Holcim confirms first choice

Holcim confirms first choice
06 December 2007

A new cement works at Westport is no longer one of Holcim’s preferences to meet the growing demand for cement.

Holcim New Zealand announced today it had reduced its options to two: a new plant at Weston, near Oamaru, or continuing the existing Westport plant and importing bulk cement.

It favours Weston, for which it received interim approval last week, as a "long term option with an expected life of at least 50 years’’. The second choice, Westport, was "a medium term option of 20 -30 years’’.

The 50-year-old Westport works employs more than 130 people at Cape Foulwind. Holcim’s capital projects manager, Ken Cowie, denied that Westport’s chance of a new works had completely gone. "These are two priority options, not the only two options," Mr Cowie said. "For the Oamaru option to proceed, we still have to get workable resource consents. And we won’t know that until the end of the Environment Court process, if it goes to the Environment Court.’’

Mr Cowie said the interim approval for Weston included some "very stringent conditions" on which Holcim had until December 19 to respond. Its main concerns were conditions on air discharges, and the hours of operation for the coal mine supplying the works.

Holcim wanted the mine to work 7am to 10pm six days a week. The conditions restricted hours of operation from 7am to 7pm.

The shorter hours might mean Holcim had to use more trucks to carry the same volume of coal in a shorter time, he said. The conditions were more stringent than those under which Holcim operated at Westport. "The Westport consent conditions that were put in place were suitable for the plant at its time. We’re talking of different levels of technology, therefore there is a much more stringent look at those things."

He said Holcim was not yet ready to put the two options to its parent company for a final decision.
"Holcim Limited requires a comprehensive feasibility report for any significant capital investment decision. Our project team is currently working on completing this, using information gathered from investigations carried out on the Oamaru new plant option and the Westport options over the last few years."

Factors the parent company was likely to consider when deciding whether to go with Weston or Westport could include how New Zealand options compared with other international investment opportunities, timing and the availability of capital, confidence in the economy and New Zealand government policy.
Holcim would decide late next year, at the earliest, which, if any, of the options to pursue.

Westport people were the second largest group to lodge submissions against the proposed Weston plant. They made 578 submissions -- equivalent to 15 per cent of Westport’s population.

However, the hearing commissioners said their concerns were not relevant, as the decision would be based on whether the Weston proposal complied with the Resource Management Act.

A new plant at either site would cost over $200m. Holcim has said Weston would be cheaper to operate because of lower power, shipping and quarrying costs.

Upgrading Westport’s existing plant and importing more cement would be 25 per cent cheaper for the first five years.

A new Westport plant would be 10 percent cheaper to build than Weston, Westport had more coal supplies than Weston, and fewer resource consents would be needed, Holcim said.
Published under Cement News