Displaying items by tag: Government
Indian cabinet supports amendment to mining law
10 March 2016India: The cabinet has cleared an amendment in a mining law to permit the transfer of captive mines granted on discretion. Major deals between cement companies including UltraTech, Reliance Cements and Lafarge have been affected because the Mines and Minerals (Development and Regulation) (MMDR) Amendment Act, 2015 restricts the transfer of mining leases to auctioned mines only. The amendment will now need approval by the Indian parliament to become law.
In January 2016, the government proposed the amendment to "spur merger and acquisitions in the mining sector and help in checking the stressed and non-performing assets of banks by allowing them to liquidate assets where a firm or its captive mining lease is mortgaged.”
Quang Ninh to stop cement shipments via Ha Long Bay
10 March 2016Vietnam: The People’s Committee of the northern coastal province of Quang Ninh have decided to stop the loading and discharge activities and transport of clinker, cement and wood chips on Ha Long Bay due to pollution fears at the tourist site.
Under the decision No. 617/QD-UBND, transportation of bulk cargo, such as clinker, cement and wood chips will be terminated from 1 July 2016. Transportation of these goods will be moved to Hon Net port on Bai Tu Long bay instead. The provincial People Committee has also previously proposed that the government stop upgrades at two cement plants, Thang Long 2 and Ha Long, due to similar concerns.
Ha Long Bay, which spans 1553km2 and houses 1969 islands of various sizes, was recognised as a United Nations Educational, Scientific and Cultural Organizatio (UNESCO) World Heritage Site in 1994 and 2000. It is a major tourist attraction in the country with more than 500 tourist boats in service.
Tanga Cement in discussions to use Usambara Railway
07 March 2016Tanzania: Tanga Cement is in discussions with the Tanzanian government to increase its use of the Usambara Railway to transport its products to Arusha, according to Makame Mbarawa, the Minister for Works, Transport and Communication. Mbarawa made the comments to local press on a visit to Tanzania Railway facilities and a cement plant in Maweni.
Tanga Cement has pledged to use the railway line to transport 35,000t/month. The move is intended to minimise damage to the country’s road network. In the 2014 – 2015 year Tanzania Railways transported 44,000t of cement. From July to December 2015 the railway transported 24,960t of cement, according to Masanja Kadogosa, the Deputy Director General of Tanzania Railways.
UltraTech purchase of Jaiprakash Associates cement plants likely to complete by June 2017
01 March 2016India: UltraTech Cement's US$2.5bn proposed acquisition of Jaiprakash Associates' cement plants is expected to be completed by June 2017, according to UltraTech Cement.
"We have to ink definitive agreements and get permission from the High Courts. This will take time. The firm expects the agreement to be finalised in the next 12 - 15 months. Expect it to consummate by June 2017," said UltraTech Cement Chief Financial Officer Atul Daga.
Daga added that UltraTech is also looking at alternative routes in case proposed amendments to the Mines and Minerals (Development and Regulation) (MMDR) Act do not happen. In February 2016 the government took views from public, states and industry on amending the MMDR Act to include provisions allowing transfer of captive mines granted through procedures other than auction.
The transfer of captive mining leases, granted other than through auction, would allow banks and financial institutions to liquidate assets where a company or its captive mining lease is mortgaged. The move will allow mergers and acquisitions in the Indian domestic market, especially in the cement sector, in which several deals are currently on hold.
UltraTech Cement signed a Memorandum of Understanding to buy Jaiprakash Associates’ cement plants in late February 2016. Altogether, the cement plants have a total cement production capacity of 22.4Mt/yr.
Cimerwa calls for cement imports to be restricted
01 March 2016Rwanda: The management of Cimerwa has asked that the government prioritise locally-made cement, according to the New Times. Despite opening a new cement plant in mid-2015 and cutting its prices, the local producer has found it difficult to sell its product despite growth in the construction sector.
"We recognise that while the regional market is large enough for everybody, as local company, and as Rwandan consumers, we all have a duty to contribute to the economy by consuming locally-produced goods and services in order to reduce Rwanda's import bill and build local businesses," said Busisiwe Legodi, the chief executive officer of Cimerwa. The company is also considering setting up depots across Rwanda to further cut its prices.
LafargeHolcim stops quarry extension at Sagunto cement plant
18 February 2016Spain: LafargeHolcim has decided to stop the expansion of its limestone quarry at its Sagunto cement plant. It decided this due to environmental issues with the local government and the lack of viable alternative for expansion in the area, known as Margas.
Lafarge originally signed at agreement with the government to expand the quarry in 2013. However the one licence requires renewal in 2017 and the local government has opposed the request.
Sudan: The Minister of Investment Mudathir Abdul-Ghani has revealed state plans to increase cement production capacity from 3Mt/yr to 5Mt/yr. The aim is to achieve self-sufficiency and to build an export surplus according to local media. The announcement was given at a meeting with the managers of a cement plant in River Nile State.
Pakistan: The Ministry of Commerce has initiated World Trade Organisation (WTO) dispute settlement proceedings to fight South African anti-dumping duties on cement from Pakistan. The basis of Pakistan's argument is that the injury determination mechanism followed by South African authorities (ITAC) is flawed and does not reflect true analysis of the situation.
The Pakistan challenge has raised the issue that the South African authorities used an extended period of investigation of four years for causation analysis and didn't properly examine the evidence in the light of trends over that period. In addition, Pakistan considers that South Africa failed to examine the relationship between the alleged dumping and the worsening of the condition of the domestic industry especially by failing to consider the effects of the decartelization of the domestic cement producers. It also accuses South Africa of not properly examining the entire product under investigation and instead limiting its injury analysis to bagged cement and disregarded sales by the domestic industry of the bulk cement. Finally, the challenge has pointed out that the South African authorities didn't provide a fair opportunity to Pakistani cement exporters to defend their case, denying access to the trade statistics.
In May 2015 South Africa imposed various rates of duties on Pakistani cement exports ranging from 15 – 68% plus anti-dumping duty on the import of Pakistani cement. Since March 2015 Pakistan has been pursuing the matter on a legal and diplomatic basis.
UltraTech deal with Jaypee delayed by mine transfer legislation
01 September 2015India: UltraTech Cement is seeking clarification from the Indian government over the transfer of limestone reserves as part of its deal to buy two integrated cement plants in Madhya Pradesh from Jaypee Group, according to HT Media. A clause in the Mines and Minerals (Development and Regulation) Act 2015 barring the transfer of mines that were not allotted through auctions is delaying mergers and acquisitions (M&As) in the mining sector.
According to a clause in the new Act, transfer of the mining licence is allowed only for mines that have been auctioned. Most of the operational limestone mines in India were allotted and not auctioned. The Act allows for these reserves to be auctioned in the future. However, legal experts are divided on whether this clause will apply retrospectively.
UltraTech agreed to buy Jaiprakash Associates' cement plant with a clinker capacity of 2.1Mt/yr and a cement grinding capacity of 2.6Mt/yr at Bela in Madhya Pradesh in December 2014. It then agreed to buy a second plant at Sidhi with a clinker capacity of 3.1Mt/yr and a cement grinding capacity of 2.3Mt/yr. The deal included access to the limestone reserves in Madhya Pradesh.
The new legislation is also expected to affect Lafarge's sale of its east Indian assets to Birla Corp.
Vote cement! UK election special
06 May 2015With the UK going to the polls on 7 May 2015 in a general election what does this all mean for the local cement industry? Some of the main issues for a buoyant cement industry are market demand, energy costs and government interference through issues like taxation or restrictions on international trading.
Probably the first big problem facing the UK cement industry would be construction market uncertainty following any prolonged post-electoral negotiations. At the time of writing the polls predict that neither of the main political parties will be able to form a legislative majority without the formation of some sort of coalition with a number of minority parties. This also has relevance for eventual policy, so more on this later. Additional political deadlock might also arise from the Scottish Nationalist Party (SNP), potentially the largest minority party, and their demands for further political devolution from the rest of the UK.
Following this, the main two political parties, the Conservatives and Labour, are fairly similar from their manifesto statements advocating deficit reduction, no major new taxes and a continuation of carbon emission targets. If either party gets in, general government should continue as before with major infrastructure projects carrying on as planned and an emphasis on the economy or public spending respectively.
Differences start to emerge with the Conservative Party, a centre-right group with a liberal economic agenda, promising a national referendum on continued membership of the European Union (EU) that could lead to Britain leaving the EU in a so-called Brexit. This could cause complications for businesses with strong European links such as the cement industry. However a 'Brexit' might not be all bad news for heavy energy users as they could potentially renegotiate their carbon emission targets.
Meanwhile, the Labour Party, a centre-left group, immediately takes a negative point since its current leader held a senior economic post in the Labour government in the build-up to the crash in 2008. Since that time three integrated cement plants in the UK have closed. Back to the current election, threats to reform the consumer energy markets might have knock-on effects for business consumers. However, traditionally the Labour Party encourages higher spending that might lead to more large-scale infrastructure projects like the much-maligned High Speed Two railway line from London to the north. These kinds of projects would need lots of cement.
If any of the other minority parties get to carry an influence in a coalition they may be able to influence certain policies as the price for their support. For example, a UKIP right-wing coalition would demand a EU referendum. A Green left-wing coalition would push for decarbonisation energy policies and/or anti-fracking measures. Both of these outcomes could have effects on cement production. The other issue that minority regional players in a coalition might have is concerning changes to cement plants in their part of the world. For example, threats to shut a cement plant in Scotland, Wales or Northern Ireland might then gain a higher profile to any administration that includes the SNP, the Democratic Unionist Party in Northern Ireland or Plaid Cymru in Wales.
In summary, it is easy to identify what the UK cement industry wants but far harder to determine what will happen after the election. Assuming there is a government that is! The country holds a mature cement industry with limited infrastructure opportunities. Barring real political change such as a Green surge it will be business as usual on 8 May 2015. Cement kilns will keep turning.