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US: Inaction by Congress to raise the federal debt ceiling could result in a second recession, adversely impacting cement consumption, according to a recent report by the Portland Cement Association (PCA).
The report says that inaction on the debt ceiling could cause derailment of the fragile US economic recovery. A federal default would have a severe impact on business, consumer and bank confidence, leading to a rise in interest rates. In addition, forced government austerity spending measures are likely. This could depress highway and other government construction programs at the federal and state level. This possibility could cause a great deal of further pain to the cement industry, because public construction projects account for 50% of total cement consumption in the US.
"In this scenario, cement consumption would record a 5.6% retraction in 2011 followed by a 7.5% drop in 2012," said Ed Sullivan, PCA chief economist. "In fact the debt crisis may already be exerting adverse influence on near-term cement consumption due to suspension of state and local treasury bonds as well as an overall uncertainty that has been injected into the economic landscape."
The PCA estimates that the cyclical downturn caused by the Great Recession has reduced federal revenues by USD1.9tn and raised income security payments like unemployment insurance by USD600bn. Aside from revenue and tax assessments, part of the increase in debt has been recorded due to necessary countercyclical spending such as the stimulus package. Defence spending in the Middle East has also contributed to the recent large deficits. The report says that finally (and perhaps most worryingly) deficits have come from increases in entitlement spending fuelled by demographic changes. The Congressional Budget Office expects entitlement spending on social security and the Medicare and Medicaid schemes will rise from USD1.5tn in 2010 to USD2.6tn in 2020.
The debt accumulation during the past four years actually exceeds the total debt accumulated since the country's inception.
Lafarge JV allowed to mine in forest region 11 July 2011
India/Bangladesh: Khaitan & Co has won Supreme Court (SC) approval for French cement company Lafarge to mine limestone in India's north-eastern region in a landmark ruling that will likely set the tone for future reforms in environmental governance. Khaitan & Co litigation partner Sanjeev Kapoor instructed senior advocates for the company, which had commenced mining activity in Meghalaya as a French-Spanish joint venture Lafarge Umiam Mining.
Lafarge successfully defended allegations of fraud and wilful concealment of the facts while contesting the case after 2010's prohibition from mining in the area. The company's project involved sending limestone across the Indo-Bangladesh border on a conveyor belt as raw material for its cement plant in Bangladesh.
"This is a landmark judgement in the context of the environment and mining, especially for projects involving use of forest land for non-forest purposes. The judgement dwells deep into many areas that were until today untouched by any judicial interpretation," said Khaitan & Co. in a statement.
The SC forest bench has upheld the decision of the Ministry of Environment and Forest (MoEF), which had granted revised environmental clearance, site clearance and stage-1 forest clearance to Lafarge. The bench, comprising chief justice S H Kapadia and justices Aftab Alam and K S Radhakrishnan dismissed the petition of 21 tribal activists under Shella Action Committee opposing Lafarge's mining activity in the forest region. The court took into consideration the principles of economic sustainability and environmental viability while laying down significant guidelines such as appointment of a 'National Regulator' to appraise projects, enforce environmental conditions and to impose penalties on polluters.
The court held that, "The word 'development' is a relative term. One cannot assume that the tribals are not aware of principles of conservation of forest. In the present case we are satisfied that limestone mining has been going on for centuries in the area and that it is an activity that is intertwined with the culture and the unique land holding and tenure system of the Nongtrai Village. On the facts of this case, we are satisfied with due diligence exercise undertaken by MoEF in the matter of forest diversion."
QNCC begins trial at Umm-Bab 08 July 2011
Qatar: Trial operations have commenced by the Qatar National Cement Company (QNCC) on its USD6m calcium carbonate plant at Umm-Bab in southern Qatar. QNCC has signed an agreement with the Stream Industrial Engineering Company to build the plant on a turn-key basis. The plant will be specialised in the production of calcium carbonate for use in water treatment operations and is expected to have a production capacity of 250t/day.
QNCC general manager Mohamed Ali al-Sulaiti commented, "There is an agreement with Kahramaa to buy the calcium carbonate for 25 years. For the plant, Ras Girtas power station at Ras Laffan will be one of the supporting stations." He added "QNCC is carefully growing and expanding to play its national role in supporting the infrastructure development in the state, especially after Qatar won the bid for hosting the 2022 FIFA World Cup." Al-Sulaiti further stated that the company has set up two new mills with a planned capacity of 130t/h.
Mexico’s Cemex cancels bond sale 07 July 2011
Mexico: Indebted Mexican cement maker Cemex has cancelled its plans to sell USD650m in bonds as investors are worried about a global economic slowdown. Struggling with limited cash flow and a weak US market, Cemex aimed to raise money to help pay USD1.2bn in debt amortisations by the end of 2013 before being hit with an USD8bn payments bottleneck in 2014.
"Given market volatility and unfavourable performance of markets today, Cemex has decided to not pursue the transaction," the company said in a statement.
Lafarge announces new carbon dioxide targets 06 July 2011
France: Lafarge announced new CO2 targets in partnership with the World Wildlife Fund on 23 June 2011.Key areas include a 33% reduction of CO2 emissions per ton of cement produced by the end of 2020 compared with 1990 levels and a commitment to develop innovative solutions for sustainable construction by 2015. It is anticipated that Lafarge will emit an average of 518kg of CO2 per ton of cement produced in 2020, around 250kg less than in 1990.