Displaying items by tag: Coal

Nigeria: Dangote Group has invested US$250m in a coal-based power plant in its effort to provide an alternative source of power for is plants across the country to reduce the cost and difficulty accessing electricity.

Dangote Cement's Group CEO, Devakumar Edwin, said that the initiative will help the group in running its businesses in all parts of the country. He noted that the group has installed a 54MW coal power plant in Gboko, Benue State and is currently working towards installations at Ibeshe in Ogun state and Obajana in Kogi State. Edwin, who said that the group was currently importing coal from South Africa, revealed that it has started exploring coal opportunities in Nigeria, especially in Enugu State. It has also established a separate division for coal exploration.

Edwin noted that inadequate power supply due to Nigeria's low supply of gas has affected Dangote's cement production, while the cost aspect has also impacted on the economy and increased cost for consumers.

"In this country, the major issue is power," said Edwin. "Any economy will climb to double digits, once there is power at the right price. With affordable power people will produce products locally, will gravitate to the private sector, leading to the creation of a middle class and more employment in the country."

Egypt: Sinai Cement Company (SCC) has contracted Danish engineering company FLSmidth to provide the equipment for it to start using coal. SCC added that it would also partner with local contractors and suppliers to equip the factory to use coal as an alternative fuel source to natural gas and Mazut fuel oil.

The industrial sector, which is represented by the Federation of Egyptian Industries, has shown signs of accepting recent increases in automotive petroleum products prices, including fuel, diesel and natural gas. The sector said that it would bear the cost of the energy price increases taking into account the current economic situation 'that doesn't allow for any alternative.'

Following the fuel price hike announcement, the government has raised gas prices for cement plants to US$8 per million British Thermal Units (BTUs) compared to US$6 previously. The price of fuel oil increased from US$209/t to US$315/t.

Despite the Ministry of Environment's opposition, the interim government approved the industrial use of coal as an alternative energy source in April 2014. The move came to address the energy shortage, pending the endorsement of the Environmental Impact Assessment. After issuing the decision, the government said that it would impose a tax on coal usage, while also amending laws and tightening penalties for violating environmental standards and regulations.

Minister of Industry Mounir Fakhry Abdel Nour said that importing coal would not start until the environmental standards and regulations for the industrial use of coal have been finalised and ratified. However, cement plants have already started taking steps towards this. In a bid to shift to coal usage, the Arabian Cement Company commenced testing coal in June 2014 in thermal power generation. It aims to shift to this energy source for 50% of its needs. Suez Cement also recently announced plans to invest US$14.9m to convert two of its four cement plants to use coal. The conversion process for each plant will cost around US$21m.

Laos: The Lao government has halted coal exports to protect cement and other key national industries, according to the Lao Ministry of Energy and Mines. The country has six cement plants, which import a large volume of high-price coal, the ministry reported.

According to local cement producers the price of locally produced cement is currently higher than that in Thailand. This poses a challenge for the industry when the Association of Southeast Asian Nations (ASEAN) Economic Community is established in 2015. Hence they are supporting a legal means to secure an adequate supply of coal mined inside the country.

Egypt: South Valley Cement (SVCC) has said that the investments needed to use coal as an energy source will accost US$19.8m. Subsequently, the company is preparing other energy options.

SVCC said that it would be 'indifferent' if the government decided not to follow through with the coal usage plan, as it could rely on mazut, a low quality fuel oil, in addition to gas, in order to produce cement. The company added that the availability and sustainability of energy sources remains the biggest challenge it faces.

SVCC company officials said that the application of alternative energy sources suggested by the government will take at least 12 months. "The use of coal will allow the company to reach 100% of its production capacity," SVCC's Samar Abd Al-Gawad said. She added that despite the fact that the use of agricultural wastes is 'great,' its percentage in the energy mixture cannot exceed 15 - 20%. "The challenge that the company faces in the use of agricultural wastes is that the market is not consistent and the products that are used as wastes, such as the linen seeds and corn cobs, are seasonal."

SVCC has applied for licences for coal usage and agriculture waste and is awaiting approval from the Ministry of Environmental Affairs. Investing in the usage of agricultural wastes could cost around US$283,000.

The company is seeking to double its production capacity and is currently constructing two new cement plants, which are expected to be complete within 17 months. "The first plant will increase the production capacity by 1.5Mt/yr," said SVCC's consultant Ashraf Salman. "When the company receives its coal license it will increase its production to reach 3Mt/yr."

The company plans to increase its production capacity to reach 3.75Mt/yr by 2017. "The expansion will not only be in increasing the production lines but in looking for acquisition deals of parts or full shares of other cement companies," Salman added. SVCC operated at 70% of its full production capacity in 2013 'due to the energy shortages and the applied curfew.' The company exported around 80,000t of cement during the year.

Egypt's cement producers have taken their fight to use coal to the opposition in recent weeks. Producers like Suez Cement and Titan have started pushing the benefits of using coal including its place as an international mainstay and highlighting the potential savings for the state.

In March 2014 the Minister of Trade and Industry Mounir Abdel Nour announced that cement companies could start using coal from September 2014. However, with pressure from environmental activists and even the Minister of Environment voicing disapproval for coal this seems to be a long way off. Fuel issues continue to bedevil Egyptian cement producers as reports emerged this week that gas supplies to 10 cement plants were cut. The plants, which represent 70% of the country's production base, have been forced to close temporarily. Egypt is one of the largest non-OPEC (Organisation of the Petroleum Exporting Countries) oil producers in Africa and the second largest dry natural gas producer on the continent.

The Egyptian government has been planning a reduction in the use of natural gas by industry. Yet the scale of the reduction has shifted. At first the Ministry of Petroleum intended to reduce supplies to cement plants by 35% in January and February 2014. Reportedly the price of cement then shot up by 30% in March 2014 to offset the rise in energy prices. Then the gas was cut completely, leading to the shutdowns.

In response Egyptian cement producers are investing in converting to using coal. This week Suez Cement announced a planned investment of US$40m to convert two of its four plants to use coal instead of natural gas subject to approval from the Ministry of Environment. Back in November 2013 Suez Cement announced similar plans to spend US$72.5m on converting its plants for coal. Similarly, Lafarge's preparations to use petcoke were also delayed by the ministry in February 2014.

Users of Egypt's gas supplies are caught between the reform of energy subsidies, a shortage in gas supplies and an increase in local demand. Industrial users like cement plants are stuck in a queue behind export markets and power plants. In addition international events such as the political instability in Ukraine might potentially rock the Egyptian gas market if Russian supplies were affected. The European markets would then start scrambling to secure their gas from other places such as Egypt.

In this situation, moving to the use of imported coal makes sense for cement producers. Yet groups like the 'Egyptians Against Coal' campaign argue that the issue is also about Egypt's sovereignty over its energy sources, not just pollution. Despite the optimism of the activists it seems unlikely that they can resist market pressures for long, especially with producers such as Suez Cement and the Arabian Cement Company announcing plans for increased alternative fuels substitution rates alongside their bigger plans for coal. Whether this is more than a sop remains to be seen.

Once dubbed 'King Coal' for its leading place in British industry before the second half of the 20th Century, coal is looking likely to take the crown as the fuel of choice in the Egyptian cement industry. How long it retains its crown though depends on the on-going competition between coal and gas use around the world.

Egypt: Suez Cement Company has announced plans to invest US$42.8m to convert two out of its four plants to use coal instead of natural gas following a controversial government decision to import coal as a means of addressing power shortages.

The conversion process for each plant will cost around US$21.4m, according to Mohammed Shanan, Suez Cement's business development director. Another company source estimated the overhaul will take between 6 - 8 months. The company is still waiting for final approval from the Ministry of Environment to use coal in the production of cement.

Suez Cement's production fell by 50% during the first quarter of 2014 as a result of fuel shortages, which has led to a 50% decline in sales.

The Egyptian Cabinet approved the use of coal for power generation in April 2014, despite the disapproval of Minister of Environment Laila Iskandar. The Egyptian government had cut natural gas supply to plants in an attempt to conserve energy resources.

A number of non-governmental organisations, including the Egyptian Initiative for Personal Rights, condemned the decision to use coal in a statement in April 2014, forecasting that it will have 'devastating consequences on health and the economy.' The Egyptian Centre for Economic and Social Rights, with support from the Doctor's Syndicate, has filed a lawsuit against interim Prime Minister Ibrahim Mehleb, President Adly Mansour and the ministers of trade, petroleum, electricity and environmental affairs in an attempt to block the use of coal in Egypt.

Egypt: Omar A Mohanna, Chairman of Suez Cement, has announced that the company intends to alter its energy mix to use 20% of its energy from waste recycling and 80% from coal during 2014. He added that the Ministry of Environmental affairs has not announced its position on the use of coal, according to AlAhram News. Previous energy supply shortages have reduced production at Suez Cement to 50%.

In related news, the CEO of the Misr Beni Suef Cement Company revealed that his company has received an official letter from the Egyptian government informing the company that the natural gas supply to their facilities will be completely cut in May 2014. The letter added that the government will supply enough Mazut to the company to operate one production line.

Zuari Cement's ground breaking of a new port-side packing terminal in Kochi, Kerala is the latest Indian cement news story with an eye on the sea. The Italcementi subsidiary's terminal won't be open until 2015 but the move shows that Indian producers are starting to tackle industry over-capacity through shipping lanes.

The Italcementi subsidiary holds two integrated cement plants and a grinding plant in Andhra Padesh and Tamil Nadu, two of India's biggest cement-producing states. In 2013 Italcementi reported that cement consumption fell for the first time in 10 years. Although Italcementi's cement and clinker sales rose by 1.6% in India in 2013, its revenue fell by 14% to Euro214m. Profit indicators like earnings before interest, taxes, depreciation, and amortisation (EBITDA) also fell. Targeting Kerala, one of the country's smallest cement producing states (0.6Mt/yr in 2013), makes sense.

Zuari Cement isn't the only Indian cement producer with its eye on shipping or on Kerala. At the end of March 2014, Gujarat producer Sanghi Industries announced plans to invest US$25m in ships and sea terminals. It plans to acquire six vessels in the next five years. It is also in the process of setting up terminals at Navlakhi port in Gujarat and at Mumbai port in Maharashtra.

Sanghi has stated that its aims are to find new markets, reduce fuel costs and increase its distribution networks. In an interview with Alok Sanghi, the director of Sanghi Cement, for a forthcoming issue of Global Cement Magazine, Sanghi revealed that Kerala is one of the four markets the producer focuses on within India (alongside Gujarat, Rajasthan and Maharashtra).

Neighbouring Pakistan is no stranger to exporting its cement around the world. Frequent complaints from east and south African press and cement producers attest to this. However, this week's story about plans to build the country's first 'dirty cargo' terminal at Port Qasim, Karachi marks a change from the normal narrative.

According to a Pakistan cement producer who Global Cement interviewed earlier in 2014, coal is the most common fuel used to fire cement kilns following a shift from gas in recent years. Subsequently coal prices rose, leading to higher cement prices in the country. A new terminal with the capacity to handle 12Mt/yr of coal (growing to 20Mt/yr in a second phase of the build) could certainly help cut input prices for the industry.

The producer also mentioned that most of the coal that Pakistan currently uses is imported from Indonesia and South Africa. So, indirectly, the South African coal industry appears to be making money helping to make Pakistan cement that eventually arrives back in South Africa to undercut local cement producers! They say that market always finds a way. Ships certainly help.

Egypt: Minister of Trade and Industry Mounir Abdel Nour has announced that cement companies can start using coal from September 2014. He added that using coal will save 12.7Mm³/day of natural gas.

In a separate announcement, an official source at the Petroleum Ministry said that the amount of natural gas supplied to cement factories during January and February 2014 dropped by 35% from contracted levels. Total natural gas and mazut (heavy duty fuel oil) levels fell by 23% during the same period. During the second half of 2013 the amount of natural gas supplied fell by 17% from contracted levels with compensation from the use of mazut.

India: The Cement Corporation of India's (CCI) Bokajan cement plant has halted production since 1 January 2014 due to a shortage of funds to purchase coal. Employees, unions and other local bodies have threatened to thwart any 'conspiracy of management' to close down the plant on 'insubstantial grounds' and have sought the intervention of Assam's Chief Minister to restore production.

Previously, the Board for Industrial and Financial Reconstruction (BIFR) declared that the state-owned CCI was a 'sick' industry but following good revenues from the cement producer's plants in Rajbon, Tendur and Bokajan the Indian government decided to keep the plants running.