Displaying items by tag: Limestone
Sweden: Cementa, a subsidiary of HeidlebergCement, has applied for an extension to its limestone mining lease at its Degerhamn cement plant. The current lease expires in 2022. The renewal covers 15Mt for an additional 30 years. The cement producer says it has conducted ‘extensive’ environmental impact studies at the site and the impact will be ‘marginal.’
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.
Anhui Conch Cement to buy drilling rig from Atlas Copco
15 November 2017China: Anhui Conch Cement plans to buy and import a hydraulic drilling rig for a limestone quarry supporting a cement plant at Tongchuan in Shaanxi. Atlas Copco is one of the lead suppliers of the equipment, according to Inside International Industrials. Delivery is scheduled by February 2018. The estimated cost is around US$1.7m.
The overall mining project is expected to have a production capacity of 4500t/day with a total value of US$61m. Construction is planned to begin in the first half of 2018. It was approved by Shaanxi Provincial Development and Reform Commission in mid-2017.
European Commission clears acquisition of Fels-Werke by CRH
01 November 2017Germany: The European Commission has approved the acquisition of Fels-Werke by Ireland’s CRH. Fels-Werke is active in mining, processing and distribution of lime and limestone products, gypsum and mortar in Germany, the Czech Republic and Russia. The commission concluded that the proposed acquisition would raise no competition concerns because there is limited geographic overlap between the companies' activities. It described them as ‘remote’ competitors. Fels’ owners Xella agreed to sell the business to CRH in August 2017 for an undisclosed sum.
Bolivian mining group calls for new cement plant
01 November 2017Bolivia: The mining industry chamber in Tarija wants governor Adrian Oliva to build a new cement plant in Mendez province. The proposal follows confirmation by the National Geology and Mining Technician Service (Sernageomin) of ‘large’ limestone deposits, according to the El País newspaper. Sociedad Boliviana de Cemento (Soboce) currently operates a 0.2Mt/yr plant at El Puente in the same region.
Ambuja Cement wins Harima Peethasar limestone block after delay
03 October 2017India: Ambuja Cement has won an auction for Nagaur's Harima Peethasar limestone block in Rajasthan following a procedural objection. JSW Group claimed that it was unable to place a counter bid in the online auction due to problems with the computer servers of Metals and Minerals Trading Corporation (MMTC), the state company running the sale, according to the DNA newspaper. After examination the claim was dismissed.
Germany: Ireland’s CRH has acquired Fels, a lime and aggregate business, for Euro600m from Xella International. The purchase includes nine production locations in Germany, one in the Czechia and one in the Moscow region of Russia, as well as over 1Bnt of limestone reserves. The assets will be added to CRH’s Europe Heavyside division. The purchase is expected to make CRH the second largest business in the European lime market. The acquisition has been funded by the sale of CRH’s Americas Distribution business to Beacon Roofing Supply for Euro2.2bn.
India: Ambuja Cement has purchased a limestone block in the Chandrapur district of Maharashtra. An estimated limestone resource of 42Mt was acquired via state auction for a price of 125% of the value of mineral dispatched. Formal confirmation via the state government is expected to follow soon.
Update on South Korea
28 June 2017Further shifts in the South Korean cement industry this week as Ssangyong Cement purchased Daehan Cement. Private equity firm Hahn & Company owns both producers so this looked like a realignment exercise. Yet it follows a corporate version of pass-the-parcel within the local cement industry. Hyundai Cement was acquired by Hanil Cement in the first half of 2017, Halla Cement was bought by investment firms from LafargeHolcim in mid-2016 and Tongyang Cement was bought by Sampyo Group in 2015.
Ssangyong Cement’s purchase is seen in the local media as an attempt to reaffirm its market dominance. Before the Hyundai Cement auction, Ssangyong Cement was the market leader with a cement production capacity of 15Mt/yr and a market share of around 20%. Hanil Cement’s on-going purchase of Hyundai Cement will see it increase its production capacity from 7Mt/yr to over 15Mt/yr. Ssangyong Cement’s transaction for Daehan Cement puts it back in the lead again.
The local industry is notable for the high ratio of cement grinding plants to integrated plants. The Korean Cement Association (KCA) reported that the country had 12 integrated plants to 23 grinding plants in 2015. This compares to other developed countries in relatively remote places such as Australia and Chile that also have high numbers of grinding plants. South Korea doesn’t import that much clinker though. One difference is its prominent steel industry that has hovered around 70Mt/yr since 2014 and which puts it in the top ten of world producers. Subsequently, as POSCO’s Sunghee Han explained at the Global Slag Conference 2016, 13.9Mt of granulated blast furnace slag (GBFS) was produced in 2015 and the majority of this ended up being used as supplementary cementitious materials (SCM) either to grind cement or to make concrete. The size of this slag market underlines the value of the Daehan Cement sale, as it is a major slag cement producer.
Other notable point about the local cement industry includes the presence of a few extremely large multi-kiln plants with production capacities in excess of 7Mt/yr. The country also has a relative scarcity of limestone. South Korea is the fifth biggest importer of limestone in the world at US$34m. It brings limestone in principally from the UAE, Japan, India, Malaysia, and Vietnam. Notably it also has one of the world’s longest single conveyors, with a length of 12.8km, connecting a quarry to Ssangyong Cement’s Donghae plant.
Graph 1: Cement production and consumption in South Korea, 2010 – 2015. Source: Korean Cement Association.
Unlike the European cement-producing nations that this column has covered in recent weeks, fundamental market structural changes do not appear to be driving the merger and acquisition activity in South Korea. As Graph 1 shows, production and consumption fell from 2010 onwards but has started to pick up since 2013. Instead, a general slowing of the economy from 2010 and a relaxation of the rules triggered merger and acquisition activity. Unsurprisingly then, perhaps, given the potential opportunities for market manipulation, that the Fair Trade Commission fined six of the seven major producers a total of US$168m in early 2016 for alleged price fixing. With the private equity firms widely expected to exit the market after a relative short time, the cement industry looks set to remain volatile for the next few years. Doubtless the market regulators will be watching very carefully indeed to see how it all plays out.
Poland: Belgium’s Lhoist has ordered a FCB TSV Classifier 1400 HF from Fives to increase the production of a limestone grinding plant. The unit already operates two FCB TSV Classifiers following upgrades in 1999 and 2016. The classifier will close a circuit, which consisted in a ball mill in open circuit. The installation of this equipment is intended to increase both the grinding line capacity and the finished products quality.