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The deal is even sweeter for Holnam, providing the company access to an estimated 2 billion tons of high-grade limestone at the site, enough rock to mine for well over a century. The facility will include a harbor, barge-fleeting terminal and railroad spur. Talks are under way with the Missouri Department of Transportation with regard to building a highway interchange on nearby I-55 that would serve the plant. The adjacent cement kiln, which is tentatively scheduled to be fired up in late 2003 or early 2004, would have the capacity to manufacture 10,000 tons of cement daily, or approximately 3 million tons a year, making it the largest cement facility in North America.
"We're talking about one kiln that's almost double the size of any existing kiln (in the U.S)," says William Toal, a spokesman for the Portland Cement Association in Chicago, an industry group. "There are only three plants in the world that are that big. Two of them are in Korea, and one is in Thailand." By comparison, Holnam's cement plant in Clarksville, Mo., has an annual output of 1.2 million tons.
That Holnam takes its directions from corporate headquarters in Switzerland is not unusual. Cement is a global commodity; approximately 80 percent of the industry in this country is controlled by foreign interests, including a few huge European firms. Currently, domestic production, which is operating at full throttle, is still exceeded by demand. Foreign suppliers unloaded 28 million tons of imported cement this year. That amount represents more than a third of the nation's annual cement consumption. "A few years ago, it was running at 7 million tons," Toal says. "So we're bringing in lots of cement. That was the short-term solution, because the construction markets in the U.S. economy have been very, very strong. It's really been hitting on all cylinders."
With residential housing starts leveling off because of recent interest-rate increases, however, the cement industry is counting more on the public-works sector to keep it busy in the future, Toal says. "Public works" is, for the most part, another way of referring to highway construction. Much of the domestic cement-production increases taking place are tied to the passage by Congress in 1998 of the Transportation Equity Act for the 21st Century, otherwise known as TEA-21. The legislation allocates $218 billion for federal highway construction over a six-year period.
To meet this need, the industry anticipates adding an additional 30 million tons of new capacity, with the Show-Me State targeted for massive expansion in production levels. "It's sort of scary when you look at the possible additional capacity for Missouri," says Toal. "As of 1999, the capacity was 4,497,000 tons. If all these projects came about, capacity (in Missouri) would increase to 11,663,000 tons." In addition to the Holnam facility, Continental Cement has announced plans to build a 1.3 million-ton plant in southern Ste. Genevieve County. As it stands, Missouri already ranks fourth among cement-producing states on the basis of clinker volume. Clinkers are the gray pellets produced when limestone is baked in a cement kiln at 2,800 degrees Fahrenheit.
But there are critical consequences to Holnam's proposal, and key agencies are objecting to it. The U.S. Environmental Protection Agency and U.S. Fish and Wildlife Service are both on record as opposing the project. And the Missouri Department of Resources is leaning against it, citing concerns about air quality.
In a Nov. 9 letter to Holnam's project manager, DNR warned that the proposed cement plant could cause ozone levels to jump, thereby jeopardizing the agency's elusive goal of bringing the St. Louis area into compliance with federal Clean Air Act standards. Nitrogen oxide (NOx) is a major component of ozone. According to Holnam's own calculations, its cement kiln would spew forth more than 7,000 tons of the pollutant annually.
Ozone damages lung tissue, aggravates respiratory illnesses and fosters respiratory infections. Long-term exposure causes irreversible changes to the lungs, leading to premature aging and chronic respiratory diseases, according to the EPA, which delegates responsibility for enforcing the Clean Air Act to state regulatory agencies -- in this case, the Missouri DNR. Missouri has failed to comply with the statute for more than a decade. This has resulted in a federal lawsuit filed by the Missouri Coalition for the Environment because EPA has failed to downgrade the St. Louis area's status to "serious" nonattainment. Automobile exhaust and industrial emissions are the primary causes of ozone pollution.
DNR has been making attempts to clean up the air through various initiatives, including the enhanced automobile-inspection program. Though some improvements in air quality have been made lately, a single pollution source -- in this case, Holnam's proposed cement kiln -- could prevent the state from reaching its goal. Ultimately, hundreds of millions of dollars in federal highway funds could be withheld from Missouri if the EPA decides to penalize the state. Business groups, including the Regional Chamber and Growth Association and Associated Industries of Missouri, have been lobbying against such sanctions for years. In addition, if the St. Louis area were to be categorized as a "serious" nonattainment zone, it would result in the imposition of stricter and more expensive industrial-pollution controls that could discourage new businesses from starting up in the region.
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