Cement Energy and Environment

Cement manufacturers import 50 per cent of their coal requirement. Though prices of coal in international markets have been stagnant at $120, the sharp depreciation of Re against $ has increased the price of coal. Currently, the price of imported coal is hovering around Rs 6,600/t as compared to e-auction price of Rs 3,400/t. To tide over these difficulties, many cement companies from India have purchased captive coal mines in Africa and other continents. It is estimated that in 2011-2012, the country will face a shortfall of atleast 100 million tonnes of coal. Though cement companies keep 30-40 days of coal inventory, the continued shortage of domestic coal could disrupt production schedule which in turn would impact cement dispatches. Shree Cement is the only cement manufacturer who would be unaffected by coal shortages in the country, since the company procures coal from outside the country. In the long run, dominant cement majors could pass on the hike in coal prices to consumers, but survival of the mid-size and smaller players would be at stake. The major consumer of coal in the country is the power sector. The increasing dependence on imported coal is due to demand for fuel by coal– and-gas-based power plants growing at a faster rate than supply in the country. The demand for coal from the power sector registered a CAGR of 9 per cent over the past four years in line with capacity addition; on the other hand, the domestic supply of coal registered a CAGR of only 6 per cent over the period. Overall, cement production consumed only 2.3 per cent of the domestic coal. As of October 2011, there were around 400 projects on hand entailing a capacity addition of 680 million tonnes. These included 240 million tonnes of projects which were under various stages of implementation and another 420 million tonnes of projects which were in announcement stage. About Rs 1 lakh crore are being invested in projects under implementation. The hike in coal price will result in increase in capital outlay. These projects would either be delayed or have to be scrapped due to paucity of funds. Sector-wise break-up of despatch of coal products for 2010-11 against target and last year's actual Year 2010-11 2009-10 Growth over last year Sector Target Despatch % Satn Actual Abs % Power (Util) 332.78 Steel 4.37 Cement 7.51 Fertilizer 3.01 Export 0.02 Others 109.82 Despatch 457.51 The silver lining being more and more ceme~ manufacturers are shifting to alternate fuels. Recently, ACC has been substituting 5 per cent of its annual coal requirement of about five million tonnes over the next three years with waste 304.15 91 .4 298.03 6.12 2.1 ·· i· .. 4.21 96.4 3.78 0.43 11 .5 " 9.69 129.0 9.25 0.44 4.7 I ~·· - 2.78 92.4 2.61 0.17 6.5 - I ~ - 0 0.01 -0.01 1-· ·-· 102.61 93.4 101.46 1.15 1.1 423.44 92.6 415.14 8.3 2 Source: GIL Annual Report 2010-11 generated by cities and industries. FL Smidth recently installed 4 megawatt waste heat recovery system at Vicat Sagar Cements, Gulbarga plant. Then, there are solar power plants, which can also substitute for coal. Power can also be generated from waste heat recovery system, that is, the power generated from heat during the manufacturing of cement. Courtesy: Konstruction Review, Vol. 1, Oct. 24, 2011, P1. 16