Displaying items by tag: Government

Russia: Soyuzcement, a cement manufacturing union, predicts that cement production could rise by up to 3% to 57Mt in 2017. In the short-term cement production is expected to benefit from infrastructure investment to local government municipalities from the federal budget and from a reduction to the mortgage rate by the banks. In the longer term the union expects that housing development and concrete road construction will drive the industry, according to Interfax. However, cement production fell in the first two months of 2017 and remained stable in March 2017. Soyuzcement has also prepared a negative forecast that stated that production could fall by 4% in 2017.

Algeria: Abdesslem Bouchouareb, the Minister of Industry and Mines, has said that Algeria will report a surplus in cement production later in 2017. The minister said that the country is expecting to produce 30Mt of cement due to newly commissioned plants, according to the Algeria Press Service. He added that a ‘disturbance’ in the cement market had been caused by speculation and that the government was determined protect the local economy. The minister previously announced the commissioning of new plants at Adrar and in Biskra in April 2017.

Ethiopia: The Oromia state government has started negotiations with Ambo Gnemer about building a US$44m cement plant. The company owns land in the state and it intends to develop a site at Ambo, according to the Addis Fortune newspaper. Previous attempts to develop the plant failed due to a lack of capital.

Jamaica: The government has granted Caribbean Cement permission to import cement from Trinidad & Tobago in order to resolve local supply issues. The cement producer will procure cement from its subsidiary Trinidad Cement, according to the Jamaica Observer newspaper. Caribbean Cement has reported technical issues with its packing plant which have led to it being unable to support the local retail market. It has also suspended all exports.

China: A new special economic development zone in the north of Hebei province is expected to significantly boost demand for cement in the region. President Xi Jinping announced that that the new development named Xiongan New Area would be built southwest of Beijing, according to the ET Net News Agency. The development will be on the same scale as Shenzhen and Shanghai Pudong. Using these previous projects as a benchmark HSBC Global Research estimated that Shanghai Pudong uses around 6Mt/yr and that the region had used 133Mt since its creation in the early 1990s.

BBMG’s shares spiked following the announcement. The largest cement producer in the Beijing-Tianjing-Hebei area is widely expected to benefit from the project. After its restructuring with Jidong Cement it will hold 57% of cement production capacity in the region.

Check out this great graph that the UK Mineral Products Association (MPA) released in its latest sustainable development report this week. It lays out where the MPA says the various direct and indirect costs come from climate change policies per tonne of cement.

Graph 1: The cumulative burden of direct and indirect cost of climate change policies on the cement sector (per tonne of cement). GBP£1 = Euro0.94 at time of writing. Source: MPA. 

If it’s correct then the two biggest contributors from carbon taxes on the price of cement in the UK arise from the Carbon Price Support (CPS) mechanism and the Renewable Obligation (RO). Between them the two policies account for around two-thirds of the carbon tax burden on the price of cement. Of note to an industry advocacy body like the MPA, both of these derive from local legislation and they could be changed or dispensed with separate to the Brexit negotiations to extricate the UK from the European Union that have just officially started.

The MPA then goes on to warn that these added costs could rise from GBP£3.24/t at present to GBP£4/t in 2020 and then the truly terrifying (to energy intensive manufacturers at least) GBP£17/t. Subsequently the MPA has flagged these potentially mounting costs as the biggest threat to the UK cement industry in the near future. Failure to act could mean more foreign imports, loss of jobs and damage to the security of supply. All very heavy stuff. The MPA’s warning was nicely timed to precede the UK government’s response to a consultation on another decarbonisation scheme, the Contracts for Difference (CfD) scheme. Here, the government is about to exempt high-energy users, including cement producers.

Essentially, the key message from the MPA’s report is that the cement sector is picking up but it is still below sales levels in 2007. At the same time it has made all these environmental improvements and, now, steadily tightening regulations threaten its future. Just compare this with the situation in the US where the Portland Cement Association (PCA) recently applauded President Donald Trump’s executive order to roll back environmental legislation from the Obama administration. Despite this it insisted that its members were committed to manufacturing products with a ‘minimal’ environmental footprint.

Funnily enough the MPA didn’t mention environmental issues when it released its updated Brexit priorities for the UK government. This is understandable given the graph above that suggests that the majority of the carbon costs on cement production come from UK legislation. However, sharing a land border with the EU south of Northern Ireland may give rise to all sorts of market skulduggery once any sort of post-Brexit deal becomes clear. And this doesn’t even take into account moving secondary cementitious materials about, like slag, or the UK’s international market in solid recovered fuels (SRF) and the like. Differences in UK and EU overall carbon costs on cement may start to have acute implications for producers in both jurisdictions as the negotiations build. In this atmosphere moves like Ireland’s Quinn Cement’s last month, to build a terminal on the UK side of the Irish border, make a lot of sense.

Gabon: The workers union at CimGabon have held a press conference calling for state intervention in the local cement sector. They blamed ‘uncontrolled’ imports of cement for threatening the closure of the producer’s grinding plant at Owendo, according to the Binto Media Group. The calls for state action follow the suspension of investment by Ciments de l'Afrique (CIMAF) on an upgrade project at the plant. In 2014 the company shut down its clinker plant at Estuaire and its cement grinding plant at Franceville. Germany’s HeidelbergCement also has a stake in the producer.

Colombia: Cemex Latam, the Latin American subsidiary of Cemex, intends to operate its Maceo cement plant project in Antioquia at a reduced capacity due to difficulties with its environmental clearance. The cement producer will continue building the 0.95Mt/yr plant but it will reduce its output to 0.25Mt/yr once it is operational, according to Reuters. The Colombian cement producer attempted to reverse the annulment of its environmental permits with the local body in late 2016.

In September 2016 Cemex fired several senior staff members in relation to the Maceo project and its subsidiary’s chief executive resigned. This followed an internal audit and investigation into payments worth around US$20.5m made to a non-governmental third party in connection with the acquisition of the land, mining rights, and benefits of the tax free zone for the project.

US: The Portland Cement Association (PCA) has supported President Donald Trump’s executive order (EO) on energy independence. The EO instructs federal agencies to review and either revise or withdraw a number of actions taken by the Obama administration, including the Environmental Protection Agency’s (EPA) Clean Power Plan. The EO also immediately rescinds other federal policies, such as the social cost of carbon figures developed by the Interagency Working Group on Social Cost of Greenhouse Gases.

“The PCA applauds President Trump for revisiting regulations that have a significant impact on the nation’s cement manufacturers, such as those in the EO issued today,” said PCA Executive Vice President Todd Johnston. He added that the EPA’s Clean Power Plan had ‘exceeded’ the agency’s statutory authority and that the social cost of carbon figures were developed without necessary transparency and public input.

Despite supporting measures that rollback environmental policy in the US the EPA said that it and its members were committed to manufacturing products with a ‘minimal’ environmental footprint.

Tanzania: January Makamba, the Minister of State in the Vice-President's Office, Union and Environment, has ordered that the Moshi Cement plant close whilst it implements the recommendations of the National Environment Management Council (NEMC). Following a visit by the council the management of the plant were asked to observe the Environment Management Act of 2004, according to the Daily News newspaper. Recommendations the plant has been asked to take action on include reducing dust emissions at the site.