Displaying items by tag: Government

Ireland/UK: A six-month feasibility study conducted by Mannok at its Derrylin plant, in conjunction with Catagen, has found a number of ways that the cement producer can reduce its CO₂ emissions. Using Catagen’s HGEN renewable hydrogen generator with waste heat recovery could potentially decrease the cement plant’s annual CO₂ emissions by 7%. In addition the study found that using biohydrogen generation from waste biomass could generate larger volumes of hydrogen with less renewable energy required, compared to electrolytic hydrogen generation. Using Catagen’s BIOHGEN process in this way could minimise carbon intensity by a further 18%. A combined group of engineers from Mannok and Catagen worked on the project.

Kevin Lunney, operations director at Mannok, said “We are very excited to be working with the Catagen team, who have demonstrated a deep level of technical ability and competency during the feasibility work. I have no doubt that Mannok will derive significant value from the work already completed, with many new opportunities for collaboration now presenting that we would not have considered before. Achieving Net Zero is now the primary goal for our business and I expect Catagen will play a significant role in our achieving that goal, which we expect will have major benefits for the sector overall.”

In early April 2023 Mannok revealed that it had secured funding from the UK Government Green Energy Scheme to support its energy transformation programme. The first phase of the initiative, which the funding will support, is the generation of onsite green hydrogen to replace the use of diesel in over 70% of the company’s 150 heavy-goods truck fleet.

Belfast-based Catagen started as a testing company providing emissions data to the automotive sector. It has started working in other industrial sectors - such as cement, glass and steel in Europe and the US – as part of its ClimaHtech product range.

Mongolia: L Naranbaatar, the head of Khutul Cement and Lime, has responded to a strike at the company by outlining changes made since it was nationalised in 2022. Workers are protesting with demands to add wage incentives and to appoint managers from within the company, according to the UB Post newspaper. They have also alleged that the company is spending its budget illegally.

During a press conference Naranbaatar explained that the company produced 403,000t of cement in 2022, an increase from 2021. It reported a profit of US$3.3m in 2022, the first time it had made a profit in the last decade. However, the producer’s wage bill nearly doubled to just below US$6m in 2022. The company also spent US$2.25m on upgrades to the plant in 2022, the first such investment made in five years, compared to US$171,000 spent on maintenance in 2021.

Former economist L Naranbaatar was appointed as the head of Khutul Cement and Lime in March 2022. The company was transferred to the Development Bank of Mongolia when the heir of the previous owners refused to accept the inheritance.

Kenya: A court has prevented the takeover of a US$47.8m parcel of land belonging to East African Portland Cement Company (EAPCC) by the government. The court found that the government had not followed proper consultation processes. The East African newspaper has reported that the government had already concluded a deal with China and Oman-based investors for affordable property developments on the land.

EAPCC says that it now plans to use the site to build its own green smart city. The cement producer says that this will help to diversify its income streams.

Russia/Uzbekistan: The US Department of State has imposed sanctions upon USM Holding including its subsidiaries Akkermann Cement and USM Cement in Russia, and Akhangarancement in Uzbekistan. The action is intended to target company owner Alisher Burhanovich Usmanov and his various business interests. Other USM companies in the iron, steel, copper, gold, telecommunications and real estate sectors are also affected.

The US Department of the Treasury’s Office of Foreign Assets Control noted that Usmanov was, “one of Russia’s wealthiest billionaires, with vast holdings across multiple sectors of the Russian Federation economy as well as internationally.” It added that he was linked to multiple senior Russian officials, including Russian President Vladimir Putin as well as Dmitry Medvedev, current Deputy Chairman of the Security Council of Russia and former President and Prime Minister of Russia. Usmanov has also been sanctioned by Australia, Canada, the European Union (EU), Japan, New Zealand, Switzerland and the UK.

These latest US sanctions are in response to the Russian invasion of Ukraine in February 2022. Companies on the sanction list are forbidden to conduct business transactions with any US citizens.

Akkermann Cement operates two cement plants and a network of 12 terminals in Russia. It acquired a majority stake in Uzbekistan-based Akhangarancement in early 2022.

Huaxin Cement completed its acquisition of a majority stake in Oman Cement this week. The China-based company estimated that the purchase price was around US$193m. Following the transaction with a subsidiary of the Oman Investment Authority, the country’s sovereign wealth fund, the cement producer now controls just under a 60% share in Oman Cement.

A key part of the deal includes Oman Cement’s integrated plant at Ruwi in the north of the country. The three-line unit has clinker and cement production capacities of 2.6Mt/yr and 3.6Mt/yr respectively. With the partial ownership share of 60% taken into account, this places the capacity purchase price at around US$124/t, a lower figure for capacity compared to other international acquisitions.

Oman Cement has a couple of new projects in the pipeline that have been mentioned on and off previously over the last year or so. These include the construction of a new 10,000t/day fourth production line, an upgrade to line 3 to 4000t/day from 3000t/day at present and plans for a new plant at the Special Economic Zone (SEZ) at Duqm. The company said it was looking for a contractor to carry out the upgrades at the Ruwi plant. However, Rashid bin Sultan al Hashmi, the chair of Oman Cement, said in the company’s annual results for 2022 that the Duqm project, operating under the name Al Sahawa Cement, had run into problems with the supply of gas for the proposed unit. Another recent development was the signing of a deal between Omani Environment Services Holding Company (Be’ah) and Oman Cement for the supply of refuse-derived fuel (RDF). As an aside, that last one may also have received a boost this week with the news that the local Environment Authority has suspended licenses for the export of used tyres from the country.

How these existing projects will fare under the new ownership remains to be seen, but Huaxin Cement has a track record for developing new cement production capacity outside of China. The cement producer describes itself as de-facto controlled by Switzerland-based Holcim although Holcim said in its annual report for 2022 that Huaxin Cement is a joint-venture. It currently operates plants in Cambodia, Kyrgyzstan, Malawi, Nepal, Tajikistan, Tanzania, Uzbekistan and Zambia and says that it has 10 additional projects in Africa, the Middle East and elsewhere in preparation for future business expansion. In 2022 it started operating a 3000t/day production line at Nepal Narayani and commenced the second stage of a project to build a 4000t/day clinker line at Maweni in Tanzania. Plus, as mentioned in our recent roundup of China-based producers, 13% of the group’s operating revenue derived from business outside of China in 2022 compared to 8% in 2021.

Other producers from outside of Oman have also been active locally in 2023. In late January 2023 India-based UltraTech Cement agreed a deal to buy a 70% stake in Duqm Cement Project International from Seven Seas for US$2.25m. The agreement covered a limestone mining lease that UltraTech Cement said was important for “raw material security.”

The other big development in the Oman cement market since we last covered the country in September 2021 was an intervention by the Capital Market Authority (CMA) on Raysut Cement. The chief financial officer resigned in November 2022 before the CMA questioned the company’s financial results for the second quarter of 2022. The CMA then replaced the board of Raysut Cement in December 2022 saying it had detected ‘material misrepresentation’ in the company’s third quarter results.

The last four months or so have marked a turning point for the local cement sector with a change in leadership for the two largest producers. Oman Cement reported strong growth in 2022 although it warned of “low priced cement being supplied by competitors.” Raysut Cement, unsurprisingly, recorded a loss in 2022. The construction market in the country is expected to grow as the economy leaves the coronavirus period behind, mounting energy prices boost national revenue and potentially some of this heads into infrastructure development. This puts the new management at both producers in a good position going forward.

Germany: Heidelberg Materials has appointed industrial gases and engineering company Linde to install a carbon capture and liquefaction plant at its 1Mt/yr Lengfurt, Bavaria, cement plant. The project is scheduled for delivery in 2025. When commissioned, the system will capture and liquefy 70,000t/yr of CO₂. Heidelberg Materials plans to use a small part of the liquefied CO₂ in its development of recarbonation technologies for cement and concrete, with the remainder to be marketed by Linde to industries, including chemicals and food. The German government granted Euro15m in funding for the project under its Decarbonisation of Industry programme.

Heidelberg Materials’ chief executive officer Dominik von Achten said "We are pleased to be able to implement the world's first carbon capture and utilisation (CCU) project in the cement industry on an industrial scale.”

Linde’s executive vice president Jürgen Nowicki said “With this joint venture, two companies that are world leaders in their field are combining their skills with the aim of finding a solution that is as sustainable as it is economical. After successful pilot applications, this large-scale plant paves the way for sustainable cement production.”

Image credit: Cement plant Lengfurt, Germany. Copyright: Heidelberg Materials. Photographer: Steffen Fuchs.

Congo: Antoine Thomas Nicéphore Fylla Saint Eudes, the Minister of Industrial Development and Private Sector Promotion, has visited the construction site of the Tao-Tao cement plant in Niari department. Accompanying the minister were the local prefect of the region and a representative of the Indian embassy, according to Les Dépêches de Brazzaville newspaper. The unit is a joint-project between the local and Indian-governments. A loan for the project with the Export-Import Bank of India was signed in 2015.

The plant will have a production capacity of 0.6Mt/yr once complete. Operation is currently planned to start in 2014. Promac is reportedly carrying out the construction work. The Republic of the Congo currently has two operational integrated cement plants, run by Dangote Cement and Société Nouvelle de Ciment du Congo (SONOCC) respectively, and a grinding plant managed by Ciments de l'Afrique (CIMAF).

India: The government has published plans for a new broad-gauge double railway line in Rajasthan. The planned line will connect Jaipur and Sawai Madhopur, and will facilitate the transport of coal to businesses including cement plants. Maritime Gateway News has reported that the new line will increase carrying capacity in the local railway maintenance block by 80%. It is scheduled for commissioning in the 2027 financial year.

Canada: Heidelberg Materials and the Canadian government have signed a memorandum of understanding (MoU) to collaborate on the installation of a carbon capture system at the company’s Edmonton cement plant in Alberta. The project is scheduled for completion in 2026, at a total cost of US$1.01bn. When operational, the system will capture 100% of the Edmonton cement plant’s CO₂ emissions - 1Mt/yr – for transportation and storage in nearby Wabamun. Canada Newswire has reported that construction of the system will create 2000 jobs.

The government said that it would be a ‘significant partner’ for the project. The size of funding will depend on other provisions under its Investment Tax Credit for Carbon Capture, Utilisation and Storage scheme, which is currently being finalised.

Heidelberg Materials’ reaction to changes in the law in Hungary received attention this week in the German press. The government introduced its Act on Hungarian Architecture in March 2023 that will enable it to set production levels and prices upon foreign-owned cement producers when the new legislation takes force in July 2023. An unnamed executive at the Germany-based Heidelberg Materials told Der Spiegel that, "These regulations represent a complete violation of all rules of the European single market.” They added that the Hungarian government appeared to be trying to force the producer to sell up. The report further alleges that the owners of Duna-Dráva Cement, Heidelberg Materials and Schwenk Zement, also received an offer to buy them out in mid-2022 from an individual with links to Prime Minister Victor Orbán.

This latest move to corral the cement sector in Hungary follows a number of recent changes in legislation. Notably, Decree 404 was introduced in July 2021. This set a 90% tax on the ‘excess’ profits of cement, plaster, chalk, gravel, sand, clay, lime and gypsum producers with the stated intention of wanting to prevent rising prices. The government set a threshold price for cement of Euro56/t at the time. At the same time it also blocked exports of cement and other raw materials of declared strategic importance unless affected companies had registered with the Ministry of the Interior. The European Commission (EC) responded to a parliamentary question on the matter in November 2021 saying that it had sent a formal letter to Hungary informing it that it was breaching some parts of the Treaty on the Functioning of the European Union (EU) on the free movement of goods. Although it noted that the new law also affected exports outside the EU, which was beyond the EC's remit. It added that the so-called ‘mining royalties’ did not seem to breach EU tax law.

Concerns over these issues between Hungary and Germany also surfaced in October 2022 when Orbán met with the German Chancellor Olaf Scholz. At this time Thomas Spannagl, the head of Schwenk Zement, said that the windfall profit tax in Hungary had a "serious negative" impact on business and that importers were not affected in the same way.

Heidelberg Materials’ subsidiary Duna-Dráva Cement is the largest cement producer by production capacity in Hungary with two integrated plants at Beremend and Vác. Together they have a production capacity of 2.8Mt/yr, according to the Global Cement Directory 2023, or about 70% of the country’s active national capacity. Heidelberg Materials reported that its result from equity accounted investments fell by 27% year-on-year to Euro262m in 2022 from Euro356m in 2023 due to a decline in earnings particularly in China and Hungary. This compares to a 4% drop to Euro3.74bn in its result from current operations before depreciation and amortisation across the whole business. Despite this it also noted that Hungary’s overall economic output had grown by 5% in 2022.

Just before the new laws affecting cement companies starting arriving in mid-July 2021, the Hungarian Competition Authority started an investigation into a “drastic” increase in raw material prices. This followed a warning a year earlier in 2020 that it had started competition supervision proceedings against the three main market participants: Duna-Dráva Cement, Lafarge Cement and CRH. All three are foreign-owned companies.

Lafarge Cement Hungary operates the Kiralyegyháza plant and it is due to change its name to Holcim in May 2023. Its predecessor companies, Holcim and Lafarge, also used to run plants at Hejocsaba and Lábatlan before the merger in 2015. However, the Hejocsaba plant ran into legal problems between Holcim and another investor, shut in 2011 and was later forcibly taken over by the other party in 2014. Today the plant operates as Hejőcsabai Cement- és Mészipari (HCM) but cement production is reportedly yet to restart nearly a decade later and Holcim says that legal proceedings are still ongoing. The Lábatlan plant, meanwhile, closed for good in the early 2010s. CRH took over some of Holcim’s other operations in Hungary in 2015 at the same time as the formation of LafargeHolcim but does not run any cement plants in the country at present. It does own cement plants in nearby countries that are able to supply the Hungarian market as well as running 19 concrete units. It describes itself as the “number two player” in the local market. It wasn’t specific on Hungary in its financial results for 2022 but it did describe sales in its Europe East region as being ahead of 2021, “due to a strong focus on commercial actions to offset significant cost inflation.”

Construction costs in Hungary do appear to have grown faster than other European countries in the second half of 2021 as the country came out of the coronavirus pandemic. However, the country's anti-immigrant labour stance may have also contributed to the situation, in addition to the high-energy prices and supply chain bottlenecks experienced elsewhere. In addition, cement companies are also capable of monopolistic behaviour. For example, Duna-Dráva Cement’s proposed acquisition of Cemex Croatia was blocked by the EC back in 2017 on competition grounds. However, given how international the cement industry has become, it is surprising to see this kind of treatment from a government within the European Union.