As the realities of climate change continue to hit home, social pressure on heavy emitters is increasing and financial pressure will follow, forcing cement producers to act. The cement industry has a responsibility to follow through on its promises to decarbonise.
As a leading supplier to the industry, FLSmidth feels this responsibility keenly. This article is an overview of the options to decarbonise – reducing the clinker factor. As we will learn, the green cement plant of the future may not look so different from a plant you would see today, but it is. The difference is in the way it is operated, what is being put into it, and some of the supporting technology.
Fly ash – set to get a second wind As the cement industry faces increasing scrutiny over its environmental footprint – no stone is left unturned in attempts to reduce CO2 emissions. Fly ash has been used for decades to avoid the resource intensive limestone clinker, but shortages have led experts to debate; have we reached the full potential for fly ash in cement or could harvesting landfills give fly ash a second wind? Fly ash is a great supplementary cementitious material – it has the right properties, meaning that it reacts with lime to form cementitious compounds. It is a by-product from coal-firing industries, but in some cases has ended up in landfills – especially up until 1929, when it was first used in concrete to minimise the use of cement when building the massive Hoover Dam on the Colorado River in the USA. With the potential to replace up to 30 per cent of traditional clinker, fly ash quickly became very attractive to the cement industry and a sought-after commodity. Today, as the green transition of power plants and other heavy industry is accelerating – some countries are phasing out coal and turning towards green energy, natural gas, and/or biofuels, with the result being that fly ash is now in short supply.But just as steel, paper and sugar industries are eager to minimise their environmental footprint, so is cement. And the use of fly ash is both a proven and effective ingredient. The shortage of fresh fly ash has led more and more industry stakeholders to turn their attention towards the centuries of landfilled fly ash. To date, billions of tonnes of fly ash have been landfilled. ‘Harvesting’ fly ash from these landfills makes some industry experts confident that this waste-product could have a second wind in cement. “As we strive towards fulfilling our MissionZero promise of enabling net zero cement production by 2030, we need every tool in the toolbox. Reducing the clinker factor is a key element to that. Fly ash is a proven and well-integrated SCM – to pursue the exploitation of landfilled fly ash would obviously boost our efforts.” To Thomas Petithuguenin, Head of Research and Partnerships for Cement, FLSmidth, every possible path to MissionZero needs to be explored. “I am not saying that fly ash harvesting is a quick-win, but from a product point of view, it is a known ingredient and gives confidence in terms of quality and performance. The challenge is the logistics and infrastructure, which we need to investigate with stakeholders across the value chain.”
Upcycled concrete – a massive business opportunity Repurposing of construction waste is a global, multi-billion-dollar business – to the cement industry it looks to be a win-win situation. As the world’s leading equipment supplier to both the Cement- and Mining industries, FLSmidth is well-positioned to support its customers in capturing a piece of the pie, says Petithuguenin. At an annual growth rate of 4 per cent, the global construction and demolition waste management market is projected to be worth $142.92 billion in 2028. Combined with the cement industry’s acute need to reduce its environmental footprint, we see an increasing interest from customers exploring how to enter the market. The recycling of concrete is not a new business case – different technologies and applications have been deployed for decades, but most often in terms of ‘downcycling’ where material will end up as road fill. Today, the average Construction and Demolition Waste (CDW) recycling rate in Europe is around 70 per cent and even though it still substitutes the use of virgin material, actual ‘upcycling’ has a massive potential of producing high-value materials out of tonnes of construction waste every year. By upcycling concrete, we are not only able to leave virgin, raw materials in the ground, we are also able to reduce the need for traditional, resource-intensive clinker. At a time when no stone is left unturned in the quest for CO2 savings from cement production, reusing recycled cement fines as a filler, supplementary cementitious material (SCM) or by converting them into belite clinker is an attractive business-case. The sustainability aspects of upcycling go hand-in-hand with cost-savings from eliminating the excavation of new raw-materials and a majority of the fuel and energy required for the calcination process of limestone. According to the International Energy Association, the integration of emerging technologies like lowering the clinker-factor in cement and carbon capture is identified to provide some of the largest cumulative CO2 reductions in the 2-degree Celsius Scenario (2DS) compared to the Reference Technology Scenario (RTS) by 2050. As we move into an industrial scale process of turning old concrete to a new cementitious material, we would need to do a few extra steps to get as pure aggregates, sand and cement fines as possible. A procedure that involves process knowledge within crushing and screening and just as important, some heavy-duty equipment such as a jaw crusher, impact crusher, cone crusher, elliptical screens, classifiers, and bag filters. After crushing, the aggregates and sand are used in new concrete, with the potential to substitute 100% of the natural aggregates and sand needed. The cement fines, left from the crushing and grinding are ready to be converted into a belite clinker, most likely at an urban processing plant, whereafter it is mixed with OPC clinker at a 30-70 per cent ratio and reused on site – reducing the climate footprint of both the old and new building, bridge or road project. Another option is to take the cement fines back into the cement industry and carbonate them, which will activate them to SCMs – allowing their mixing with clinker (and reducing the clicker proportion, therefore, the CO2 emissions). Today, an office building has an expected lifespan of 20 years, and a residential building a lifespan of 30-50 years. That’s extremely short and underlines the need for upcycling. If the industry is to support an accelerating urbanisation, the winners of the construction industry will be the ones who see opportunities in waste, which can be used again and again. And they will be the ones getting the building-licences from government authorities.
Mine tailings – a potential goldmine for cement Tailings are both a safety issue and a huge financial burden to miners. But to cement and concrete producers they might hold a massive reservoir of untapped potential. With a shared ambition to reduce the environmental footprint of both cement and mining operations, FLSmidth is well-positioned to support its customers inturning mine tailings into value-added products, says Petithuguenin. Mine tailings are the leftovers after the processing and extraction of metals and minerals from the basic ores. The total amount of mine tailings in active and inactive, closed storages around the world is estimated at more than 200 km3. Any attempt to describe the volumes easily fails as these enormous amounts are hard to grasp, but imagine a cube, six by six kilometres, weighing approximately 280 billion tonnes. As an old proverb goes, ‘one man’s trash is another man’s treasure’. To miners, mine tailings are a costly by-product, which are difficult to manage due to the large quantities. They can pose a safety risk due to the instability of storage facilities further hampered by the material fineness and moisture content. Some of these challenges are mitigated with tailings storage solutions such as dry-stacking, backfilling the tailings material in old mine pits, and using them as aggregates in the construction industry. However, for many miners, safe and secure tailings storage is still a major issue. To others, the mine tailings present an opportunity as an alternative building material or potentially even a carbon sink if there is a CO2 source nearby. Recent research shows that mine tailings can be processed to form supplementary cementitious materials (SCM) or geopolymers. The mining industry recognises the prospect of turning mine tailings into value-added products, while also focusing on reducing tailings altogether. “Increasing demand for metals critical to the energy transition, such as copper and nickel, will lead to greater production of mine waste like tailings under the current production processes. Alongside our members’ commitment to the safe management of their tailings facilities, ICMM’s goal is to significantly reduce or eliminate tailings. As part of this, we are working with members to make operations at their mine sites more circular by improving process efficiencies to reduce waste at its source, as well as creating value from waste such as tailings,” says Christian Spano, Director of Innovation, International Council on Mining and Metals (ICMM). Reducing the use of the resource-intensive clinker in cement production is one of the technologies that will provide the largest cumulative CO2 reductions in the 2-degree Celsius Scenario (2DS), according to the International Energy Association. And with the urgency of climate change – no stone should be left unturned by the cement industry in its quest for CO2 saving – reusing mine tailings as a filler or an SCM can be an attractive business-case. “As a leading supplier to both the cement and mining industry, FLSmidth is in a unique position to engage both parties to establish an efficient and commercially viable value chain for both industries,” says Petithuguenin – working closely with colleagues on both sides of the aisle to connect the dots. “The idea of using mine tailings in construction is not new, but the increasing need for sustainable SCMs is accelerating efforts to establish large-scale processes. In this work, which will include universities and experts from across different sectors, FLSmidth will use its vast process knowledge to optimise designs of the technology needed to produce a quality output.”
Despite weak demand and intense competition in India’s cement sector, leading companies in the industry have managed to sustain growth in the second quarter (Q2) of the fiscal year, while smaller firms have struggled to maintain profitability. In an environment marked by low infrastructure activity and stiff competition, larger cement companies leveraged their scale and operational efficiencies to outperform their smaller counterparts.
Top cement players, including UltraTech Cement and Shree Cement, reported positive financial results due to their ability to optimize production costs and effectively manage distribution channels. These companies benefited from high levels of capacity utilization and strategically located plants that reduced transportation costs. Additionally, they were able to withstand rising input costs, like coal and fuel prices, better than smaller competitors.
On the other hand, mid-sized and smaller cement companies faced challenges in maintaining margins, impacted by the dual pressures of high input costs and low pricing power due to the competitive landscape. Many smaller players struggled with profitability, as they lacked the scale to offset rising operational expenses. As a result, some smaller firms saw a drop in market share, while the larger players have continued to consolidate their position in the industry.
Looking ahead, while market demand is expected to pick up with upcoming infrastructure projects and real estate developments, the intense competition is likely to persist. Industry analysts anticipate that smaller cement companies may continue to face challenges unless they can increase operational efficiencies or seek partnerships to achieve economies of scale.
Ambuja Cements, a subsidiary of the Adani Group, is actively pursuing an expansion strategy focused on acquisitions to bolster its production capacity to 140 million tonnes. This move is part of a broader ambition to strengthen its position within the cement industry and enhance its market share across various regional markets.
The company’s growth plans include identifying and acquiring complementary businesses that can enhance its production capabilities and operational efficiency. With the increasing demand for cement driven by ongoing infrastructure development projects in India, Ambuja Cements aims to capitalize on this momentum through strategic investments.
Adani’s emphasis on sustainability is expected to play a critical role in this expansion. The company is committed to adhering to high environmental standards, ensuring that its operations contribute positively to the community while minimizing the ecological footprint. This focus on innovation and sustainable practices will not only improve profitability but also position Ambuja as a leader in responsible manufacturing within the cement sector.
The competitive landscape of the cement industry is evolving rapidly, with numerous players vying for market dominance. By increasing its production capacity, Ambuja Cements aims to navigate these industry trends effectively and solidify its role as a key player in the market.
In summary, Ambuja Cements is set on a growth trajectory with its sights set on achieving 140 million tonnes in capacity through calculated acquisitions and a commitment to sustainable practices. This strategy reflects a robust response to the rising demand for cement in the context of India’s infrastructure push, promising to enhance both the company’s profitability and its market standing in the long term.
Ambuja Cements, a part of the Adani Group, reported a 52.10% decline in net consolidated profit for the quarter ending September 30, 2024. The profit after tax stood at Rs 4.72 billion, down from Rs 9 .87 billion in the same period last year, according to the company’s filing with the Bombay Stock Exchange (BSE).
The company’s total consolidated income for Q2 FY25 was Rs 78.90 billion, slightly lower than the Rs 78.99 billion recorded in the corresponding quarter of the previous fiscal.
Ajay Kapur, the company’s CEO and Whole-time Director, commented, “Following the successful completion of the Orient Cement transaction, we are on track to achieve a 100+ MTPA capacity by the end of this fiscal year.”
Ambuja Cements reported an increase in net worth by Rs 4.5 billion during the quarter, bringing it to Rs 599.16 billion. The company remains debt-free and maintains its CRISIL AAA (Stable) / CRISIL A1+ ratings. As of September 30, 2024, cash and cash equivalents stood at Rs 101.35 billion.
The company recorded a 9% year-on-year increase in sales volume, reaching 14.2 million tonnes in Q2 FY25.
During the quarter, Ambuja Cements invested Rs 22 billion by subscribing to 8% non-convertible cumulative redeemable preference shares (RPS) issued by its subsidiary, Sanghi Industries.
Additionally, the company announced a binding agreement to acquire a 46.8% stake in Orient Cements at an equity value of Rs 81 billion, solidifying its expansion strategy.