November 25, 2011

Bitumen Shortage to Ease with Far East Supply to KSA

To alleviate a nationwide bitumen shortage, road builders have resorted to importing a container load of the key ingredient in the production of asphalt.

Last week, an eagerly awaited shipment of 4200t of bitumen arrived on the Tasco 1, a bitumen and asphalt carrier belonging to Tipco Maritime. The cargo was brought in by specialist manufacturer Colas from a refinery in Singapore.

The bitumen load is being divided among Raubex, Much Asphalt and smaller contractors, who have been forced to halt road construction projects because supply of the product has dropped. Workers on site were asked to take leave over the periods when bitumen supply came to a virtual standstill in September and October. The disruption was experienced over 45 days and work was suspended for up to three weeks.
Bitumen is produced at a number of oil refineries, including Caltex, Natref and Sapref. But scheduled maintenance shutdowns and a fire at the Sapref refinery, which caused an unscheduled shutdown, had a serious effect on supply.

Though the constraints have not affected the cost of bitumen, since it is priced at a set rate, contractors’ costs have soared.

Much Asphalt CEO Phillip Hechter estimates that the problem has cost the industry as much as R2,5bn.
Raubex financial director Francois Diedrechsen says the company has had to use the shipment to “make the best of a bad situation”, but that importing is not sustainable .

Bringing the bitumen into the country is expensive and complicated. The product is also slapped with a 10% import duty upon its arrival in SA. Diedrechsen says the duty was put in place to protect local refineries that produce bitumen, but that under the current conditions it no longer makes sense.

He says that road contractors have difficulty storing bitumen, which needs to be kept in temperature-controlled facilities. None of the contractors has this kind of infrastructure. If Raubex did have storage facilities or was able to store bitumen at refineries, Diedrechsen says, it would import large quantities at a time.
Much Asphalt will transport the product to 17 small facilities around the country. Hechter says that were oil refineries to import bitumen and store it at their existing facilities, companies would be spared having to use a ship as a storage facility and incurring costly docking charges. But he believes importing is going to become standard practice.

Diedrechsen agrees, but says that if refineries could indicate to the industry exactly what they intended producing, the industry could make decisions about building the infrastructure to store bitumen. It can’t do this without certainty that local production would not suddenly increase, he says.
Part of the problem, says Hechter, is that the average age of SA’s refineries exceeds 30 years, and that unscheduled maintenance has become more frequent.

To compound the local supply problem, Engen recently exported 4000t of bitumen and so could release a mere trickle of bitumen into the national market, Hechter says.

Bitumen users have been forced to rely on supply from the Natref refinery, which also has production constraints, and a Caltex refinery in the Western Cape, which is far from road construction sites and produces only one type of bitumen, whereas the industry uses three.

Companies have had discussions with the SA National Roads Agency and the department of transport. Were import duties to be dropped, bringing bitumen in from outside would be more affordable.
Sanral CEO Nazir Alli says national roads absorbed about 70% of SA’s total bitumen supply in 2010.

Shortages have a big impact on its projects, as it is used in the final surface layer of a road.
Earlier this year, Sanral considered asking the energy department to declare bitumen a strategic mineral . This would force refineries to maintain a minimum reserve. However, it is unclear whether Sanral will resort to this measure.

Source -

November 22, 2011

Insufficient Funds for Bitumen

DMC Construction Plc has been ordered to pay 11.7 million Br by the Federal High Court Ninth Civil Bench in the past two weeks after it lost two suits brought against it by the National Oil Company (NOC) and Liby Oil for issuing a cheque that bounced. 

 NOC and Libya Oil brought their suits in September and October, 2001, respectively. NOC, established in April 2007 by Mohammed Ali Al-Amoudi and partners including its current CEO, Tadesse Tilahun, filed its suit in summery procedure in the beginning of September claiming 6.7 million Br for a cheque that was issued to it without having sufficient funds. The cheque, which was issued from United Bank, Lebu-Lafto branch, was presented as evidence along with a letter from the bank stating insufficient funds for not being able to pay on the cheque. 

NOC had asked for the payment of the money including a nine per cent interest on the amount from August 30, 2011, the date payment was denied by the bank for lack of sufficient funds.  While the suit was pending hearing, NOC had asked the court to freeze the assets of DMC claiming that the construction company was trying to transfer its assets to avoid liability. 

Nuredin Keder, the presiding judge at the time, on October 11, 2011, had ordered bitumen asphalt mix found on road construction sites of the company in the Southern Regional State to be frozen during the litigation. The litigation came to end with the court, presided by Mekonnen G. Hiwot ruling, who replaced Nuredin after he was transferred, ruling in favour of NOC. 

Three days after the court had ordered the freeze on DMC, owned by Daniel Mamo and Bethlehem Abebe, Oil Libya had brought a similar suit against it. The oil company, which entered into the local market after it has acquired all assets and downstream operations including liabilities and privileges of Shell Ethiopia Ltd in 2009, sued DMC for issuing a bounced cheque for five million Birr. 

The payment was supposed to be for the supply of fuel products as agreed on a contract signed in December last year. However, the cheque issued from Nib International Bank (NIB) bounced when it tried to withdraw the money on September 20, 2011, the oil company said in its charge. Oil Libya also asked for the amount to payment of the amount it with interest calculated from this date it bounced.
Mekonnen, who also presided in the suit brought by Oil Libya, ruled in favour of the oil company.
DMC has been involved in many construction projects in the country, notable among which is the construction of asphalt roads in Hawassa town, 276Km south of Addis Abeba, which was created to change the face of the city. Although it was summoned in both cases to respond to the suits, the construction company did not. 

It is to pay a three per cent commission until the money is paid back in full, the court also ruled. The plaintiffs have to file a judgement execution to collect the money they are owed by DMC.    


November 2, 2011

Clean Bitumen- Communities Seek Protection

Bitumen communities seek FG’s protection

BENIN-COMMUNITIES in the bitumen belt has called on Federal Government to urgently convene a national stakeholders’ forum to address their aspirations and concerns. They also want government to commence dialogue with them with a view to creating awareness and unity amongst the host communities.
The bitumen producing states in the country are Ondo, Ogun and Edo.

 Vanguard gathered that the country has the third largest bitumen deposits in the world with Venezuela and Canada, coming first and second, respectively.

The bitumen belt communities, which met in Benin, Edo State, yesterday, under the auspices of Bitumen Consultative Forum, organised by Environmental Rights Action/Friends of the Earth, ERA/FoN, also demanded for equity share in the revenue from bitumen proceeds as proposed in the Petroleum Industry Bill now before the National Assembly.

According to the communiqué issued at the end of the one-day meeting by Dr. Uyi Ojo: “We demand an MoU to specify communities’ roles and responsibilities, including benefits between government and oil companies.

“The government must ensure the protection of the people and ensure the sustainability of a healthy environment.”

They stressed the need for the local people to be adequately empowered, if and when they are relocated from their communities at the commencement of bitumen extraction in their areas.
They insisted that the evils visited on oil producing communities in the Niger Delta region should not be allowed in the bitumen belt. when extraction of the deposit commences, the communities called for upward periodic review of benefits accruing to communities.

By Gabriel Enogholase
Source -

November 1, 2011

Cash & Carry Policy for Bitumen

Quality of roads 

Most of the refineries in Asia practice Cash and Carry approach for the purchase of bitumen since the contractors will get paid atleast 2 months later after paving and most of the government will not pay them in time. 

However, in Trinidad, so far the contractors can get some credit but that looks like will change in the coming months. Pls read on....

Works and Infrastructure Minister Jack Warner wants to know where the bitumen being produced by Lake Asphalt of Trinidad and Tobago is being used, since road contractors are complaining that they can't get the material.

Warner is also concerned about the quality of the road works and fears that the highway from San Fernando to Point Fortin will not last, given the poor quality of work.
Warner raised the issues during a tour yesterday of Lake Asphalt, La Brea, where he met with several contractors.

Contractors were told that the company was instituting a "no credit" policy because Lake Asphalt was being owed millions, and could not collect.

Warner said some contractors "say they can't get bitumen. I want to know where the bitumen is going and who are the culprits behind it. I have to wonder why our roads so bad".

He said the surface on older highways lasted 30 years, but the roads being paved today "don't even last 30 months".

He said, "I cannot continue spending money that way. I want to know whether I have any reason to fear
about the highway to Point Fortin."

Chairman of Lake Asphalt, Kuarlal Rampersad, said the company was meeting all contractors' demands for material and he was surprised that they were complaining. He said a certificate of analysis was submitted with each truckload or batch of material coming from the Pitch Lake, La Brea.

Rampersad said, "One contractor purchased three million gallons and based on the records no jobs were done. That is why we are working closely with the ministry. One contractor was given a sweet-bread deal by paying (less) for asphalt while others paid the full price".

Rampersad said "by January 1 (next year) each contractor must register their business. They must partner with Lake Asphalt to purchase bitumen. That way it should be planned and scheduled before they come for asphalt".

Rampersad said the company was also introducing a "no credit" policy to curb instances of contractors not paying. He said one contractor owed $24 million.

By Innis Francis

Source - 

Rubber Modified Asphalt

Liberty Tire Recycling Expert to Serve as a Speaker at the Fifth Annual Rubber Modified Asphalt Conference- Doug Carlson to Highlight Noise Reduction Effect from Rubberized Asphalt

Published: Monday, Oct. 31, 2011 
based Liberty Tire Recycling, the premier provider of tire recycling services in North America, is pleased to announce that Doug Carlson, vice president of asphalt products, will serve as a speaker at the fifth annual Rubber Modified Asphalt Conference.  Hosted by the Rubber Manufacturers Association; the Rubber Division of the American Chemical Society; the Scrap Tire Research and Education Foundation, Inc. and the Rubber Pavements Association, the conference is taking place November 3-4 at the Sheraton Austin Hotel in Austin, TX.

Titled "Noise Reduction Effect from Rubber Modified Asphalt," Carlson's presentation is scheduled for 8:00 a.m. on Friday, November 4.  During this time, he will discuss programs implemented across Arizona, California, Texas and New Jersey.  The presentation will also offer details on a European study that focused on how rubberized asphalt can contribute to quieter pavement.
"Noise pollution is an ongoing concern across our nation's highways.  It can have a significant impact on the quality of life, particularly in communities adjacent to major roadways," said Doug Carlson, vice president of asphalt products, Liberty Tire Recycling.  "Noise reduction is only one of the benefits of rubberized asphalt.  It is also proven to resist cracking and rutting, enhance traffic safety, and reduce splash and spray in wet conditions."

Liberty Tire Recycling is helping to make many of the nation's highways and roadways safer and more durable through the creation of rubberized asphalt.  The company provides crumb rubber to a host of municipalities and states.  Paving contractors then mix the crumb rubber with traditional asphalt to produce a high-performance alternative to traditional paving materials.  It also requires less construction and maintenance costs than traditional asphalt, which saves time and money for all involved.
Topics to be covered during this year's Rubber Modified Asphalt Conference include an analysis of the life-cycle costs of rubber modified asphalt, noise reduction attributed to rubber modified asphalt cold weather applications, performance grading, terminal blending, research on hybrid blends of rubber and an update on research recently concluded and rubber products used in highway and road maintenance.
For more information about Liberty Tire Recycling and the company's rubberized asphalt, visit 

About Liberty Tire Recycling
Liberty Tire Recycling is the premier provider of tire recycling services in North America.  By recycling more than 140 million tires annually, Liberty Tire reclaims about 1.5 billion pounds of rubber for innovative, eco-friendly products.  The recycled rubber produced by Liberty Tire is used as crumb rubber and industrial feedstock for molded products; as tire-derived fuel for industrial kilns, mills and power plants; and as rubber mulch for landscaping and playgrounds.  The company maintains a nationwide network of processing plants, and comprehensive door-to-door collection services.  Liberty Tire Recycling is headquartered in Pittsburgh, PA.  For more information, please visit
Contact: Jeff Donaldson


SOURCE Liberty Tire Recycling

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