Court sets aside EPA’s order halting MLCF’s expansion

Approves company’s Brownfield cement line that has 2.2m-ton capacity

KARACHI: The Lahore High Court (LHC) has set aside the Environmental Protection Agency’s (EPA) order in which it halted construction work at Maple Leaf Cement Factory’s new cement line, according to a company notice sent to the Pakistan Stock Exchange (PSX) on Thursday.

According to the notice, the court has approved Maple Leaf’s Environment Impact Assessment (EIA) for its 2.2-million-ton-per-annum Brownfield cement line.

However, the company has been ordered to wait until the issuance of a survey report (criteria for the delineation of negative and positive areas for the installation of new or enhanced existing cement plant), carried out by Mines & Minerals Department, Punjab.

Earlier, the EPA ordered the construction work to be stopped on the grounds that Maple Leaf had started work without obtaining a written approval from the agency. However, Maple Leaf challenged the order in the LHC.

Moreover, the EPA has been directed by the Court to issue orders in light of this survey, within 14 days of its release date (the survey report was expected by mid-January 2018 which is now expected to be issued next week), according to Topline Securities report.

Maple Leaf will most likely receive a ‘green light’ to carry out its planned expansion as the venture lies in the ‘Positive Zone’, the report added.

The under-construction cement line is a $220 million venture, which was expected to be completed by the second half of fiscal year 2019.

Owing to huge demand for cement led by growing infrastructure developments and the China-Pakistan Economic Corridor (CPEC), local manufacturers have announced total expansion of around 25 million tons. Of the total, 13 million tons will be added in the Punjab region.

According to a Sherman Securities report, the fate of cement expansion in Punjab is dependent on two key outcomes. Firstly, it depends on the detailed survey of the salt range by Mines & Minerals Department, Punjab,  and secondly, on the result of Katas Raj Temple case (hearing is on January 19, 2018) in which Supreme Court has summoned representatives of Bestway Cement, DG Khan Cement and Gharibwal Cement.

Analysts say cement manufacturers believe the ongoing cases may delay the upcoming cement expansion in Punjab which were supposed to come online from fiscal year 2019 and onwards.

Published in The Express Tribune, January 19^th, 2018.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.