Displaying items by tag: mine
Mining ministry and BUA Group argue over mining dispute
05 December 2017Nigeria: The head of the Ministry of Mines and Steel Development has publicly rebutted accusations by Abdulsamad Rabiu, the chief executive officer (CEO) of BUA Group, that the ministry and Dangote Cement have ‘sabotaged’ operations at the company. Rabiu made the allegations in a letter sent to President Muhammadu Buhari, according to the This Day newspaper.
Rabiu says that the rival cement company and the ministry colluded in a legal dispute about operations at Okpella in Edo State and mineral resources. Allegedly, a militia attempted to damage the cement plant before security forces intervened. Later government officials and police tried to stop work at a BUA Cement mine despite on-going legal action.
Mohammed Abass, the head of the Ministry of Mines and Steel Development, responded by describing Rabiu’s accusations as, “…an unwarranted campaign of calumny against the ministry.” He added that the cement company was attempting to blackmail the ministry into granting a ‘free pass’ for illegal operations. The ministry says that it issued a Stop Work Order for the disputed mine in 2015 but that BUA Group ignored it and has continued to work at the site whilst the legal case was pending. Later, the staff of BUA Group resisted an attempt to shut the site down in mid-November 2017.
Ethiopian regional government demands that foreign cement producers offer jobs to unemployed
21 March 2017Ethiopia: Regional officials are demanding that foreign cement producers, including Dangote Cement and Derba Midroc Cement (DMC), should let cooperatives of unemployed young adults run part of their mining businesses. A draft contract drawn up by Oromia state’s East Shewa Zone administration wants the young adults to operate pumice mines for the cement producers, according to Bloomberg. The initiative follows attempts by the national government to alleviate social pressures, following violent protests in the state in late 2016 in response to over alleged land dispossession, political marginalisation and state repression. The local administration reportedly stopped production at the Dangote and DMC plants in early March 2017 while it discussed its proposals with the producers, according to local press.
Tanzania: The Ministry of Energy and Minerals has given Dangote Cement a 10km2 plot of land in Ngaka, Ruvuma to mine coal. The decision follows the acknowledgment by President John Magufuli that Tancoal, the local coal producer, is unable to meet domestic demand, according to the Citizen newspaper. At present manufacturers are unable to import coal from South Africa due to a government ban. In late 2016 Dangote Cement made a deal with the government to supply natural gas to its cement plant at Mtwara following a temporary shutdown at the site.
India: LafargeHolcim has received environment clearance to raise the production capacity of its Nongtrai limestone mine in Meghalaya to 5Mt/yr from 2Mt/yr for US$28m. The mine is operated by Lafarge Umiam Mining, a subsidiary of Lafarge Surma Cement, according to the Press Trust of India. Limestone from the mine is transported across the border to Lafarge Surma Cement’s plant in Bangladesh. The increased limestone is expected to increase the production capacity at the plant to 5.5Mt/yr from 2.2Mt/yr.
The mine expansion project is subject to final outcomes of cases pending before Supreme Court, High Court and National Green Tribunal. LafargeHolcim’s subsidiaries have also been asked to obtain clearance from the National Board of Wildlife and the State Pollution Control Board.
Ecocem strikes deal with Boliden to supply mines in Ireland and Sweden
23 September 2016Ireland/Sweden: Ecocem has arranged a deal with Boliden to supply mines in Ireland and Sweden. The two mines concerned by this deal are Boliden Tara Mines in Ireland and Boliden Garpenberg in Sweden. The agreements are initially for three years with options for extensions.
Ecocem have entered into an agreement with the Port of Gavle, the nearest Port to the Boliden Garpenberg mine. The Port of Gavle has built an import terminal to unload ships, and transfer the Ecocem product to trucks destined for the mine. The new facility will accommodate approximately 8000t. Ecocem’s cement will be pumped into the mine to backfill voids created by excavation.
“Ecocem Ireland are very proud to be associated with one of Europe’s oldest and biggest mining companies. Boliden’s environmental performance and ambitions are very much in line with our own and we feel that these contracts represent a strong vote of confidence on the consistency of performance and service that Ecocem deliver,” said Conor O’Riain, the managing director of Ecocem Ireland.
India: JK Lakshmi Cement has received environment clearance to expand its limestone mine output in Sirohi, Rajasthan to 13Mt/yr from 8Mt/yr. The expansion will cost US$17.9m and the mined material will supply the cement producer’s Sirohi plant, according to the Press Trust of India.
Crushed limestone will be transported to the plant via a covered conveyor and no local transport infrastructure will be required for the proposed project. Water will be sourced from the West Banas dam. The company has a limestone mine lease area of 390.62 hectare. It is an opencast mine and the lease is valid up to 2030.
The mine expansion will subject to conditions, including acquiring any applicable clearances from the National Board for Wildlife and consent from the State Pollution Control Board. The company has also been asked to conduct hydro-geological study and to obtain the recommendations of Central Ground Water Authority.
Australia: Australian Bauxite has completed its second and largest shipment of cement-grade bauxite, comprising 35,913t, from its Bald Hill mine.
“We have now demonstrated to all our customers that we can load and ship large tonnage cargos of bauxite very efficiently from Bell Bay Port. It also demonstrates that our stockpiles of bauxite performs very well, having withstood the recent major floods in northern Tasmania, without degrading. This is another landmark step for the company,” said Australian Bauxite’s Chief Operating Officer, Leon Hawker.
The mining company intends to sell its bauxite products into three main markets including cement-grade bauxite for the production of high specification cement. It re-opened its Bald Hill Bauxite Project at Campbell Town in northern Tasmania in early August 2016 ahead of the scheduled date.
Dangote Cement to start coal mining coal towards end of 2016
09 August 2016Nigeria: Dangote Cement intends to start mining its own coal at Ankpa, Kogi State in order to cope with gas shortages in the country. The coal will be of a high enough quality to be used without blending. Most of the cement producer’s production lines in Nigeria will have operational coal mills by September 2016. At present the company is using locally purchased coal that is blended with imported coal to ‘assure optimal quality.’
“Our investment in coal is enabling us to reduce our dependence on both oil and gas as fuel sources, thus protecting our production from disruption and improving margins,” said chief executive Onne van der Weijde.
Asia Cement chases missing mine money
21 June 2016Thailand: Asia Cement has arranged negotiations with the Ministry of Industry to retrieve a US$8.5m deposit placed as a guarantee for a limestone mine licence application. The cement producer was granted a licence to operate a limestone mine in Nakhon Si Thammarat province in 1997. However, an environmental order nullified the licence and allowed the government to keep the deposit, according to the Bangkok Post.
"The government and Asia Cement have set up legal teams to negotiate and seek solutions that are acceptable to both sides," said Chat Hongtiamchant, director-general of the ministry's Department of Primary Industries and Mines. The subsidiary of Italcementi also wants to drop the mine project due to a change in the market demand.
Looking at the small print
02 March 2016Small print can cause large consequences. Billion US Dollar consequences. Take the 2015 amendment to India’s Mines and Minerals (Development and Regulation) (MMDR) Act from 1957. Ambiguous wording in the legislation may have held up two prominent cement industry acquisitions in 2015. It also hangs over the recently announced purchase by UltraTech Cement of Jaiprakash Associates’ cement plants.
The MMDR was amended in January 2015. As the Times of India explained in mid-2015, a clause in the amendment said, “The transfer of mineral concessions shall be allowed only for concessions which are granted through auction.” However, it was unclear whether this meant historically allocated mines given via nominations or only newly allocated ones. Given the reliance of clinker plants on reliable mineral reserves this caused havoc. Cue confusion and large legal budgets.
LafargeHolcim’s divestment of two cement plants to Birla Corporation was one casualty. As a condition of the merger between Lafarge and Holcim the Competition Commission of India (CCI) required that the Jojobera and Sonadih cement plants in Eastern India be sold in 2015. Together the plants have a combined cement production capacity of 5.1Mt/yr. However the ambiguity over the 2015 MMDR Act clause on transfer of mining rights held the deal up. By February 2016 Birla Corporation had endured enough. It publicly complained about Lafarge India’s ‘inability’ to complete the deal and threatened legal action. LafargeHolcim retorted by asking the CCI if it could sell all of Lafarge India instead. It received the revised clearance and a new buyer is yet to be announced.
Another victim was UltraTech Cement in a previous attempt to buy Jaiprakash Associates’ cement assets. That time it was down to buy two integrated cement plants in Madhya Pradesh with a combined clinker production capacity of 5.2Mt/yr with associated mineral rights. The deal was agreed in December 2014 and then reported delayed in mid-2015. Finally, on 28 February 2016 the Bombay High Court rejected the deal, citing the MMDR Act as the prime cause.
Luckily for UltraTech Cement the story has a happy ending (so far) as it then announced that it was purchasing the majority of Jaiprakash Associates’ 22.4Mt/yr cement portfolio instead for US$2.4bn. It is hoped that the deal will be finalised by June 2017 but this partly depends on the MMDR Act being amended. Although UltraTech Cement have said they are looking at alternative routes to the deal in case the act isn’t amended.
Poor legal wording kiboshed at least two cement industry deals for over 10Mt/yr production capacity. Roughly, at the price UltraTech Cement is paying for its latest deal, that’s over US$1bn worth of Indian cement assets. Given the hard time the Indian cement industry had in 2015 the question should be asked regarding how much damage the MMDR Act amendment has done. One option for the beleaguered industry is to consolidate and cut its costs. This was massively delayed in 2015.
The proposed 2016 amendment to the MMDR Act reads as follows:
“Provided that where a mining lease has been granted otherwise than through auction and where mineral from such mining lease is being used for captive purpose, such mining lease will be permitted to be transferred subject to compliance with the terms and conditions as prescribed by the Central Government in this behalf.”
Let’s hope it does the trick this time.