ASEC Algeria Cement Company, SPA

completed

ASEC Cement is proposing to develop a 3.126 million tons capacity greenfield cement plant in Djelfa, Algeria (the “Project”). The proposed project is located in an isolated agro-pastoral area with low population density, approximately 25 km south of Djelfa and 5 km west off the N1 highway (Route Nationale 1) connecting Djelfa and Laghouat (110 km south of the site). ASEC Cement acquired the concession to the project from the national Enterprise Regionale des Ciments du Centre (ERCC) in 2006 and transfer of assets including the project site, seven quarry concessions (the limestone quarry and six clay quarries) and other assets (two water wells, 30 KV transmission line, five villas in Djelfa) occurred in 2007. Civil works have been awarded to two contractors, ESACO (an Egyptian contractor) and MHDA (an Algerian-Egyptian contractor), and are currently underway. Construction will occur over a 36 month period and is due for completion in mid-2011. The proposed Project will develop two production lines and will comprise: (i) 2x 1,200 tons per hour (tph) limestone and clay hammer crushers; (ii) a 648 tph additives/corrective crusher; (iii) 2x 400 tph vertical roller raw mills and 2 raw meal blending silos of 20,000 tons capacity each; (v) 2x 4,500 tons clinker per day (tpd) kiln/pyro-processing system, 5 stage preheater with precalciner, designed for natural gas fuel; (vi) 2x 60,000 tons clinker silos; (vii) 3x 200 tph cement ball mills; (viii) 4x 20,000 tons cement silos; and (ix) 6x 120 tph cement packing lines. The nominal production capacity of the two lines is 9,000 tons of clinker per day or 2.97 million tons per year (tpy) assuming a maximum 330 days of annual operation. The proposed plant nominal production capacity is 10,170 tpd or 3.36 million tpy of a cement blend average consisting of 85% Ordinary Portland Cement (OPC, clinker/cement ratio 0.90) and 15% blended cement (clinker/cement ratio 0.80). Assuming an effective capacity utilization of 90%, the plant capacity will correspond to 3.02 million tpy of cement effectively produced. Energy will be supplied from national systems – the gas-fired kilns will be supplied through a 32 km gas pipeline connecting the site to the nearest distribution system; a newly constructed 220KV overhead transmission line will bring the needed electrical power from the nearest grid sub-station in Djelfa, approximately 17 km from the site. The Company will contract the responsible national agency (Sonelgaz) to construct the gas pipeline and the transmission line. Project water supplies will be drawn from the two existing wells, located at about 2 km from the plant site. Both plant operation and maintenance and quarry management and raw material supply will be outsourced. The limestone deposit is located in an area named Djellal El Gharbi, about 1 km northwest of the plant site. The area is a hilly terrain at an elevation varying from 1440 meters to 1345 meters above MSL. The limestone is massive, cavernous, partially crystalline and fossiliferous with lateral changes to marl deposits and argillaceous limestone. The reserves have an estimated 80 years lifetime. A crusher will be installed at the foothill of the quarry concession and the crushed material will be transported by a set of conveyor belts to a circular mix bed stockpile of 65,000 tons capacity in the cement plant area. The five clay deposits are located at about 4.5 km southeast (Oued Essadr deposit), 78 km west (Ben Yacoub 1 and 2), and 45 km southwest (Ben Hamed 1 and 2) from the plant site. A sixth clay deposit is located in Ben Naamane, but it is currently not included in the development plans of the company. Clay reserves have an estimated 50 years life span. Iron ore and gypsum will be procured from local sources and transported by road. The total project area is approximately 558 ha comprising the 100 ha plant site, the limestone quarry (236 ha; the Project plans to submit an application to double its size to the relevant authorities) and 5 clay quarries (222 ha), but not including the pipeline and transmission line rights-of-way (ROW), additional areas for disposal of excavation material and the temporary construction camp and batch plant area. The main land use of the limestone quarry site and elevated areas proximate to the site is for grazing of sheep by nomadic pastoralists. Most of the clay quarry sites are used, at least in part, for seasonal cultivation of wheat. Quarry exploitation will result in economic displacement of a number of these cultivators. The most proximate communities to the plant site are those of Oued Sdar (approximately 5 km from the site) and Ain El Ebel (12 km from the site), both of which are located on the other side of the N1 highway.