mid-2028, the installation will use the Gladstone plant's captured CO2 emissions and locally sourced green hydrogen to produce 100,000t/yr of methanol.
More Australian cement plant carbon capture installations may be in the offing. Heidelberg Materials, joint parent company of Cement Australia, obtained an indefinite global licence to Calix's LEILAC technology on 28 October 2022. The Germany-based group said that the method offers effective capture with minimal operational impact.
Cement Australia said “The Gladstone region is the ideal location for growing a diverse green hydrogen sector, with abundant renewable energy sources, existing infrastructure, including port facilities, and a highly skilled workforce." It added "The green hydrogen economy is a priority for the Queensland government under the Queensland Hydrogen Industry Strategy.”
Logistics
Australian and New Zealand cement facilities' remoteness makes logistics an important area of CO2 emissions reduction. In Australia, cement production uses a 60:40 mix of Australian and imported clinker, while imported cement accounts for 5 – 10% of local cement sales of 11.7Mt/yr.
Fremantle Ports recently broke ground on construction of its US$35.1m Kwinana, Western Australia, clinker terminal. It will supply clinker to grinding plants in the state from its commissioning in 2024. Besides increasing the speed and safety of cement production, the state government said that the facility presents 'very significant environmental benefits.'
Conclusion
Antipodean cement production is undergoing a sustainability transformation, characterised by international collaboration and alliances across industries. The current structure of industrial and energy policy makes it an uphill journey, but for Australia and New Zealand's innovating cement industries, clear goals are in sight and ever nearer within reach.
References
1. Eckstein, Künzel and Schäfer, 'Global Climate Risk Index 2021,' 25 January 2021, https://www.germanwatch.org/en/19777
2. VDZ, 'Decarbonisation Pathways for the Australian Cement and Concrete Sector,' November 2021, https://cement.org.au/wp-content/uploads/2021/11/Full_Report_Decarbonisation_Pathways_web_single_page.pdf
3. Golden Bay Cement, 'Environmental Product Declaration,' 12 May 2019, https://www.goldenbay.co.nz/assets/Uploads/d310c4f72a/GoldenBayCement_EPD_2019_HighRes.pdf
US: Martin Marietta Materials recorded revenues of US$4.68bn throughout the first nine months of 2022, up by 20% year-on-year from US$3.92bn. Cement sales contributed US$455m, 9.7% of total revenues, up by 27% from US$358m. Cost of revenues rose by 4% for the group, to US$3.62bn from US$2.92bn. Nonetheless, Martin Marietta Materials successfully recorded nine-month net earnings growth of 25% year-on-year, to US$638m from US$546m.
Chair and CEO Ward Nye said that double-digit price growth drove the company's record profitability. He said "Importantly, we expect a return to expanding margins in the fourth quarter of 2022, as the compounding effect of multiple pricing actions throughout the year offsets continued inflationary pressure and a slowdown in single-family residential construction. Martin Marietta's strategic coast-to-coast footprint is well positioned for long-term growth, driven by favourable population migration trends, housing shortages in our markets and a long-term federal highway bill complemented by healthy Department of Transportation budgets in the company's key states. Near-term, we expect affordability-driven headwinds in the single-family residential end market will be offset by a significant acceleration in public infrastructure investment and continued strength in large-scale energy, domestic manufacturing and multi-family residential projects."
Obstacles for Obajana
26 October 2022Dangote Cement’s Obajana plant has been the focus of an argument between the cement producer and the Kogi State Government (KSG) in recent weeks. The integrated plant was forced to close in early October 2022 and then reopened in mid-October 2022 following an order by the Federal Government. The dispute then entered a legal phase, with the state government taking Dangote Cement to court. The case is ongoing.
The current stage of the disagreement dates back to late August 2022 when the Kogi State House of Assembly reportedly set up a committee to investigate the shares that the state owned in Dangote Cement and other organisations as part of an initiative to examine tax revenue from mining companies. By the end of September 2022 this had turned into a discussion about how exactly Dangote Cement had originally acquired its shares in the Obajana cement plant in Kogi state as well as how much tax it was paying. In early October 2022 the local government ordered the closure of the plant. Events then turned nasty as local vigilantes attacked the plant and hurt some of its staff. In the general unrest that followed the Kogi State House of Assembly was destroyed in a fire. The plant partially reopened fairly quickly and then fully once the Federal Government intervened. Legal action was then started at the Kogi High Court.
Unusually for this kind of disagreement both sides have published detailed information on their respective arguments. Dangote Cement’s parent company Dangote Industries outlined how it originally came to build and own the Obajana cement plant. In short, it signed deals in 2002 and 2003 to buy a 100% stake in Obajana Cement from the KSG, before the plant was built, with the proviso that the state could later buy a 5% share within five years. Dangote Industries then independently financed and built the plant and Obajana Cement later became Dangote Cement. Crucially, according to Dangote Industries, KSG never bought its 5% share. On the opposing side, the KSG has published what it says is the original contract and annexes that it signed with Dangote Industries. This agrees with some of what Dangote Industries has said, especially the part about the option to buy a 5% stake within five years. However, according to reports in the local press, KSG is attempting to persuade the judiciary to cancel the original contract on the grounds that it lacked clear consideration of what should pass from the state to Dangote Industries in return for giving the latter full ownership of Obajana Cement. In other words, the KSG is querying whether the contract is valid given that it received apparently nothing for giving a company away.
The Obajana cement plant was later built and it became operational in 2007. Today it is the largest cement plant in Nigeria and one of the largest in Africa. It produces around a third of the country’s cement and this is why its closure earlier in October 2022 became a national issue. Since the early 2000s Dangote Cement has become the biggest cement producer in Sub-Saharan Africa. It is both a success story for the region and the world.
There may be issues with the perceived or actual contribution Dangote Cement is making locally in Kogi State. These are the kinds of issues that both companies and governments contend with continually. Companies consider where it is cost effective to place investments and governments try to entice them. It is possible that the KSG gave Obajana Cement to Dangote Industries in what it retrospectively considers is a poor deal. It is also possible that Dangote Cement has not paid sufficient tax, although it strongly denies this, and the KSG seems to have moved on from this line of attack. What may be the bigger issue here is if Dangote Cement is perceived to have not paid its dues in Kogi State. However, it seems odd that the KSG would suddenly decide to go after Dangote Industries nearly 20 years after agreeing to the deal. It also seems strange that no lawyer for either party flagged the consideration issue at the time. Thankfully calmness has now prevailed in the state and the cement plant remains open. It is for the courts to decide the validity of the original contract between Dangote Industries and the KSG.
Udayapur Cement seeks US$3.82m government loan
24 October 2022Nepal: Udayapur Cement has urged the Nepalese government's Ministry of Finance to process its application for a loan of US$3.82m. The Kathmandu Post newspaper has reported that the producer plans to invest in an upgrade to its 800t/day-capacity Gaighat cement plant in Province No.1. The plant is reportedly unable to meet its capacity due to frequent issues with its 33-year-old equipment. The producer hopes that an upgrade will increase the plant's production capacity by 41% to 2.5m bags/yr. It also expects its expenditure on coal to fall by 25% as a result.
Director general Gopi Neupane noted the Gaighat cement plant's access to high quality limestone not available elsewhere in the country. He said "We will turn the factory into a profit-making enterprise if the additional investment is provided. We have huge scope for exporting cement to Uttar Pradesh and Bihar (in India)."
Kogi State government takes Dangote Industries to court
21 October 2022Nigeria: The government of Kogi State has filed a lawsuit against Dangote Cement's parent company Dangote Industries. The state government claims no payment was received for Dangote Cement's acquisition of the Obajana cement plant upon its privatisation in 2002, according to the Advocate newspaper. If the legal case is successful it could void the cement producer’s contract with the state government.
The National Security Council ordered the reopening of the Obajana cement plant in the national interest on 14 October 2022, following its closure by order of the Kogi State Assembly.
Philippines: The Tariff Commission has reversed a decision recommending that the government implement anti-dumping duties on imports of cement from Vietnam. Việt Nam News has reported that the commission withdrew the recommendation after the Philippine government's Department of Trade and Industry ruled that imports from Vietnam do not have a harmful impact on the domestic cement industry.
Nigeria: The government of Kogi State ordered Dangote Cement to shut down its Obajana cement plant within 48 hours on 13 October 2022. Kogi State Governor Yahaya Bello also ordered the release of impounded Dangote Cement trucks across the state.
Bello thanked Kogi residents for their “resoluteness in the ownership impasse between Dangote Group and the state government.” He added, "While the state government recognises the right of the citizens to peaceful protest, as we witnessed across the state yesterday, we urge people to remain civil and law abiding and to give room for constitutionalism. Breakdown of law and order will not be in the interest of anyone."
Lorry drivers blocked the Abuja - Lokoja road in protest against the closure on 14 October 2022, according to the Advocate newspaper. Meanwhile, a gang has raided the plant, destroying property and shot firearms at the 27 employees who remained on site.
Philippines: The Tariff Commission (TC) has ordered that new duties be applied to imported Vietnamese cement for a five-year period up to 2027. The Department of Trade and Industry concluded a dumping investigation into Vietnamese cement exports to the Philippines in mid-October 2022, according to the Manila Bulletin newspaper. It found that imports of ordinary Portland cement (OPC) and blended cement from Vietnam were not injurious to the domestic cement sector at present. However, it also found the threat of material injury to be 'imminent.' This is due to Vietnam's 'substantial' cement overcapacity, which may enable it to rapidly increase its exports. The conclusion provided the basis for the TC's latest order.
Any new duty will replace provisional 2.7 - 32% duties introduced in December 2021. Previously, strong competition reportedly prevented the measures from causing price rises. Commentators now predict that the TC's proposed measures will result in a rise in prices.