Displaying items by tag: Legal

Egypt: An Egyptian court has ordered that the sale of Assiut Cement Company to Cemex be annulled. The plant will be returned to the Egyptian government as it was sold for less than its fair value. The court also ruled that all workers forced to retire after the sale may return.

Cemex bought 90% of the state owned factory in 1999 for US$580m in cash and assumed debt and currently owns a 96% stake. Under the court ruling, Cemex would be responsible for all the financial obligations its Egyptian business incurred since 1999. Cemex plans to contest the ruling and appeal the court's decision.

US: The Environmental Protection Agency (EPA) has approved a new measure meant to help approve US state Montana's levels of haze pollution. The signing follows widespread criticism by industry, conservationists and even other federal agencies.

The proposal aims to reduce emissions of sulfur dioxide and nitrogen oxides that cause haze. It details US$85m in upgrades needed at the state's major contributors of small particles that contribute to park haze, mainly at the Colstrip coal power plant. Holcim's cement plant near Three Forks requires selective non-catalytic reductions totalling US$1.32m to achieve annual NOx emissions reductions of 556t/yr. Ash Grove cement plant near Montana City requires selective non-catalytic reductions and low NOx burners totalling US$1.19 to achieve annual NOx emissions reductions of 1088t/yr.

Many of the commenters, including Holcim and Pennsylvania Power and Light, questioned the computer models used to calculate the effect of various technologies on emissions. Companies also complained that the EPA underestimated the costs required to retrofit their plants with new equipment. In response to a Holcim comment, the EPA decided that Holcim did not have to install lime injection and scrubbers because the reduction in emissions didn't justify the cost. The total price tag for Holcim was originally estimated at US$6.2m.

Under the Clean Air Act, the air in national parks and wilderness areas in the US is supposed to be as clean as possible. To achieve that goal, regional haze programmes in several states set pollution limits on industries. The goal is to restore visibility to natural conditions in national parks and wilderness areas from Idaho to North Dakota by 2064.

US: The US Environmental Protection Agency (EPA) appears poised to soften particulate matter (PM) limits in its pending revised air toxics rule for cement plants, while separately pursuing an extended compliance deadline for the rule. Both moves would represent major concessions to industry groups that sought a weaker rule but have the potential to rile environmentalists who say such changes would be unlawful.

According to an industry source, EPA will propose to soften the rule's PM limits on smokestacks for existing cement plants. New data submitted to EPA by the industry shows that the limit of 0.02kg/t of clinker set by the final rule prior to reconsideration is not realistically attainable. Instead, the EPA will probably revert to a higher number, closer to the 0.043kg/t that it offered in its original proposal.

Environmentalists oppose softening the air toxics rule and recently warned the agency in written comments that, "any changes diminishing or replacing the existing standards would be flatly unlawful." The likely changes to the rule follow a series of 11th-hour meetings that industry officials and others have held with EPA and White House Office of Management & Budget (OMB) staff seeking to shape the proposal.

The Portland Cement Association previously presented a paper to the EPA arguing for an increase in the emissions limit for PM. "The current PM limit of 0.02kg/t of clinker is very stringent," reported the paper. "Very few facilities can comply with the clinker limit without major investments in new and upgraded PM controls."

US: The Environmental Protection Agency (EPA) has sent for the White House Office of Management and Budget (OMB) to review its proposed revisions to its emissions rules for the Portland cement sector, ahead of a tentative 15 June 2012 deadline for issuing the revisions in line with a proposed consent decree with the industry.

The pending proposed revised rules undergoing OMB review will address not only the remand but also the EPA's May 2011 partial reconsideration of the cement rules - including standards for open clinker storage piles and start-up and shutdown monitoring requirements - as those provisions included in the recent proposed consent decree with industry.

In the Register notice on the consent decree, the EPA says that it "would also agree to propose to extend the existing source compliance date of 10 September 2013, or in any case to discuss the possibility of extending that date, and to take final action by 20 December 2012 regarding the date of compliance," if such provisions are 'supported by the administrative record.'

While stalling the compliance deadline would be a 'win' for the cement industry, it would likely draw protests from environmentalists supportive of the current air toxics rule. The deadline for comments on the proposed consent decree is 7 June 2012.

US: The Environmental Protection Agency (EPA) has agreed to delay maximum achievable control technology (MACT) air compliance for cement plants by two years. As part of on-going negotiations with the Portland Cement Association (PCA) if the EPA doesn't issues a proposal to this effect by 15 June 2012 then the PCA and other cement producers will be able to resume legal action against the pollution rulings.

Under the terms of a 16 April 2012 proposed consent decree, the EPA will have to issue by 15 June 2012 a proposal addressing a ruling on 9 December 2011 from the US Court of Appeals for the District of Columbia Circuit. The EPA's revisions will also have to cover separate pending industry administrative petitions. The EPA has been negotiating with the PCA over the terms of the proposed consent decree, following a ruling finding that the EPA failed to reconsider how a related incinerator emissions rule could potentially alter the cement rule's emission limits.

The EPA has also agreed under the proposed consent decree to finalise a revised MACT by 20 December 2012, but the settlement does not require that the agency finalise a two-year delay. Rather, the decree states that EPA must only include its 'final decision on whether to extend the compliance deadlines for existing sources' in the revised MACT.

The EPA and PCA also acknowledge that EPA must subject the agreement to public comment and review. The settlement further notes that, "if the federal government elects to withdraw or withhold consent to this Agreement" after considering public comments on it, "PCA shall have the right to withdraw from this Agreement and file a request to lift the abeyance requested by the Parties."

As environmentalists and states were not party to the settlement, this public comment would provide them with the first opportunity to challenge the possibility of a two-year delay for the rule's compliance deadline and changes to meet the other provisions in the settlement.

Lithuania: Akmene Cement, Lithuania's only cement producer, says it will be affected by the European Union's sanctions against Belarus. Previously the producer sold cement to the Belarusian company Triple, owned by oligarch Yury Chyzh, which has been affected by the blacklist.

"We discussed it today at our company. It is hard to say what it is going to be like now," Arturas Zaremba, head of Akmenes Cementas, stated. "I do not know myself how those sanctions would work. Does it mean that we will not be able to maintain any business relations with them? We will need to clear that up."

EU foreign ministers decided to impose sanctions against 29 Belarus companies and 12 individuals related with Alexander Lukashenko's regime. Akmenes Cementas exported around 70,000t of cement to Belarus in 2011.

Mexico: Cemex has paid 20% of the US$361m in taxes it owes the Mexican government, with the rest due in January 2013.

The company said it made a US$72m payment on 1 March 2012. It said it has an option to extend the January 2013 obligation and opt for 36 instalments instead, a move that would cost the company a bit more.

"Cemex thinks it has adequate provisions to meet the (tax) requirement," the company said in a statement.

In 2008 the Supreme Court overturned a ruling that protected Cemex from paying taxes linked to investments in offshore tax havens. The court cited several articles in Mexico's income tax law that required Mexican companies to pay taxes locally on investments in countries where there are no taxes or where levies are 75% lower than in Mexico.

Saudi Arabia: The Ministry of Commerce and the department of customs has tightened its surveillance on Saudi cement outlets to ensure a strict implementation of the ban on exporting cement, which came into effect on 18 February 2012.Industry sources said that no cement or clinker bricks had been exported since the ban was imposed. Only Bahrain is exempt from the ban, receiving about 25,000 bags of cement per week.

Some cement companies took advantage of a grace period that preceded the start of the ban to export large quantities of cement. Keen not to confuse or disturb the companies, the ministry warned producers beforehand, enabling factories to coordinate with distributors. A meeting was held in January 2012 warning that such a move was becoming likely.

Following the ban on exports Al Jouf cement announced an immediate 30% price increase. The company justified its move by saying that it was done to reduce the losses it might incur as a result of the ban.

The ministry said that it had stopped exports in order to put an end to the cement crisis, which has seen cement become very scarce in certain regions of the country. It asked factories to produce at full capacity to provide enough cement for local consumers. A cement shortage in Makkah is expected to end with the ban on exports and an extra 10,000t/day, produced for the Makkah region.

Earlier, more than 70 people were arrested and are to be investigated in connection with a cement crisis in Jeddah, which had seen cement become expensive and scarce since the start of 2012. Trucks owned by the accused were captured while selling cement at inflated black market prices in various parts of the city.

Russia: Ciments Français has gone to court to keep a Euro50m advance payment from OAO Sibtsem Holding for Turkish cement assets that the latter company did not acquire.

Ciments Français filed a suit with the Russian supreme arbitration court on 20 December 2011 to recognise the ruling of the Istanbul arbitration court as of 7 December 2010. Under this ruling the French company does not have to return the advance payment to Siberian Cement for the acquisition of Turkish Set Group, which has four cement plants with a capacity 5Mt/yr. On 26 December 2011 the court accepted the suit for consideration.

In March 2008 Sibtsement announced that it would acquire Set Group from Ciments Français, having paid Euro377m and about 5% of its shares, estimated at Euro200m. The first instalment stood at Euro50m. However, the world financial crisis prevented the companies from closing the deal. In the autumn of 2008 the parties began discussing payment for the deal by instalments but they failed to reach an agreement.

In the summer of 2010 the arbitration court of the Kemerovo region in Russia confirmed that Ciments Français had to return the advance payment as the agreement was null and void. In early 2011 the Kemerovo court refused to confirm the Istanbul court ruling.

Kenya: Court papers have started to reveal why the Kenyan government may have dismissed the directors of the East African Portland Cement Company (EAPCC) on 22 December 2011. The papers allege that the board spent US$11m on goods without following competitive bidding and in another instance overruled the tender committee to vary the terms of a clinker contract.

"Those purchases were made by direct procurement or restricted tendering," an affidavit by acting Industrialisation Minister Amason Kingi said. "These processes were not authorised by the Public Procurement Oversight Authority."

According to the affidavit, the irregular purchases were made between 15 August 2011 and 30 November 2011. Mr Kingi said that the Kenya National Audit Office had raised a query over the expenditure of US$140,000 that was overpaid to the chairman, Mark ole Karbolo, and the suspended directors.

The affidavit also said that the board changed the terms of a contract to supply 140,000t of clinker after the supplier, Sanghi Industrial, requested to increase the price after supplying only 67,000t. After the company's tender committee rejected the increase, the board granted the variation which ended up costing the company US$850,000.

"The suspended board overruled the tender committee and awarded a price increase for the delivered products as well as for further products to be delivered," said Kingi. The government said that it could not reveal more without jeopardising a forensic audit currently under way.

The ousted directors have previously blamed their removal from office on a multi-million dollar tender that the government wanted swayed in favour of a local supplier. They said that the award of the kiln upgrade contract to South Korean firm, Posco Plantec, in late November 2011 had upset government officials who wanted the tender given to construction firm H Young for US$43m.

EAPCC's directors settled on Posco Plantec on the strength of its financial bid of US$21m. H Young, however, had a superior technical bid. Karbolo and three other directors, Titus Naikuni, Hamish Keith and chief executive Kephar Tande, are seeking to reverse the minister's decision, arguing that EAPCC is not a state-controlled company.