Displaying items by tag: Coal
Mugher mulls Chinese supplier for US$33.2m power upgrade
10 October 2012Ethiopia: Mugher Cement Enterprise is considering proposals from two Chinese suppliers for a turnkey project to convert its current heavy furnace oil (HFO) clinker burning system to a coal-fired system. Mekonnen Zergaw, CEO of the state-owned Mugher, declining to disclose the names of the companies. He said that five companies had participated in the bid, of which one has been disqualified at the beginning while two companies did not pass the technical evaluation.
This is the second time Mugher has accepted tenders for the upgrade. Originally Mugher awarded a US$28m contract to Chinese firm Hefei Cement Research Design Institute (HCRDI) that built the same project for the EFFORT Messobo plant. "The company increased the bid by around US$11m after we had already awarded it," said Zergaw.
Mugher plans to complete the coal-fired furnace by the 2013-2014 fiscal year and its demand for coal is estimated to be 693Mt/yr. However, Mugher is still waiting for the approval of a US$33.2m loan request from the Commercial Bank of Ethiopia. The Ethiopian government instructed cement factories in 2010 to shift from HFO to other alternative sources of energy in order to reduce foreign currency spending.
Ambuja, Grassim and Lafarge face coal block cancellations
26 September 2012India: An inter-ministerial panel has recommended the de-allocation of two coal blocks held by five companies, including Gujarat Ambuja Cement, Grasim Industries and Lafarge India, bringing the total number of such blocks to 13. The Inter-ministerial Group (IMG) has completed the review of 29 coal blocks held by private companies and recommended cancellation of licences for blocks holding an estimated 2.6Bnt of coal, affecting 28 private companies.
The affected blocks include the Bhaskarapara block in Chhattisgarh and Dahegaon Makardhokra IV in Maharashtra. The Dahegaon Makardhokra IV coal block, with 132Mt of reserves was allocated to IST Steel & Power, Gujarat Ambuja Cement and Lafarge India in 2009. The Bhaskarapara block with 48Mt of reserves was allotted to Electrotherm (India) Ltd and Grasim Industries Ltd in 2008. The coal ministry has not decided yet how it will re-allocate the 13 blocks.
A senior coal ministry official said the coal blocks would be auctioned to private firms or given to government companies at the reserve price if the ministry does not want to allocate them to Coal India. The ministry has already identified 54 coal blocks for three types of allotments: to government companies, to power companies and to private firms through auction.
"If we decide that Coal India has enough blocks, we may give it to other companies through the auction route. Whatever the route is, no block will be given free of cost and even Coal India will pay a reserve price," the official said.
The de-allocation recommendation follows a probe into the so-called 'coalgate' scam, concerning the allocation of coal mines to private firms since 1993. The practice of granting captive coal blocks to private power, steel and cement companies began in 1993, following an amendment to the Coal Mines (Nationalisation) Act. India's main opposition, the Bharatiya Janata Party, has accused the government of using the probe for alleged vested political interests.
Lafarge Republic signs coal ash deal with GNPower Mariveles
05 September 2012Philippines: Lafarge Republic has signed a deal with the provincial government of Bataan and GNPower Mariveles Coal Plant to buy coal ash from the latter company's 600MW power plant.
Lafarge Republic, formerly Republic Cement, said the deal will start once the power plant begins producing coal ash. It will expire in November 2019. The company didn't provide financial details of the deal.
In a transaction announced in June 2012, Cemex Philippines said it will buy for around US$1 each ton of coal ash to be produced by the 200MW power plant of Korea Electric Power in the central province of Cebu.
Indian production challenged by local coal shortage
17 October 2011India: Indian cement companies are facing a shortage of coal from Coal India Ltd, the country's largest producer. However they are unlikely to be affected by this due to the high levels of imports, a cement trade official has said.
"Most cement companies import up to 70%-75% of the coal needed to run their captive power plants. As of now, I don't expect cement supply to be affected by the coal shortage," said Sanjay Ladiwala, president of the Cement Stockists and Dealers Association of Bombay.
A brokerage report by Emkay Securities has stated that large cement companies such as ACC, Ambuja Cements and Ultratech Cement source around 20% of their thermal coal needs from Coal India's monthly electronic auctions. The report also said that Coal India has diverted the 4Mt for auction in October 2011 to power generation companies. This could lead to some cost escalation for cement producers as they have to rely on higher-priced imported coal.
Separately, Ladiwala said that cement prices rose across most of the country in October 2011, except in southern regions, as demand from the construction sector revived after the summer monsoon rains ended.
India: ACC intends to substitute 5% of its annual coal requirement of about 5Mt over the next three years with waste generated by cities and other industries. The company aims to save USD12m in 2011 by burning waste, primarily plastics, at its plants. In 2010 the company saved USD9.6m on fossil fuels.
"We are currently working on disposal of city wastes. We are segregating the plastic wastes and then use it in our kiln. Plastic has higher calorific value than coal," said ACC Director (Energy and Environment) K N Rao at the 4th Global Initiative for Restructuring Environment and Management.
"We have replaced 2% of our coal requirement by burning all types of wastes. Our target is to replace 5% of our total coal requirement within the next three years," Rao said.
ACC has an installed production capacity of 30Mt/yr in India where it uses about 5Mt/yr of coal. The company is currently implementing two pilot projects on management of waste for use as fuel at Kullu, in Himachal Pradesh, and Katni, in Madhya Pradesh. Besides plastic, the company also burns other materials that it segregates from city and industrial wastes.
Meanwhile the company has also announced that cement shipments reached 1.73Mt in September 2011, a rise by 9.5% compared to the same month in 2010. Production rose to 1.67Mt in September 2011 from 1.52Mt in 2010.
Producers split coal purchases to avoid high prices
17 June 2011Japan: Major cement makers are dispersing their coal purchases to hedge against the risk of buying when prices are high. Traditionally, cement companies purchase a year's worth of coal in the month of April because price changes have tended to be small. With coal prices becoming more volatile, however, they are keeping a close eye on the market to gauge favourable times to buy.
Producers are hoping to keep costs in check in this way because coal purchases account for at least half of their materials expenses. Taiheiyo Cement has procured only about 30% of its coal supply for the current fiscal year, while Sumitomo Osaka Cement Co. and Mitsubishi Materials Corp. have each purchased around 60%. Sumitomo Osaka Cement, which began spreading out its purchases in the previous fiscal year, is reportedly considering whether or not to disperse costs even further.
Coal prices began rising in 2010 after major floods in Australia and the jump between January and March 2011, which served as the basis for purchase prices in April 2011, was particularly steep. Consequently, Taiheiyo Cement and Sumitomo Osaka Cement are believed to have paid nearly USD 150/t, an increase of 30% on April 2010. Wholesale coal prices are currently at around USD 135/t.