
Displaying items by tag: parliament
Nepal’s parliamentary committee to address cement price ‘cartel’
20 January 2025Nepal: The Public Accounts Committee of the House of Representatives has received a complaint alleging that cement producers have created artificial shortages in order to raise prices, according to Republica newspaper. A meeting has been scheduled to discuss the complaint.
Mexican parliament urges Hidalgo government to retake Tula cement plant for Cooperativa La Cruz Azul
16 November 2023Mexico: The Chamber of Deputies of the Mexican parliament has approved a resolution exhorting the state government of Hidalgo to take ‘urgent action’ to help restore the Tula cement plant to its owner, Cooperativa La Cruz Azul. Local press has reported that the chamber determined that the situation had arrived a critical point, as those illegally occupying the plant were looting and dismantling the plant.
Uruguayan government invites bids for ANCAP
22 June 2023Uruguay: The government has tendered for offers to acquire state-owned Administración Nacional de Combustibles, Alcohol y Portland (ANCAP). The Caras y Caretas newspaper has reported that the board of directors approved the tender on 18 May 2023. The tendering process will run until 11 July 2023, and any resulting privatisation will require ratification by parliament.
ANCAP operates two 300,000t/yr integrated cement plants.
The tender can be viewed here.
India: The Goods and Services Tax Council will review the current imposition of a 28% goods and services tax on cement on 11 July 2023. The Telegraph newspaper has reported that the council is expected to recommend a reduction in the tax rate to the 18% band. Parliament’s Group of Ministers on Rate Rationalisation will then consider the recommendation.
EU concludes CBAM provisional deal
15 December 2022Europe: The European Parliament (EP) of member states and the Council of the EU have concluded a provisional deal over plans for an EU carbon border adjustment mechanism (CBAM). Under the plans, importers of a range of emissions-intensive goods, including cement, will have to pay to obtain CBAM certificates for products entering the EU. Goods produced in countries with the same CO2 emissions reduction measures as the EU will be exempt from requiring a certificate. CNBC News has reported that the mechanism will enter force with a transition period beginning in October 2023. This is subject to ratification by the EP and member states independently.
EP member for the Netherlands Mohammed Chahim said “CBAM will be a crucial pillar of European climate policies. It is one of the only mechanisms we have to incentivise our trading partners to decarbonise their manufacturing industry.”
1.8Mt/yr Qubodiyon cement plant construction receives Tajik parliamentary clearance
22 November 2022Tajikistan: The Tajik parliament has ratified an agreement for the construction of a 1.8Mt/yr integrated cement plant at Qubodiyon in Khatlon Province. ASIPLU News has reported that the government signed an agreement with Orien Invest for the plant's construction on 7 September 2022. Orien Invest said that it hopes to attract US$160m-worth of foreign investment in the project. When commissioned, the Qubodiyon cement plant will be Tajikistan's largest and create 1300 new jobs locally.
During the first nine months of 2022, Tajikistan produced 3.2Mt of cement, down by 0.7% year-on-year from nine-month 2021 volumes. Full-year production was 4.2Mt in 2021, in line with the two previous years.
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.
Dangote Cement rejects Kogi State Assembly arson allegation
11 October 2022Nigeria: Dangote Cement has denied the Kogi State government's purported accusation that it sponsored an arson attack on the state legislative assembly complex. The Punch newspaper has reported that a fire destroyed the Kogi State House of Assembly on the night of 10 October 2022. Dangote Cement helped to extinguish the fire at 8AM on 11 October 2022, sending one of its fire engines to the scene of the disaster. The state government published a statement entitled 'Obajana: desperation sets in as imported hoodlums burn down Kogi Assembly,' in which it allegedly suggests that Dangote Cement had some involvement in the fire's outbreak ‘in an attempt to possibly destroy evidence relating to the ownership tussle between the Kogi State government and Dangote Group over the Obajana Cement Company.’
Dangote Cement's chief branding and communications officer Tony Chiejina said “As a socially responsible corporate entity, we refute this allegation and condemn this unprofessional and irresponsible attempt to smear our image before local and international investors, and thus erode our brand value. Dangote Group would never stoop so low as to sponsor thugs to destroy any property, whether it belonged to the government or an individual. This runs contrary to our business ethos and everything we stand for as a leading manufacturer with teeming customers and consumers across Nigeria and Africa. Our lawyers have been mandated to react appropriately to the damaging allegation from the Kogi State government within the full extent of the law." Chiejina concluded “We urge our stakeholders and the public to disregard such irresponsible and insane statements, as we ask all our stakeholders, namely shareholders, customers, suppliers, employees, and the entire community of Obajana and Kogi State at large, to remain calm while we follow the legitimate and lawful process to resolve this matter with the state government.”
Europe: The European cement association Cembureau has expressed its disappointment in the outcome of European Parliament votes on the EU Emissions Trading Scheme (ETS) and Carbon Border Adjustment Mechanism (CBAM). The parliament voted against an amended proposal to introduce a carbon border tax and to phase out ETS allowances from 2028 to 2034, against a previous proposal of 2025 – 2030. Groups including The Greens – European Free Alliance voted against the proposed legislation as they believed it did not go far enough.
Cembureau chief executive officer Koen Coppenholle said “The EU cement industry needs a strong CBAM to support our decarbonisation efforts and fight carbon leakage. Both draft European Parliament texts on ETS and CBAM contain significant improvements on some key issues – such as CBAM’s watertightness or industrial innovation – which are essential to support our transition to carbon neutrality.” Coppenholle continued “We encourage MEPs to resume negotiations as soon as possible and reach a reasonable compromise on the remaining divisive issues, thereby providing a predictable regulatory framework for the industry.”
UK ETS in the offing
13 March 2020UK: Parliament has voted to grant Her Majesty's Treasury powers to implement a UK emissions trading scheme (ETS) in line with the Climate Change Act (2008). Accountancy Daily News has reported that the ETS will be linked to the EU ETS ‘if such is suited to both sides’ interests,’ but, if not, will be subject to an alternative pricing mechanism. The Treasury said that “in a standalone UK ETS, additional market stability mechanisms can be implemented.”