The Iraq government has sent letters to cement companies in Iraq warning them that unless they comply with capacity agreements they will have their licences revoked.

The letters are part of a concerted effort by the Iraq authorities to ensure that the country’s cement industry is pushing forward with agreed expansion plans.

One of the cement plants to recieve a letter is the Al-Qaim Cement Plant close to the Jordanian border.

“The Iraq government is working closely with all of the companies involved in the country’s cement industry,” a source says. “There was a meeting held in early March with government officials, where all of the cement companies were asked if they needed any help with anything.”

The source adds that the meeting established that most of the cement plant rehabilitations taking in place in Iraq, of which there are about eight in number, are on schedule.

Iraq has a shortfall of about 6 million tonnes a year (t/y) of cement and has to rely on imports from neighbouring countries, such as Turkey and Iran. However, much of the imports are of insufficient quality to be used on certain projects in sectors such as oil and gas.

“A lot of the construction taking place now needs high-quality cement, which is why the Iraq government wants these rehabilitation projects to hit their capacity agreements,” the source says. “Demand as it is means that even if you could immediately build three new cement plants it would still not be met.”

A spokesman from one of the joint venture partners behind the $200m rehabilitation of the Karbala cement plant in Iraq says that the project is on schedule and has now pushed up capacity to 600,000 t/y,

“We are on schedule and the fact that it has increased production to such a level means that it wasn’t in that bad a condition,” he says. “There is still a lot of work left to do, but we are confident we can bring the project in on budget and on schedule.”

The Karbala rehabilitation is due to be complete by 2013 and will have a capacity of 2 million t/y.

If all the existing cement plants in Iraq are rehabilitated, production will increase to about 15.4 million t/y. Another 25 million t/y of capacity will be added if all the new cement projects planned are built (MEED 28:1:11).