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Adani Cement’s dispute with truck driver unions in Himachal Pradesh is about to enter its fifth week. The standoff began on 15 December 2022 when the company closed its integrated plants at Darlaghat and Barmana in response to union freight rates. A third unit, a grinding plant at Nalagarh, reportedly continued to operate for a few days longer with raw materials supplied from neighbouring Punjab and Rajasthan, until the transport companies shut down its supply.

Adani Group took over the plants from Ambuja Cement and ACC following its acquisition of Holcim’s India-based businesses in September 2022. The new business seemed to be running smoothly as new officials were appointed and an alternative fuels subsidiary, Geoclean, was created. Then Adani Cement closed its two plants in Himachal Pradesh. In a statement the group said, “Our plants at Gagal (Barmana) and Darlaghat have been incurring losses for quite some time now with no signs of improvement due to stiff resistance from transportation unions ignoring the larger cause of employment generation and contribution to the state’s revenue.” The group added that it had requested the truckers reduce the freight rate to around US$0.07/t/km from US$0.14/t/km, with the lower rate previously recommended by a committee from the state’s transport department.

Himachal Pradesh held state elections in mid-November 2022 with the Indian National Congress (INC) party taking control of the state government from the Bharatiya Janata Party (BJP). The results of the poll were revealed about a week before the cement plants closed and the new administration has suffered a bumpy start to its tenure. At first the state government issued a show cause notice to the cement producer requesting that it explain the closures or else risk ‘appropriate administrative action.' Several rounds of talks followed to no avail. Most recently, a government subcommittee has been set up that will bring together representatives of Adani Cement and the truck unions to try and agree on new freight rates.

In production terms the closure of the Darlaghat and Barmana cement plants is a big deal in the state, given that they have a combined cement production capacity of 6Mt/yr from the region’s total integrated capacity of 10.5Mt/yr. Data is limited on the direct effects of the standoff on the cement and construction market so far. However, competitor UltraTech Cement may be benefiting as it was swiftly awarded the supply contract for government projects. Local press reports have also noted that some of the unions have been stopping cement trucks from entering the state.

What is clearer is the human side to the dispute. Around 1000 staff are employed both directly and indirectly at the Barmana plant and others have jobs at Darlaghat and Nalagarh. Adani Group has relocated at least 140 staff from both sites during the closures. In addition over 7000 drivers were supporting both plants. Even more people have jobs connected to the plants, their supply chains and markets.

The argument between Adani Cement and the truck driver unions in Himachal Pradesh needs to be resolved soon for the good of everybody. Rising fuel costs are the driver of this situation, although it would be interesting to know why the other cement producers in the state haven’t similarly reacted against high freight rates in the same way. India isn’t the only country where the cement sector has been affected by driver union activity. South Korea endured a series of driver strikes in the autumn of 2022 that disrupted the cement sector. Eventually the government enacted laws to restrict strikes that might cause disruption to key areas such as cement production. The International Monetary Fund (IMF) forecasts that global inflation rates will stabilise in 2023 after a sharp rise in 2022. Growth rates are also predicted to slow. As societies and companies adjust to this it seems likely that there will be more clashes between companies, unions and other organisations as everybody tries to absorb higher costs.

Malaysia: The Sarawak Economic Development Corporation (SEDC) and Bintulu Development Authority (BDA) are planning to set up a joint-venture tasked with imported cement into Sarawak due to shortages and high prices. The company intends to import 0.5 – 1Mt/yr of cement from Siam Cement Group (SCG) in Thailand, according to the Star newspaper. Representatives of the SEDC and BDA recently visited SCG in Bangkok.

Cement prices in Sarawk are reportedly 15% higher than in mainland Malaysia and 4% higher than neighbouring Sabah. Supply and pricing issues have adversely affected infrastructure projects in the state. Maintenance at CMS Cement’s integrated Mambong plant south of Kuching and delays in delivering raw materials to its grinding plant at Kuching grinding plant caused further disruptions to cement supplies in late 2022.

Zimbabwe: Companies registered in Zimbabwe are now subject to a new penalty framework under which they will face a US$14,200 fine for failure to publish audited full-year accounts within 90 days of the end of the year. Additional fines will accrue at a rate of US$100/day for the subsequent 30 days or less, whereupon the regulator will take further action. Business Weekly News has reported that the Securities and Exchange Commission of Zimbabwe (SecZim) enacted the new rules after Lafarge Cement Zimbabwe failed to fully disclose its acquisition by Fossil Mines in December 2022.

Egypt: LafargeHolcim Egypt supplied 8200t of its ECOPlanet reduced-CO₂ cement for construction of Alamein Downtown Towers in Alamein City. The producer said that the cement reduced the project's carbon footprint by 45% compared to ordinary Portland cement (OPC). The government contracted China-based China State Construction Engineering Corporation for construction of the five-tower development. Three of the buildings will be residential, while the remaining two will house business and events facilities.

India: The state of Himachal Pradesh will lose US$11.7m-worth of anticipated tax revenues in the first month of Adani Cement’s on-going closure of its Darlaghat and Gagal cement plants. In previous months, the 1.6Mt/yr Darlaghat cement plant paid US$3.29m/month in goods and services taxes, US$1.75m/month in electricity duties, US$1.45m/month in value-added tax (VAT) on diesel, US$640,000/month in mining royalties and US$363,000/month in goods carried by road and additional goods taxes. Meanwhile, the 4.4Mt/yr Gagal cement plant paid US$1.9m/month in goods and services taxes and mining royalties, US$1.57m/month in VAT on diesel, US$1.47m/month in electricity duties and US$701,000/month in goods carried by road and additional goods taxes.

The Tribune India newspaper has reported that, despite attending several rounds of talks with the state administration, Adani Cement has yet to signal any intention to resume operations at the plants. Both facilities have been closed since 15 December 2022.

Belarus: The Belarusian government has granted reimbursement of cement producers’ interest payments on loans from state-owned Belarusbank and Belarus Development Bank. PrimePress News has reported that banks will fund the payments from the 2023 national budget.

Belarusian Cement Plant will receive US$47.1m-worth of reimbursement for interest payments on three loans from Belarusbank worth US$42.8m, granted between 2009 and 2011. Krichevtsementnoshifer will receive reimbursement of US$137m on two loans from Belarusbank worth US$116m, granted in 2012. Krasnoselskstroymaterialy will receive reimbursement of US$1.1m on a loan worth US$211,000 from Belarus Development Bank. Additionally, it will receive reimbursement of US$72.1m for five loans worth US$34.9m from Belarusbank in 2009 – 2012.

Australia: The Australian government’s Department of Climate Change is receiving public comments on Cement Australia subsidiary Cornwall Coal’s plans to open a new coal mine in Tasmania’s Fingal Valley, near St Mary’s. Local press has reported that the proposed site will operate across three open pits, with a total area of 26ha. The mine will replace the company’s nearby Cullenswood coal mine when it runs out of coal later in 2023, and will operate until 2026 or 2027. Cornwall Coal’s Tasmanian operations currently supply coal for Cement Australia’s Railton cement plant, as well as other local industrial sites.

Under Cornwall Coal’s proposals, the company will build travel culverts for local wildlife, and assist in relocating animals currently occupying the site. Tasmanian devils and two species of quoll – all endangered – live on the land in question.

Mick Tucker, head of Break O’Day Municipality Council, said that the municipality currently depends on Cornwall Coal’s operations for 60 – 80 jobs. He said that the company’s plans have strong support in the local community.

Vietnam: Vietnam National Coal and Mineral Industries Group (Vinacomin) has forecast 6.1% three-year growth in national coal demand to 115Mt in 2025 from 108Mt in 2022. Four main industries – cement, fertilisers, metal and power generation – are expected to retain over 90% of the combined share of domestic consumption. Vinacomin expects national coal production to increase by 1.3Mt/yr over the period, retaining a 40 – 45% stake in the domestic market. Five-year consumption of imported lignite is forecast to rise to 70 – 75Mt throughout the period up to 2026.

Zimbabwe: A deal by Fossil Mines to buy a 76% stake in Lafarge Zimbabwe has been stalled by the introduction of economic sanctions by the US Office of Foreign Asset Control (OFAC). In mid-December 2022 OFAC added Fossil Agro, Fossil Contracting and the group’s chief executive officer, Obey Chimuka, to its Specially Designated Nationals (SDN) list due to alleged links to a previously sanctioned individual, Kudakwashe Tagwirei, and his company, Sakunda Holdings.

OFAC said that Tagwirei had “materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods or services in support of, the Government of Zimbabwe.” It accused him of using his relationships with government officials to gain state contracts, to receive access to currencies including the US Dollar and of supplying luxury items such as cars to ministers. It added that Chimuka was a “longtime business partner” of Tagwirei. Fossil Agro was also linked to a mismanaged agricultural subsidy scheme.

In a statement Lafarge Zimbabwe said that it was “considering various courses of action with a view to protecting the business and the interests of all stakeholders.” The deal to sell a majority stake in the subsidiary of Switzerland-based Holcim was originally finalised in early December 2022.

Ethiopia: The Ministry of Trade and Regional Integration (MOTRI) says it will regulate cement factory gate prices in its latest attempt to lower the price for end users. It has set the price from 22 December 2022 for six months, according to the Capital Ethiopia newspaper. This latest attempt to stabilise the market follows measures such as setting fixed consumer prices, limiting sales volumes for individuals and asking producers to cut distributors out of the supply chain. However, Teshale Belhu, the state minister for the MOTRI, admitted that recent control measures had made the situation worse and increased the number of illegal traders instead. The government now intends to reduce its interaction in the cement market.

The country has suffered from a cement shortage since 2020 due to low domestic production levels. This has been exacerbated by security issues, a lack of raw materials and a shortage of foreign currency.