Tsunami Donor Adb Reports 2006-12-00

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Summary Environmental Impact AssessmentProject Number: 39932-01

December 2006

Indonesia: Reconstruction of Cement ProductionFacility in Aceh Project

Prepared by PT Semen Andalas Indonesia for the Asian Development Bank (ADB).

The summary environmental impact assessment is a document of the borrower. The views expressedherein do not necessarily represent those of ADBs Board of Directors, Management, or staff, and maybe preliminary in nature.

Environmental Assessment Report


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CURRENCY EQUIVALENTS

(as of 6 October 2006)

Currency Unit rupiah (Rp)Rp1.00 = $0.000109

$1.00 = Rp9,212.5

ABBREVIATIONS AND INDONESIAN TERMS

ADB Asian Development BankAMDAL analisis mengenai dampak lingkungan

(environmental impact assessment process)ANDAL analisis dampak lingkungan

(environmental impact study report)BOD biochemical oxygen demandCO carbon monoxideCO2 carbon dioxideCOD chemical oxygen demandEMP environmental management plan

EPC engineering, procurement, and constructionHSE health, safety, and environmentkabupaten regencykecamatan districtkelurahan subdistrictNOx nitrogen oxidesRKL rencana pengelolaan lingkungan

(environmental management plan)RPL rencana pemantauan lingkungan

(environmental monitoring plan)SAI PT Semen Andalas IndonesiaSEIA summary environmental impact assessment

SO2 sulfur dioxideTSP total suspended particulates

WEIGHTS AND MEASURES

g microgramC degree CelsiusdBA decibel adjustedha hectareKcal kilocalorieskm kilometerl liter

m meterm2 square meterm3 cubic metermg milligrammm millimeterMMTPA million metric tons per annumMW megawattNm3 normal cubic meterpH measure of acidity and/or alkalinityt metric ton


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GLOSSARY

ambient Referring to existing or predominant conditions.biochemical oxygendemand

The amount of dissolved oxygen that microorganismsneed to decompose soluble organic matters inwastewater.

cement A powdery product made from limestone and smallamounts of other raw materials, heated to formclinker, which is then ground to a powder with smallamounts of gypsum and other additives.

chemical oxygen demand The amount of oxygen needed to oxidize organicmatter in wastewater under acidic conditions.

circulating fluidized bedcombustion

A clean coal technology process that produces amixture of coal and limestone in a liquid state byvertically moving air. The process effectively removessulfur and nitrogen from coal, thus reducing sulfurdioxide and nitrogen oxide from coal-burningemissions.

clinker A hard substance produced in cement kilns, which isground with gypsum and other additives to makecement.

greenhouse gas Any gas that contributes to the greenhouse effect,which is implicated in global warming. The major onesare carbon dioxide, methane, and sulfur dioxide.

gypsum A naturally occurring mineral, hydrated calciumsulfate.

Hardgrove GrindabilityIndex (HGI)

An index of how easily a coal can be pulverized foruse in power plants. A low HGI (< 50) is consideredhard to pulverize.

limestone A naturally occurring rock, primarily composed of

calcium carbonate, often containing trace amounts ofother minerals.

nitrogen oxide (NOx) Oxides of nitrogen, the sum of nitric oxide (NO) plusnitrogen dioxide (NO2). Although other oxides ofnitrogen occur, such as nitrous oxide (N2O), they arenormally excluded from the definition of NOx.

shale Shale is a fine-grained sedimentary rock whoseoriginal constituents were clay or mud.

siltstone Siltstone is a geological term for a sedimentary rockwhose composition is intermediate in grain sizebetween the coarser sandstone and the finermudstone. It contains mostly oxides of silicon,

aluminum, iron, potassium, and calcium.

NOTE

(i) In this report, "$" refers to US dollars.


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CONTENTS

Page

MAPS

I.

INTRODUCTION 1

II. PROJECT DESCRIPTION 2A. Need for the Project 2B. Project Scope 2C. Resources Requirement 3D. Implementation Arrangements 4

III. DESCRIPTION OF THE ENVIRONMENT 4B. Project Area 5C. Physical Environment 5D. Biological Environment 9E. Socioeconomic Environment 10G. Sociocultural Environment 10

IV. ALTERNATIVES 10A. Project Alternatives 10B. Alternative Water Sources 10C. Alternatives for Power Generation 11D. Alternatives for Fuels 11E. Alternatives for Process Technology and Major Equipment 11

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 12A. Environmental Standards and Guidelines 12B. Environmental Impacts During Construction 12C. Environmental Impacts During Operations 14D. Health and Safety Aspects 20E. Land Resettlement 21F. Compatibility of the Project with Other Development Projects in the Area 21G. Induced Development 21H. Decommissioning 22

VI. ECONOMIC ASSESSMENT 22VII. ENVIRONMENTAL MANAGEMENT PLAN 23

A. Mitigation Measures 23B. Environmental Monitoring 23C. Environmental Policy 23D. Emergency Response Plan 23E. Implementation of the RKL and RPL 24

VIII. PUBLIC CONSULTATION AND DISCLOSURE 24A. Public Consultation 24B. Enhancement of Public Communication 26

IX. CONCLUSIONS 27


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Appendixes1. Cement Production Process 282. Project Implementation Schedule 323. Project Implementation Team Organization 334. Operation and Maintenance Organization Chart 345. Calculation of SO2 Emission 35

6. Summary of Environmental Management Plan During Construction 367. Summary of Environmental Management Plan During Operations 378. Summary of Environmental Monitoring Plan 389. Lafarge Group Environmental Policy 39


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I N D I A N O C E A N

S o u t h C h i n a S e a

A n d a m a n S e a

Straits of

Malacca

J a v a

S e a

PROJECT SITE

KUALA LUMPUR

Pekanbaru

Tanjung Pinang

Batam

Padang

Jambi

Palembang

Pangkal Pinang

Bandar Lampung

Bengkulu

MedanBelawan

Dumai

Nias Island

Simeulue Island

Siberut Island

Pagai Islands

BandaAceh

LhokngaLhokseumawe

Kuan

RIAU ISLANDS

NORTH

SUMATRA

R I A U

WEST

SUMATRA

J A M B I

SOUTH SUMATRA

BENGKULU

LAMPUNG

NANGGROE ACEHDARUSSALAM

BANGKA-BELITUNG

Langkawi Island

Pinang Island

S U M A T R A

I N D O N E S I A

MALAYSIA

SINGAPORE

THAILAND

MYANMAR

National Capital

Provincial Capital

City/Town

PT Semen Andalas Indonesia Terminal

PT Semen Andalas Indonesia Cement Plant

Lafarge Malayan Cement Berhad Terminal

Lafarge Malayan Cement Berhad Cement Plant

National Road

Provincial Boundary

International Boundary

Boundaries are not necessarily authoritative.

INDONESIA

RECONSTRUCTION OFCEMENT PRODUCTION FACILITY IN ACEH

Kilometers

0 50 100 150 200 250

N

06-3740a HR

Map 1

0o

0o

104 00'Eo

104 00'Eo

98 00'Eo

98 00'Eo

8 00'No

8 00'No

4 00'So

4 00'So


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Jetty No. 2

Jetty

No.1

WaterPool

Packing PlantCement Silo

Main Office

NewClinker

Silo

ExistingClinker Silo

Power Plant

to Quarry 1

t o Q u a r r y

2

Main Substation

ComposerRoom

Power Station forCement Grinding

Pre-grinding for Clinker

LimestonePreblendingBed

SiltstonePreblendingBed

Raw Materials Mixing

MechanicalShop

Pre-heaterand Calciner

WareHouse

WaterPump

Weigh Bridge

Kiln

CustomerOffice

toMe

ulabo

h

toBa

ndaA

ceh

Limestone Crusher

Siltstone Crusher

Fence

INDONESIA

RECONSTRUCTION OF

CEMENT PRODUCTION FACILITY IN ACEH

LHOKNGA CEMENT PLANT

N

06-3740bHR


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I. INTRODUCTION

1. The tsunami that struck Banda Aceh in North Sumatra, Indonesia, on 26 December2004 extensively damaged the cement plant of PT Semen Andalas Indonesia (SAI)1 in MonIkeun Village, Kacematan Lhoknga, Kabupaten Aceh Besar, Nanggroe Aceh DarussalamProvince, about 17 kilometers (km) from Banda Aceh City (Map 1). SAI has ceased cement

production, instead importing cement from a Lafarge-affiliated producer in Malaysia to maintainits market share, which was about 31% in its target markets in North Sumatra before thetsunami. After assessing prospective cement demand in the region, as well as the damage to itsproduction facilities, SAI formulated a project to rehabilitate its cement plant and supportfacilities (the Project), and to increase production capacity to 1.6 million metric tons per annum(MMTPA) from the old plants 1.4 MMTPA. The rehabilitated cement plant will have moremodern production and environmental control facilities. To implement the Project, SAIapproached the Asian Development Bank (ADB), Deutsche Investitions- undEntwicklungsgesellschaft mbH, Nederlandse Financierings Maatschappij voorOntwikkelingslanden N.V., and Socit de Promotion et de Participation pour la CooprationEconomique about providing financial support.

2. To obtain environmental clearance for the Project from the Government of Indonesia andthe provincial government, SAI engaged a team of consultants2 to conduct an environmentalimpact assessment (EIA) from March to June 2006. The EIA followed the requirementsstipulated in the relevant national and provincial laws and regulations regarding the analisismengenai dampak lingkungan (AMDAL) (environmental impact assessment process). Inparticular, the EIA was in accordance with the regulations promulgated by the state minister ofenvironment, No. 308 of 2005, on environmental impact assessment for rehabilitation andreconstruction of Aceh after the earthquake and tsunami. Based on the AMDAL documents, theMinistry of Environment granted the Project environmental and social clearance on 16 August2006.

3. This summary environmental impact assessment (SEIA) of the Project has been

prepared for use by ADB in its internal review of environmental aspects of the Project.3

TheSEIA captures essential information presented in the three AMDAL documents: (i) the analisisdampak lingkungan(ANDAL) (environmental impact study report), (ii) the rencana pengelolaanlingkungan (RKL) (environmental management plan), and (iii) the rencana pemantauanlingkungan(RPL) (environmental monitoring plan). It also incorporates the latest developmentson project implementation and some additional analyses. The SEIA follows the structureoutlined in ADBs Environmental Assessment Guidelines (2003).4 However, the SEIA alsoupdates information on project implementation, rectifies the results of air pollutant predictions inthe ANDAL, and provides the following additional information requested by ADB: (i) calculationof the amount of carbon dioxide (CO2), (ii) marine biological resources, (iii) environmentalimpact assessment of the captive power plant, (iv) economic assessment, and (v) assessmentof the Projects complementarities with other development projects in the project area.

1SAI is a subsidiary of the Lafarge Group, a world-leading producer of construction materials based in France withaffiliated companies in several countries.

2CV. Cipta Puga

3ADB classified the Project for its environmental review as category A, i.e., a project with significant impacts if notadequately mitigated.

4ADB. 2003. Environmental Assessment Guidelines. Manila.


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II. PROJECT DESCRIPTION

A. Need for the Project

4. Based on a detailed study conducted by SAI, the Project is justified on the followinggrounds:

(i) Producing cement in Aceh will be more economical than importing cement fromMalaysia due to high transportation cost relative to the cement cost.

(ii) Rehabilitation of the damaged facilities would be more cost-effective thanconstructing a new plant. While the project cost is estimated at $159 million, thecost of a new cement plant would be $190 million$200 million. The savings ofabout $30 million$40 million would be realized through repair and rehabilitationof some of the damaged equipment and structures of the existing complex.

B. Project Scope

5. The Project will reconstruct the damaged cement production and support facilities tocreate a modern and integrated cement production complex with an annual production capacityof 1.6 MMTPA, or an average daily production of about 4,650 metric tons (t). The environmentalperformance of the reconstructed plant will be better than the old plant.

6. The project scope of physical development does not include the rehabilitation of thecoastal road in front of the complex, as it is a public road that is being upgraded with assistancefrom US Agency for International Development. The scope of physical development is outlinedin paras. 7-10.

1. Quarries

7. Before it ceased production, SAI operated its own quarries for limestone, and siltstone

and shale. The limestone quarry covers 79.9 hectares (ha) adjoining the cement plant. Thesiltstone and shale quarry covers about 63.3 ha, about 3 km from the cement plant. Thelimestone quarry site has proven reserves of 41.5 million t, which is adequate for 32 years ofproduction. The shale quarry site has proven reserves of 10.3 million t (130 years production),while the siltstone quarry site has 13.9 million t (43 years production). SAI will acquire the landuse rights for an additional 50 ha of the limestone quarry to improve efficiency and safety ofquarrying operations, and to enhance the limestone reserves by 31.4 million t (24 years ofproduction).

2. Cement Plant

8. The Project will rehabilitate and modernize the damaged cement plant. The

reconstruction works will entail refurbishing existing facilities and equipment, and installing thefollowing new equipment and facilities:

(i) conveyor systems within the cement plant,(ii) limestone crusher plant,(iii) raw mill system,(iv) preheater and horizontal rotary kiln,


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(v) packing plant,5(vi) bag filters to replace the electrostatic precipitator and gravel bed filters,(vii) grate cooler,(viii) electrical system, and(ix) instrumentation and control system.

3. Power Generation Plant

9. The Project will construct a new 32-megawatt (MW) coal-fired power plant to replace thedamaged 31 MW power plant using diesel generators. Circulating fluidized bed technology, aclean coal technology that is being widely used, will be adopted.

4. Port

10. SAI has an exclusive port for its own shipping needs. The port covers 1.17 ha and hastwo jetties. The main jetty has a 200-meter (m) berth capable of handling ships up to 10,000dead weight tons. The water depth at the port is about 14 m. SAI has rehabilitated the main

jetty. The reconstruction of the other jetty will be covered under the Project. No dredging will be

required during construction or operation.

C. Resources Requirement

11. Table 1 summarizes the important information on the materials required for the operationof the cement plant.

Table 1: Material Requirements for Cement Production

Material Quantity(MMTPA)

Source

Limestone 1,430,000 Own quarrySiltstone 372,000 Own quarry

Shale 118,000 Own quarryPozzolan 280,000 Supplier, KruengRaya (Raya River)Iron sand 21,000 Supplier, LamteubaGypsum 64,000 Supplier, ThailandCoal 378,538 Supplier, Sumatra and KalimantanExplosive 250 Supplier, TasikmalayaDiesel oil 8,000 Supplier, SigilMMTPA = million metric tons per annum.Note: Coal consumption for kiln 196,320 tons per year and power station 182,218 tons per year.Source: PT Semen Andalas Indonesia.

12. The cement plant also requires about 1,200 cubic meters (m3) per day of water fordomestic and process consumption. The raw water will be pumped from KreungSarah (Sarah

River) in Kecamatan Leupung, about 10 km from the cement plant, and will be conveyedthrough a 6-inch pipe buried about 0.8 m below ground on the existing route. This raw waterand pipeline route will be the same as those used in the past.6 Appendix 1 presents a simplifiedmass balance diagram of the cement production, including the power plant.

5The construction of the packing plant and a conveyor system from the port to the plant in Lhoknga is nearlycompleted and not included in the Project.

6SAI obtained a permit from the local authority to lay the water pipe.


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4

D. Implementation Arrangements

1. Schedule

13. The rehabilitation of the main jetty, which SAI began in May 2005, was completed inAugust 2006. The construction of the packing plant in Lhoknga is nearly completed. The

remaining rehabilitation works to be carried out under the Project have begun, and will takeabout 22 months to complete. Commercial operation is scheduled in October 2008. A tentativeproject implementation schedule is in Appendix 2.

2. Contracts

14. The Project will be implemented through three major contracts. SAI has completed theinternational competitive bidding of the contracts with the assistance of Holtec, an Indianengineering company. The scope of each contract is outlined as follows:

(i) Supply and installation of new equipment, and repair of existing equipment forthe cement plant if it is more economical. SAI selected Hefei Cement Research

and Design Institute as the supplier. The contract was signed in October 2006.(ii) Supply and installation of the power plant. The engineering, procurement, and

construction (EPC) contract has been awarded to China Huadian EngineeringCompany for the duration of about 20 months. The contract was signed inSeptember 2006.

(iii) Construction of buildings and civil works structures, and removal of damagedequipment. The civil works contract is expected to be awarded by December2006.

3. Project Management

15. SAI will have overall responsibility for project management, with technical assistance

from Lafarges Asian Technical Center in Kuala Lumpur, Malaysia. Lafarge will be responsiblefor planning, engineering, scheduling, and construction supervision in collaboration with theproject team of SAI. The organization of the project implementation team is in Appendix 3.

4. Operations

16. After completion of the project facilities, SAI will be responsible for operating them. Theoperation of the new cement plant will require about 300 staff, including 24 managerialpersonnel, 46 engineers and technical specialists, 157 operators, and 73 workers. Training willbe provided as appropriate to update the staff on the technologies adopted in the newproduction plant. The organizational structure is in Appendix 4. Operation and maintenance ofthe captive power plant might be contracted out.

III. DESCRIPTION OF THE ENVIRONMENT

A. Data Collection

17. Information and data used in establishing the baseline environmental conditions wereobtained from secondary and primary sources. The data on physical characteristics andbiological resources of the project area were collected from various secondary sources. Thedata on air and water quality were collected from primary sources during the EIA. For ambient


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air quality, air samples were collected and analyzed using the equipment and methods shown inTable 2.

Table 2: Method and Equipment Used in Collection of Data on Ambient Air Quality

No. Parameter Analysis Method Equipment

12345

NoiseDust

Sulfur DioxideNitrogen Oxide

Carbon Monoxide

On-Site MeasuringGravimetri

PararosanilinSaltzman

Direct Reading

Sound Level MeterHigh Volume SamplerAir Pollutant SamplerAir Pollutant Sampler

Dradger ApparatusSource: CV. Cipta Puga

B. Project Area

18. The project area is about 172 ha, comprising the port (1.2 ha), limestone quarry (79.9ha), siltstone and shale quarry (63.3 ha), cement plant site (17.0 ha), and housing area (10.6ha).7 The cement plant site is in Mon Ikeun Village between the coastal road and the limestone

quarry, a distance of about 900 m. The port is on the other side of the coastal road, opposite thecement plant. The limestone quarry is in Wue Raya Village adjacent to the cement plant. Thesiltstone and shale quarry site is in Naga Umbang Village, about 3 km from the cement plant.

19. The cement plant site is on the coastal road from Banda Aceh to Meulaboh. Theshoreline in front of the cement plant site is rocky and blocked by a hill. The port is built on thisrocky coast besides the hill. The adjacent beach is still undeveloped as a tourist area, althoughsome local people occasionally use the beach for recreation. Several houses, which were builtafter the tsunami, are scattered in the area contiguous to the cement plant.

C. Physical Environment

1. Land Use

20. The project site is within the administrative area of Kecamatan Lhoknga. Based on thelatest available information (2003), the land is mixed-use with no known protected ecological orcultural sites. Of the total area of 9,893 ha, agricultural use accounted for about 56.5% (5,586ha), human settlements about 2.54%, (252 ha), and others 41% (4,055 ha). With a population of20,444 in 2004, the area had a gross population density of about 89 persons per squarekilometer (km2). The population declined significantly after the tsunami.

2. Seismic Activities

21. Aceh Province is seismically active. In the past 170 years, seven major earthquakeshave been recorded north and west of Aceh, and have triggered tsunamis.

3. Water Resources and Water Quality

22. The project area has only one main river, Krueng Raba. The river is short with weakflows, and water is brackish due to seawater intrusion. Consequently, SAI has to take water

7 The housing area was part of the project area, but was destroyed by the tsunami. SAI does not plan to constructnew housing facilities in the project area.


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from Krueng Sarah in Kecamatan Leupung, the same water source used by the old cementplant.

23. During the EIA, water samples were taken from Krueng Sarah, Krueng Raba, coastalwaters near the port, and about 100 m from the coastal road. Samples also were taken from thegroundwater well within the cement plant site. The following conclusions can be drawn from the

water quality data (Table 3):

(i) Krueng Sarah is still relatively clean, as indicated by its high dissolved oxygenand low biochemical oxygen demand (BOD58) values, and the absence of toxicpollutants.

(ii) Krueng Raba is relatively polluted, as indicated by its high BOD5 and chemicaloxygen demand (COD) value. Its conductivity is also high due to seawaterintrusion. The water is not suitable for drinking and industrial use.

(iii) Groundwater within the plant site and in the village is relatively clean.(iv) Seawater is still relatively clean, as indicated by its high dissolved oxygen and

low BOD5 levels.

Table 3: Water Quality in the Project Area

Parameter UnitKruengSarah

KruengRaba Groundwater Seawater

LhokngaWell Water

Turbidity NTU 6 12 32 2 10SuspendedSolids

mg/l 10.0 23.0 2.3 4.0 6.8

Temperature C 28 29 28 29 29Color Pt Co

standard5 12 4 10 4

Ph 7.8 8.0 7.7 8.1 7.6Conductivity micro mhos

per cm430 1,900 800 13,500 700

DissolvedOxygen

mg/l 6.0 4.8 3.5 5.9 3.5

BOD5 mg/l 5.0 20 4.0 8.6 9.8COD mg/l 11.2 31.6 16 22 20Ammonia-N mg/l ND 0.05 0.5 0.02 0.02Nitrite-N mg/l 0.02 0.05 0.05 0.01 0.01Chloride mg/l 20 460 40 1,200 200Sulfide mg/l ND ND 0.1 ND NDOil and Grease mg/l ND ND ND ND NDDetergent mg/l ND ND ND ND NDIron mg/l 0.1 0.1 0.2 0.1 0.1Manganese mg/l ND ND 0.1 ND 0.05Silver mg/l ND ND ND ND NDCopper mg/l ND 0.1 0.5 ND 0.05Cadmium mg/l ND ND ND ND NDChromium mg/l ND ND 0.1 ND ND

Arsenic mg/l ND ND ND ND NDZinc mg/l ND 0.8 ND 0.01 0.5Lead mg/l ND ND ND ND NDNickel mg/l ND ND ND ND NDBOD5 = biochemical oxygen demand, C = degree Celsius, COD = chemical oxygen demand, micro mhos per cm= units of conductivity, mg/l = milligram per liter, N = nitrogen, ND = not detectable, NTU = nephelometric turbidityunit, pH = measure of acidity, Pt Co standard = platinum cobalt standard (units of color).Source: PT Semen Andalas Indonesia.

8 The amount of biological oxygen demand (dissolved oxygen consumed by microorganisms in water) measured at20 degree Celsius over a period of 5 days.


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4. Climate

24. The project area has distinct rainy and dry seasons. Based on the climate data from1995 to 2004, collected at a weather station in the project area, the conditions can besummarized as follows:

(i) Ambient air temperature is fairly uniform throughout the year, varying from 20and 31 degrees Celsius (C).

(ii) The rainy season covers 6 months from October to March. The 10-year averageannual rainfall was about 1,500 millimeters (mm), ranging from 1,084 to 1,907mm.

(iii) The air is humid, with relative humidity varying from 75% to 94%.(iv) Wind directions and speeds are as follows:

(a) The west-to-east direction is dominant at 47.5% occurrence (i.e., from thesea to the hill at the back of the cement plant), with wind speeds of 716knots (3.618.23 m per second);

(b) The north-to-south direction occurs about 22% (i.e., from the cementplant to Leupung village, about 10 km away), with wind speeds of 713

knots.(c) The east-to-west direction occurs about 5% (i.e., from the plant to the

sea), with wind speeds of 813 knots.(d) The south-to-north direction occurs about 9.2% (i.e., from Lhoknga

village, 5 km north of plant, to the plant), with wind speeds of 717 knots.

25. The wind data indicate that the two villages would not be affected by gaseous emissionsfrom the cement plant due to the significant distance and the wind directions.

5. Air Quality

26. Ambient air quality was measured during the EIA at five locations: (i) on the side of the

coastal road, about 400 m in front of the cement plant; (ii) an area about 500 m north of thecement plant; (iii) Naga Umbang Village, about 4 km from the cement plant; (iv) Lhokngaschool, about 1.5 km from the cement plant; and (v) a location in Banda Aceh city, about 17 kmfrom the cement plant. Air samples were collected continually over 24 hours. The air qualityparameters measured were nitrogen oxides (NOx), sulfur dioxide (SO2), carbon monoxide (CO),and total suspended particles. Table 4 presents the results of air quality measures. Based onthe national air quality standards and World Banks Guidelines, ambient air at the five samplingstations was relatively clean. The Banda Aceh station had a relatively higher level of CO as thearea had more traffic.


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Table 4: Ambient Air Quality(g/m3)

Parameter Station(i)

Station(ii)

Station(iii)

Station(iv)

Station(v)

NationalStandard

a

World BankGuidelines

b

24 HoursSO2 20 10 10 10 20 356 150

NOx 25 ND ND ND 35 150 150CO 100 40 40 20 1,371 10,000 TSP 90 60 30 40 147 230 230

= not available, g/m3 = microgram per cubic meter, CO = carbon monoxide, ND = not detectable, NOx = nitrogenoxide, SO2 = sulfur dioxide, TSP = total suspended particulates.a National standards are 24-hour standards, as stipulated in Government Publication No. 41 of 1999.b

World Banks guidelines are from World Bank. 1998. Pollution Prevention and Abatement Handbook. Washington,DC.

Source: PT Semen Andalas Indonesia.

6. Noise

27. Noise levels also were measured during the EIA at the same five locations selected for

the air quality measurements. The measurement at each station was done in one day at 8 a.m.,1 p.m., 3 p.m., and 7 p.m. During each measurement, the noise level was read five times at 10-minute intervals. The readings then were averaged to give the representative noise level of thatmeasurement. Table 5 presents the results of the noise measurements. The figures indicatedthat the noise levels at the first four stations were acceptable when compared with the 24-hournational standards of 70 decibel adjusted (dBA) for an industrial area and 55 dBA for residentialareas. The noise levels at the Banda Aceh station mostly did not meet the national standardsdue to heavy traffic and other urban noise-generating activities.

Table 5: Results of Noise Measurements(dBA)

Measurement Station (i) Station (ii) Station (iii) Station (iv) Station (v)1 62 54 49 55 562 78 56 54 43 783 70 53 55 50 844 65 57 50 57 605 75 56 54 45 80

Average 70 55 52 50 72dBA = decibel adjusted.Source: PT Semen Andalas Indonesia.

7. Sea Characteristics

28. Physical characteristics of the coastal waters where the SAI port is located can besummarized as follows:

(i) Average water depth at the SAI port: about 9 m.(ii) Tidal type: mixed tides, semidiurnal type predominant, influenced by tidal

conditions in the Strait of Malacca.(iii) Tidal range: maximum 0.40 m.(iv) Wave height: average 1.26 m.


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(v) Sedimentation and erosion patterns in the vicinity of the SAI port: Similar duringhigh tide and low tide, with small differences in the magnitude of sedimentationand erosion. These patterns suggest that the sedimentation transport in thevicinity of the port tends to be related to long-term erosion due to the smallmagnitude of erosion process.

(vi) Fishing activities in the vicinity of the port: none.

8. Marine Aquatic Resources

29. The project site is on the coastal stretch from Lhoknga to Ujung Ritieng. Limitedinformation on marine aquatic resources in this part of the coastal waters is available in the

Aceh Nearshore Atlas and Draft Zonation Plan, which the Governments Department ofFisheries and Small Islands prepared in March 2006. The salient findings from this documentand discussions with an expert, who conducted environmental studies in the project area, are:

(i) The coastline is white sandy beach fronted by nearshore fringing reefs. The reefsare essentially devoid of any conspicuous macro benthos, and live coral coverwas 0.5%. The substratum is made up of boulders, sand, pavement, and rubble.

(ii) Coarse sands with some hard substratum, such as pavement and rubble,

dominate the seabed habitats that are mapped along the coast out to 3 kmoffshore.

(iii) Fish populations in the area are not well known.9 However, given the poorecological condition of the seabed and the lack of commercial subsistencefishing, aquatic diversity is probably very low with no rare or endangered species.

9. Characteristics of the Quarry Sites

a. Limestone Quarry

30. The limestone quarry covers 79.9 ha, about 500 m behind the cement plant. The quarryarea is dominated by a 240 m hill, which has some small caves that are not inhabited by any

bats or birds. The limestone formation, which is massive and solid, is covered with a thin layerof soil. The extraction of limestone is limited to about 20 m above mean sea level.

31. The limestone formation under the quarry area does not serve as an aquifer rechargedue to its compactness. No water seepage has been observed from the hill during the rainyseason.

b. Siltstone and Shale Quarry

32. The siltstone and shale quarry covers 63.3 ha, and is about 3 km from cement plant. Thearea is uninhabited. The quarrying operation will be limited to 5 m above mean sea level.

D. Biological Environment

33. The project area has no known endangered flora and fauna species. During the EIA,flora and fauna surveys were carried out in (i) areas in front of the cement plant, (ii) areasaround office and houses, (iii) limestone quarry, (iv) siltstone quarry, and (v) some villages.

9According to the Aceh Nearshore Atlas, fish density in the general area of the Project is 2,420 individuals per ha(about 14.56 kg per ha). Snappers are expected to be common (700 individuals per ha), with butterfly fish at 40individuals per ha.


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Flora and fauna species found are common to the region. Flora species found included thoseagricultural plants and naturally grown species, e.g., Eugenia aromatica, Cocos nucifera, and

Areca catechu. Fauna species found include small common mammals, reptiles, andamphibians. The largest mammals are wild boars and monkeys. Examples of dominant faunaspecies are Canis familiaris (dog), Bos taurus (cow), Macaca fascicularis (monkey), Caprahircus (goat), Felis catus (cat), Collocalia sp (punai bird), Callosciurus notatus (squirrel), Anas

sp (goose), Gallus gallus (red junglefowl), and Ardeola speciosa (Javan pond heron).

E. Socioeconomic Environment

34. In early 2004, Kecamatan Lhoknga had a population of 20,444. After the tsunami inDecember 2004, the population declined to 13,577. Of the decreased population, the majority ofwhom were victims of the tsunami. The others presumably moved out after the disaster.

35. Most of the working age people have a low level of education, with only 0.8% receiving asecondary education or higher.

36. The economy of Lhoknga is based on agriculture and fishery, which provides a livelihood

for nearly three quarters (73%) of the population. SAI is the only major industry in the area,employing about 400 people before the tsunami. Data on average household income was notavailable. A rough estimate, based on local knowledge, places the average household incomeat about Rp1.5 million per month.

G. Sociocultural Environment

37. No indigenous people live in the project area. Ethnically, almost all local people areAcehnese. The project area does not have any sites of cultural or historic value.

IV. ALTERNATIVES

A. Project Alternatives

38. In the without Project scenario, SAI would continue to import cement from Malaysia tomeet the demand in Banda Aceh and other places in North Sumatra. The cost of importedcement would be higher than the locally produced cement under the Project. In addition,transportation cost of locally produced cement would be lower, thereby resulting in lowerreconstruction costs of infrastructure. The Project, therefore, is justified by its contribution to thebalance of cement supply and demand in the region.

39. The two project alternatives were considered: (i) construction of new production facilitiesat a new site, and (ii) construction of new production facilities at the existing site. The firstalternative was ruled out due to the time required to find an appropriate new site and the costs.

The second alternative also was ruled out, as it would be more expensive than the rehabilitationof the existing facilities. The Project, as designed, was found to be the most cost-effectivealternative.

B. Alternative Water Sources

40. Krueng Sarah is the only alternative source of freshwater for the Project. The project siteand the nearby areas have no reliable groundwater sources. The Project will continue to takewater from Krueng Sarah. The river discharge during the low flow season is estimated at more


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than 30 m3 per second, or about 2,592,000 m3 per day. The Project will abstract only 1,200 m3per day, an insignificant portion of the total discharge. Therefore, the Project will not competewith water use for agriculture.

C. Alternatives for Power Generation

41. The damaged 31 MW power plant used five diesel generator sets that consumed about90 tons of diesel oil per day. The diesel oil was stored in three tanks, each with a capacity of1,000 m3.

42. The Project opts for a coal-fired power plant using circulating fluidized bed technology.This clean coal technology is more economical, and emits less air pollutants than diesel powerplants and conventional coal-fired power plants. Using a coal-fired power plant also willeliminate the need for diesel oil storage, thus reducing the risk of an oil spill.

D. Alternatives for Fuels

43. Cement production is energy intensive, and the production cost is sensitive to energycost. Coal, which was used in the old cement plant, will continue to be used in the Project asnatural gas is not available in the project area. The Project will use low-sufur coal from Sumatra.Table 6 presents typical characteristics of coal to be used in the Project.

Table 6: Characteristics of Coal to Be Used in the Project

Property Value

Moisture as received, % 20.38Moisture on dried basis, % 10.82

Ash as received, % 10.14Volatile matter as dried free of ash basis, % 28.79

Low heating value, kilocalories per kg 5,5005,804Carbon, % 50.07Hydrogen, % 4.35Oxygen, % 11.15Nitrogen, % 1.02Sulfur, % 0.49Size (050 mm) 90.16Hardgrove Grindability Index 49

kg = kilogram, mm = millimeter.Source: PT Semen Andalas Indonesia.

E. Alternatives for Process Technology and Major Equipment

44. The Project will continue to use the dry process with preheaters and pre-calciners, asthis is the most economical process for large-scale production of cement due to its high energyefficiency.

45. However, the Project has insufficient space to replace the existing ball mill with a verticalclinker mill, which is more energy efficient. In addition, the foundation limits the Project to use ofa four-stage cyclone preheating system instead of the more efficient five-stage cyclone


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preheating system. Because a five-stage cyclone preheating system is taller, it might not beable to withstand lateral ground movements during a major earthquake.

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

A. Environmental Standards and Guidelines

46. The major pollution issue of the cement industry is air pollution. The EIA assessedenvironmental impacts of the Project, and prescribed appropriate mitigation measures to ensurethat its environmental performance will meet the national and international standards andguidelines for the cement industry. The applicable standards and guidelines for air pollutioncontrol are presented in Tables 7 and 8.

Table 7: Emission Standards(mg/Nm3)

Cement Industry Power PlantPollutant

National World Bank National World Banka

NOx 1,000 600 850 850SO2 800 400 750 2000Particulate 80 50 150 100mg/Nm

3= milligram per normal cubic meter, NOx = nitrogen oxide, SO2 = sulfur dioxide.

aThe World Banks guidelines in Pollution Prevention and Abatement Handbook(1998) cover all fossil fuel-basedthermal power plants with capacity of 50 megawatts (MW) or more. For plants smaller than 50 MW, particulateemissions may be as much as 100 mg/Nm

3. If justified by the Executing Agency, particulate emissions up to 150

mg/Nm3

may be acceptable in special circumstances. The maximum emissions levels for NOx remain the sameas for plants larger than 50 MW, while the maximum emissions level for SO2 is 2000 mg/Nm

3.

Sources: PT Semen Andalas Indonesia and World Bank. 1998. Pollution Prevention and Abatement Handbook.Washington, DC.

Table 8: Ambient Air Quality Standards

(g/m3)

Pollutant Averaging PeriodNational

StandardsWorld BankGuidelines

NOx 1 hour24-hour average1 year

400150100

150100

SO2 1 hour24-hour average1 year

90036560

15080

CO 1 hour24-hour average

30,00010,000

Total SuspendedSolids 24-hour average1 year 23090 23080= not available, g/m3 = microgram per cubic meter, CO = carbon monoxide,NOx = nitrogen oxide, SO2 = sulfur dioxide.Source: PT Semen Andalas Indonesia.

B. Environmental Impacts During Construction

47. The Project will involve civil works construction and installation of process equipment.Construction will be confined within the cement plant proper and the quarry sites. Damaged


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equipment and structurealmost all are steel or other metalswill be dismantled and removedto a storage site for eventual sale as scrap.

48. Environmental impacts during construction will be caused by gaseous emissions, as wellas noise from heavy equipment used in the construction and trucks used in transport ofmaterials and equipment. These impacts will be transient and insignificant due to small emission

loads, and will be confined within the construction site.

1. Impact on Ambient Air Quality

49. The EIA predicted the impacts of gaseous emissions on ground-level air quality usingthe standard emission factors for heavy equipment,10 as well as the following data: (i) minimumwind speed of 2 m per second,11 (ii) dispersion at about 2 m above ground; and (iii) local winddirections as observed (para. 24). Based on the Gaussian model12 for the prediction, the use ofheavy equipment would result in negligible incremental increases in various air pollutants in theambient air quality compared with the national standards (Table 9).

Table 9: Predicted Emissions from Heavy Construction Equipment

(g/m3)

Parameter Distance, 200 m National Standard, 24-hour

CO 0.67 10,000NOx 0.51 150SO2 0.53 365Particulates 30.45 230

g/m3

= microgram per cubic meter, CO = carbon monoxide, NOx = nitrogen oxide, SO2 = sulfur dioxide.Source: PT Semen Andalas Indonesia.

50. Water spraying and routine cleaning by road sweepers will control fugitive dustgenerated by construction. These basic practices will be prescribed in the construction

contracts.

2. Noise

51. The noise intensities at various distances from the construction site were calculated, andthe results are in Table 10. The sensitive area is the office building, which is about 100 m fromthe construction site. The results indicate that, if all heavy equipment is operating duringconstruction, the noise level at the office would be about 86.693.0 dBA without noiseattenuation and about 76.683.0 dBA with noise attenuation equipment. SAI will use noisemeasuring equipment to monitor the noise level. Noise reduction measures, such as noiseabsorption walls, will be installed if necessary to reduce noise levels inside the office building.

10Rau, J.G., and D.C. Woolen. 1980.Environmental Impact Analysis. New York: McGraw Hill.

11Minimum wind speed occasionally observed in Banda Aceh.

12 The Gaussian plume model is the most accepted computational approach to calculating the concentration of apollutant at a certain point. This model describes the transport and mixing of the pollutants. It assumes dispersionin the horizontal and vertical direction will take the form of a normal Gaussian curve with the maximumconcentration at the center of the plume.


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Table 10: Noise Intensities at Various Distances from the Construction Site

dBA = decibel adjusted, m = meter.Source: PT Semen Andalas Indonesia.

3. Other Issues

52. Construction will involve about 500 workers on average, about half of whom will belocally hired. The remaining will come from other areas, possibly with their families. The workerswill find accommodations for themselves in nearby villages.

53. Construction will create debris, including damaged equipment that will have to beremoved. Some debris could be sold as scrap. The contractors will need to propose appropriatemethods of disposal of construction wastes. In addition, the contractors will be required to takecare of treatment and disposal of wastes generated by construction workers, such as sewageand solid wastes. For 500 workers, the sewage volume would not be more than 25 m3 per day,assuming per capita water use of 50 liters per day. Solid wastes would not be more than 500liters per day, assuming per capita solid waste volume of 1 liter per day. Sewage would betreated and disposed of using septic tanks. Municipal services will dispose of solid wastes.

C. Environmental Impacts During Operations

1. Quarrying Operations

a. Noise and Vibration from Blasting

54. In quarrying operations, limestone is extracted by blasting using explosives. SAI willchange from electrical detonator to non-electrical detonator to minimize noise, vibration, andflying rocks. The blasting will be conducted daily at noon.

b. Noise from Vehicles and Heavy Equipment

55. The quarrying operations will use about 25 heavy vehicles and equipment (Table 11). Asthe quarries are remote from communities, and the vehicles and equipment will be scatteredaround the site, the noise level at the communities will be below the standards. However, quarry

workers will have to use appropriate noise muffling equipment.

Distance (m) Without Attenuation (dBA) With Attenuation (dBA)

15 103.1109.5 93.199.550 92.699.0 82.689.0

100 86.693.0 76.683.0

150 83.189.5 73.179.5200 80.687.0 70.677.0400 74.681.0 63.671.0500 71.678.0 60.668.0


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Table 11: Heavy Equipment to Be Used in the Quarry

No. Heavy Equipment Noise Intensity (dBA) Number1 Hydraulic Shovel 84 12 Quarry Truck 82 93 Bulldozer 85 24 Road Grader 85 1

5 Rock Drill 86 36 Excavator 87 27 Service Truck 82 38 Front-End Loader 85 29 Supervisor Vehicles 63 2

Total 25dBA = decibel adjusted.Source: PT Semen Andalas Indonesia.

c. Drainage and Soil Erosion

56. Storm runoff from the limestone quarry will drain into the sea via a natural drainagechannel beside the cement plant. The siltstone quarry has a drainage system to divert the storm

runoff into the sea via Krueng Raba. As the surface of the quarry sites is hard rock, soil erosionis not a problem.

2. Cement Plant Operations

57. The major environmental issue of the cement industry is air pollution caused by dust andgaseous emissions. NOx and SO2 are two major air pollutants. Pollutants such as CO, volatileorganic compounds, polychlorinated dibenzodioxins and dibenzofurans, metals and theircompounds, and hydrofluoric acid and hydrogen chloride are of much less concern andnormally not a problem. Hence, the EIA focused on dust, NOx, and SO2.

a. Dust

58. The Project will control dust emissions from various unit operations by adoptingpreventive measures such as:

(i) appropriate process design, e.g., using the exhaust gas from the preheater as adrying medium in the raw mill, and using the hot gas from the grate cooler in thekiln and calciner;

(ii) using low dust-generation equipment if possible;(iii) using enclosed material transport systems;(iv) using dust absorption hoods and air draft deducting devices;(v) adopting best management practices to minimize material dropping in the

process;

(vi) using closed circular silos for storing dusty materials; and(vii) installing water spraying devices in dust generating areas, such as roads andstockpiles of raw materials.

59. The Project will install 42 sets of bag filters as integral process equipment to removedust in the exhaust gases before discharging into the atmosphere (Table 12). The emissions areexpected to be lower than 30 milligrams per normal cubic meter (mg/Nm3), below the WorldBanks guidelines of less than 50 mg/Nm3.


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Table 12: Dust Control Equipment

Capacity Inlet OutletEmission Source

ControlEquipment (m3/hr) (mg/Nm3) (mg/Nm3)

Limestone Crusher Bag Filter 46,000 < 30Shale Stone Crusher Bag Filter 22,000 < 30

Siltstone Crusher Bag Filter 22,000 < 30Raw Meal Blending Silo Bag Filter 26,000 < 30Kiln Feed system Bag Filter 33,000 < 30Preheater Exhaust Bag Filter 520,000 < 80 mg/Nm3 < 30Cooler Bag Bag Filter 480,000 < 30Clinker Silo Bag Filter 13,390 < 30Clinker Silo Discharge Bag Filter 18,000 < 30Gypsum Storage Bag Filter 11,500 < 30Pozzolan Storage Bag Filter 11,500 < 30Pozzolan Dryer Bag Filter 57,000 < 30Pozzolan Dryer storage Bag Filter 4500-6000 < 30Coal Mill Bag Filter 114,000 < 30Cement Mill Bag Filter 13,390 < 30Cement Silo Bag Filter 8,030 < 30Jetty Bag Filter 11,500 < 30Cement packer Bag Filter 14,328 < 30Power Plant Bag Filter 146,000 < 30

m3/hr = cubic meter per hour, mg/Nm

3= milligram per normal cubic meter.


60. The particulate concentrations in the ambient air at various distances from the cementplant were calculated using the minimum wind speed of 2 m per second (Table 13). This showsthat the Project will not create a problem of particulates in the ambient air in the project area.The net ambient concentrations of particulates will meet the national standards and the WorldBanks guidelines of below 230 micrograms per cubic meter (g/m3).

Table 13: Predicted Particulate Concentrations in Ambient Air(g/m3)

Predicted Incremental Increase inTSP Caused by the Operations

of the Cement Plant and Power PlantNet Ambient

ConcentrationsaDistance From the

Plant(kilometers)

BaselineAmbient

ConcentrationsWind Speed

(2 m/sec)Wind Speed

(2 m/sec)

0.5b 90 8.28 98.28

0.5c

60 8.28 68.28

1.5 40 1.45d

41.45

5.0 30 0.13 30.13g/m

3= microgram per cubic meter, km = kilometer, m/sec = meter per second, TSP = total suspended particulates.

a The 24-hour average national standard for TSP is 230 g/m3 and the World Banks guideline is 230 g/m3.b

From first sampling point, which is the coastal road in front of the cement plant.c

From second sampling point, which is an area north of cement plant.d Determined from the interpolation of the predicted incremental increase in TSP in case of 1 km and 2 km from thecement plant.Source: PT Semen Andalas Indonesia.


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b. NOx

61. NOx emitted from the kiln inlet is mainly produced by high temperature combustioninside the kiln. Emissions increase with the operating temperature, the amount of oxygen usedin the combustion or the volume of air used in the combustion, and the reaction time.

62. The Project will have low NOx emission as the pre-calcining kiln will reduce fuelconsumption. Moreover, 60% of the fuel used in the calciner will be burned below 1000Cthetemperature level above which NOx will be generated. The process is designed to keep NOxemissions below the Lafarges and national guideline of 800mg/Nm3. SAI estimates that theemissions of NOx will be less than the World Banks guideline of 600mg/Nm

3. If the WorldBanks guideline is not met, an additional investment will be made in the pre-calciner to ensurethat the NOx emissions will be below that guideline.

63. The NOx concentrations in the ambient air at various distances from the cement plantwere calculated using wind speeds of 2 m per second and 5 m per second (Table 14). Thisshows that the Project will not create a problem of NOx in the ambient air in the project area.The NOx concentrations will meet the national standards and the World Banks guideline of

below 150 g/m3.

Table 14: Predicted NOx Concentrations(g/m3)

Predicted IncrementalIncrease in NOx Causedby the Operations of the

Cement Plant and Power Plant Net Ambient Concentrationsa

DistanceFrom the

Plant(kilometers)

BaselineAmbient


(2 m/sec)Wind Speed

(5 m/sec)Wind Speed

(2 m/sec)Wind Speed

(5 m/sec)

0.5b 25 37 15 62 40

0.5

c

0 37 15 37 151.5 0 127d 51d 127 51

5.0 0 48 19 48 19g/m

3= microgram per cubic meter, m/sec = meter per second, NOx = nitrogen oxide.

aThe 24-hour average national standard for NOx is 150 g/m

3and the World Banks guideline is 150 g/m

3.

bFrom first sampling point, which is the coastal road in front of the cement plant.

cFrom second sampling point, which is an area north of cement plant.

dDetermined from the interpolation of the predicted incremental increase in NOx in case of 1 km and 2 km from thecement plant.


c. SO2

64. SO2 in cement production is generated in coal combustion, as coal used as fuel in thekiln contains sulfur. However, SO2 emissions are normally low as a large portion is absorbed bylime and forms calcium sulfate, which is discharged with clinker and kiln dust. In the circulatingfluidized bed power plant, limestone is injected with coal dust to absorb SO2. Based onexperience, as much as 95% of the SO2 generated can be absorbed, resulting in SO2 emissionsbelow the limit of 400 mg/Nm3. The calculation of SO2 in Appendix 5.

65. The SO2 concentrations in the ambient air at various distances from the cement plantwere calculated using the minimum wind speeds of 2 m per second and 5 m per second (Table


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15). This shows that the Project will not create a problem of SO2 in the ambient air in the projectarea. The SO2 concentrations will meet the World Banks guideline of below 150 g/m

3 and thenational standard of below 365 g/m3.

Table 15: Predicted SO2 Concentrations(g/m3)

Predicted IncrementalIncrease in SO2 Causedby the Operations of the

Cement Plant and Power PlantNet Ambient

Concentrationsa

DistanceFrom the

Plant(kilometers)

BaselineAmbient


(2 m/sec)Wind Speed

(5 m/sec)Wind Speed

(2 m/sec)Wind Speed

(5 m/sec)

0.5b 20 9 4 29 24

0.5c 10 9 4 19 14

1.5 10 38d 15d 48 25

5.0 10 19 8 29 18g/m

3= microgram per cubic meter, m/sec = meter per second, SO2 = sulfur dioxide.

aThe 24-hour average national standard for SO2 is 365 g/m

3and the World Banks guideline is 150 g/m

3.

b From first sampling point, which is the coastal road in front of the cement plant.c

From second sampling point, which is an area north of cement plant.d

Determined from the interpolation of the predicted incremental increase in SO2 in case of 1 km and 2 kmfrom the cement plant.


d. Carbon Dioxide

66. The combustion of coal and the calcination of raw materials, especially limestone, willgenerate CO2, one of the major greenhouse gases. Based on the carbon content of the coaland the raw materials, the amount of CO2 was calculated to be about 1.27 MMTPA for theproduction of 1.6 MMTPA of cement. The CO2 produced will be released to the atmosphere,because an economical CO2 capture technology is not commercially available.

e. Noise

67. A cement plant unavoidably generates noise, especially in grinding operations andblasting in quarrying operations. The Project will not have significant noise impacts on thecommunities, as the nearest community is about 3 km away. Plant operators will be providedwith ear plugs to reduce the noise impacts. In addition, SAI will conduct routine maintenance ofthe engine muffler and grow plants in and around the project site.

f. Domestic Wastewater

68. The Project will employ about 300 people during operations. SAI does not intend to

rehabilitate the staff housing area near the cement plant site, which was destroyed by thetsunami. SAI staff currently reside in Banda Aceh city with housing allowances provided by thecompany. The development of staff housing is not planned. The staff would generatewastewater estimated at not more than 30 m3 per day. Later, a canteen will be built, whichwould increase the wastewater volume to not more than 50 m3 per day. The wastewater will betreated using a septic tank and leaching field system. If staff housing is developed, it would be ina new area and SAI would construct a separate wastewater treatment facility in the staff


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housing area to treat additional volume of wastewater, estimated at not more than 200 m 3 perday.

g. Other Types of Wastewater

69. A closed-circuit cooling water system will be used in the cement production. However, a

small volume of cooling water will need to be discharged from the system to maintain the solidcontent of the cooling water. This spent cooling water will be combined with water filterbackwash from the water treatment plant and a small volume of wastewater from the powerplant, including backwash water from the demineralization plant for boiler water treatment andboiler blowdown13. This wastewater has a high concentration of dissolved solids, which are noteconomical to treat. The combined wastewater will be discharged into the sea. As the sea isalready high in dissolved solids and the wastewater volume is small, the wastewater is unlikelyto change the seawater quality significantly.

3. Power Plant Operations

70. Under the Minister of Environments Decree No. 17, 2001, all power plant projects with

capacities less than 100 MW are exempted from the AMDAL process. SAI obtained permits forconstruction and use of power plant for the cement production.

71. The 32 MW captive power plant will use circulating fluidized bed technology, which emitsfewer pollutants than conventional coal-fired power plants. Crushed coal (612 mm diameter)and limestone are injected into the furnace, and are kept suspended by a stream of upwardlyflowing air. This achieves more complete combustion compared with other technologies. SAI willuse bag filters to control dust. About 5 t per day of limestone will be used to absorb SO2. Thecombustion takes place at 840900C, which is below the level at which NOx is formed. Solidseparators remove particles from the flue gas, which are circulated back into the furnace.Emissions from this type of power plants reportedly are lower than the World Banks emissionguidelines.14

72. The power plant will use a once-through seawater cooling system. About 8,000 m3 perhour of seawater will be pumped into the steam condenser system, and the spent cooling waterwill be discharged back to the sea through a 500 m natural drain. The design of the coolingwater system is based on a maximum inlet water temperature of about 29 C, while the spentcooling water will be about 8C higher than the inlet temperature. By the time the spent coolingwater enters the drain, its temperature is expected to drop by about 12C. An additional drop ofabout 3C would be achieved while it flows through the natural drain. Thus, the temperature ofthe spent cooling water when it flows into the sea would be about 34C higher than theambient seawater.

73. The EIA did not conduct a complex prediction of the thermal plume that would be formed

by the discharge of the warm spent cooling water on the sea surface, mainly because thedischarged water is expected to be only about 3C higher than the ambient seawater. World

9The amount of water that has to be occasionally drained out from a boiler in order to maintain the amount ofdissolved solids in the boiler tubes at a desired level

14The circulating fluidized bed boiler emissions compared to the World Banks emission guidelines: (i) SO2 < 200parts per million (ppm), World Bank 730 ppm; (ii) NOx < 100 ppm, World Bank 365 ppm; and (iii) particulate matter50 mg/Nm

3, World Bank 50 mg/Nm

3. (Source: Kavidass, S. et al. 2000. Why Build a Circulating Fluidized Bed

Boiler to Generate Steam and Electric Power. Presented to POWER-GEN Asia 2000. 2022 September. Bangkok,Thailand.)


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Banks guidelines note that "the effluent should result in a temperature increase of no more than3C at the edge of the zone where initial mixing and dilution take place. Where the zone is notdefined, use 100 meters from the point of discharge when there are no sensitive aquaticecosystems within this distance."15 Since the temperature of the spent cooling water would beonly about 3C higher than the ambient seawater temperature, the water temperature at 100 mfrom the point of discharge will definitely be less than 3C.

74. However, an initial assessment could be made using results of the thermal plumeprediction for the Masinloc coal-fired thermal power plant project in the Philippines financed by

ADB. The 600 MW power plant under this project was to discharge 104,000 m3 per hour ofspent cooling water on the sea surface through an open canal extended 650 m from the shore.The spent cooling water is about 8C higher than the ambient seawater temperature. Thepredicted areas influenced by discharged water with temperatures greater or equal to 3C(World Bank's guidelines) are less than 50 ha on average and do not exceed 50 ha. The areasinfluenced by discharged water with temperatures greater or equal to 1C are 90 ha (average)and 190 ha (maximum).

75. Based on the prediction results of the Masinloc project, even if the temperature of thespent cooling water under this project is about 37C (i.e., no temperature drop in the drain), thedischarge of 8,000 m3 per hour under this Projectabout 13 times less water than the volumedischarged by the Masinloc projectwill affect much smaller areas than the Masinloc project.Though the affected area would not be 13 times smaller than the affected area of the Masinlocproject, a reduction of 9 times would be credible, according to one coastal engineering expert.Therefore, the power plant under the Project would have a thermal impact on the coastal watersin an area not more than 5.5 ha. As the coastal water in front of the Project site is not rich inmarine resources, the disposal of the cooling water would not have significant ecologicalimpacts.

76. In addition to the spent cooling water, the power plant would generate a small volume ofwastewater from the boiler water treatment plant and occasional boiler blowdown. Thiswastewater contains no harmful pollutants, and would be discharged directly back into the sea.16The wastewater will meet national standards and the World Banks guidelines for wastewater.

77. The power plant will generate an estimated 55 t per day of ash. This furnace ash will berecycled back as an additive in cement production.

4. Port Operations

78. Port operations will have no significant impacts as dredging will not be required. Dustthat might be generated by the unloading of coal and cement will be minimized by using acovered conveyor systems. In addition, prevailing wind will carry the dust to the sea. Ships willnot be allowed to dispose of wastes during berthing at the port.

D. Health and Safety Aspects

79. During the construction phase, accidents are the major health and safety concern. SAIscontracts require contractors to implement all standard safety measures required for

15World Bank. 1998. Pollution Prevention and Abatement Handbook. Washington, DC.

16 No fishing occurs near the project site. A special port for fishing boats is located about 15 km from the project site.Fisherfolk usually go far offshore.


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construction, as well as institutionalize a safety management system acceptable to SAI. Further,SAI will appoint a health and safety officer to oversee the contractors compliance with healthand safety clauses in the contracts. The health and safety officer and an assistant will monitorclosely safety-related incidents, and take necessary corrective actions to minimize the numberof incidents.

80. During operations of the cement plant and its supported facilities, health and safetyissues could include (i) exposure to noise, dust, and high temperatures in the cement plant andthe power plant; (ii) contact with allergic substances; and (iii) accidents related to quarryingoperations and cement production.

81. The modernization of the new production facilities will minimize these health and safetyrisks significantly. Individual protective equipment, such as earmuffs for workers in the millingroom, will be mandatory. In addition to these physical measures, institutional measures will beimplemented, including (i) raising the level of health and safety awareness among staff; (ii)establishing an effective health and safety management system; and (iii) implementing safetymanagement measures, including compliance auditing, as an integral element of the health andsafety management system.

E. Land Resettlement

82. The limestone quarry operated by SAI covers 79.9 ha of Government land. SAI plans toacquire the rights to use 50 ha of additional land to ensure safety operations of its miningactivities, and to increase its limestone reserves. Although the land is not inhabited, 18 personshave claimed compensation. SAI noted that these occupants are squatters on public land, whomight have some plots for small crops.17 Only one of these people has a land title certificate.The squatters do not include any indigenous peoples. SAI has been coordinating with localgovernment officials18 to negotiate and finalize a compensation package for the occupants.

F. Compatibility of the Project with Other Development Projects in the Area

83. In general, the Project will support the reconstruction of Banda Aceh by providingcement for construction. As it is funded entirely by the private sector, the Project does notcompete for limited government funds. The US Agency for International Development isrehabilitating the coastal road in front of the project site, regardless of the Project. The Projectwill use its own electricity and water resources, thus not competing for the citys limitedelectricity and water supply. As the adjacent beach is not a tourist attraction, the Project will notharm local tourism.

G. Induced Development

84. At the peak of construction, about 1,000 workers would be needed. Most of these

workers will be recruited from the nearby areas. Temporary quarters, however, will be erectedwithin the plant site for about 100 foreign workers. This will minimize the chance of induceddevelopment, which could cause adverse environmental and social consequences. Otherworkers will be from nearby villages, and will use local transportation to commute between theirresidences and the project site.

17ADB social safeguard and resettlement consultant is currently fielded to assess resettlement impact and preparenecessary report in accordance with ADBs social safeguard requirements.

18Including mayor of Aceh Besar, officers from the Land Office and Lhoknga District, and head of village


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85. During operations, about 300 employees will work in the cement plant and supportfacilities. Based on the experience from the tsunami, which had devastating effects on lives andhousing facilities, SAI does not plan to construct staff housing in the project site. If SAI decidesto provide any staff housing, the location will be away from the project site.

H. Decommissioning

86. The raw materials reserves are adequate for 50 years of cement production. The cementplant would operate over this period, subject to its commercial viability. During this period, theplant would need to be upgraded periodically to benefit from technological developments.

87. Preparation of a definite plan for decommissioning would not be practical during the EIA.The decommissioning of the cement plant is not environmentally sensitive, as no hazardousmaterials are stored or produced. The hilly quarries could be flattened, though plantingvegetation would be difficult due to the thin soil layer. The cement plant site could be convertedto other uses, depending on economic opportunities in the future. The harbor might be usedcommercially.

VI. ECONOMIC ASSESSMENT

88. The project costs include the costs of the following environmental protection equipmentand facilities: (i) bag filters; (ii) low-dust absorption hoods and enclosed silos for storing rawmaterials; (iii) wastewater treatment plant and air pollution control facilities; (iv) water sprayingsystem on exposed areas to suppress dust; (v) safety equipment; and (vi) mobile vacuumcleaner, road sweeper, and water tanker truck. During operations, SAI will allocate an annualbudget of about Rp5.4 billion for environmental monitoring with the Badan PengendalianDampak Lingkungan Daerah (Region Environment Monitoring Body); and for maintenance ofenvironmental mitigation measures, such as bag filter maintenance, plant housekeeping, anddrainage cleaning.

89. The Project has two types of economic benefits: quantifiable and nonquantifiable.Quantifiable economic benefits are resource cost savings from domestic production of cement,replacing imported cement. In addition, the Project will yield nonquantifiable economic benefitsin terms of employment, and will contribute to natural resource-based and constructionindustries.

90. Environmental costs will be related to the residual amounts of dust, NOx, SO2, and otherpollutants. However, as SAI will implement environmental mitigation measures to ensurecompliance with the legal requirements, the residual amounts of pollutants will be small and willnot create significant environmental costs. Quantifying the economic costs of the residualamounts of pollutants is not possible.

91. The economic analysis confirms the economic robustness of the Project. The Projectseconomic internal rate of return is estimated at about 20%.


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VII. ENVIRONMENTAL MANAGEMENT PLAN

92. A comprehensive RKL and RPL were prepared as part of the EIA, as required under theAMDAL regulations. The RKL and RPL also cover social aspects. The context relevant toenvironment is summarized as follows.

A. Mitigation Measures

1. Construction Phase

93. Appendix 6 summarizes major potential environmental impacts during the constructionphase, as well as mitigation measures to be implemented by the contractors and theirsubcontractors. The environmental management requirements are incorporated in the contracts.

2. Operations Phase

94. Appendix 7 summarizes major potential impacts during the operations phase, as well asmitigation measures to be implemented by SAI as part of the operation of the production

facilities.

B. Environmental Monitoring

95. Environmental monitoring under the RPL will include emission and ambientenvironmental quality monitoring. The monitoring requirements are summarized in Appendix 8.SAI will have to submit semiannual environmental monitoring reports to the provincialenvironmental management agency.

C. Environmental Policy

96. SAI will manage the environmental aspects of the Project in line with the Environmental

Policy of the Lafarge Group. The Environmental Policy, last updated in 2003 (Appendix 9),encourages the reduction of greenhouse gas emissions per ton of cement produced.

D. Emergency Response Plan

97. To ensure safety of personnel working in the cement plant and associated facilities, SAIhas prepared a tsunami emergency response plan and evacuation procedures, which includes:

(i) Forming a tsunami response team consisting of (a) tsunami response officer andtsunami coordinator, who will have overall responsibility for tsunami evacuationarrangements and training; and (b) refuge coordinators, who will take control ofeach refuge point in the event of tsunami alarm.

(ii) Educating employees about tsunami warnings, including official, automatic, andnatural warnings.(iii) Identifying areas of safe refuge and posting clear signs to indicate refuge paths

and refuge points. SAI selected a vertical evacuation method to evacuate peopleto higher ground (e.g., rock hills) or high floors in buildings and/or structures(e.g., packing plant, preheater buildings, and siltstone crusher areas).

(iv) Installing tsunami alarm.(v) Training and educating the staff about actions to be taken in case of tsunami and

after tsunami.


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E. Implementation of the RKL and RPL

1. During the Construction Phase

98. SAI will require all contractors to prepare and submit an appropriate environmentalmanagement plan (EMP) tailored to the health, safety, and environmental context of each

contract. The contractors will have to comply with Lafarges environmental requirements. Eachcontractor will have to appoint a health, safety, and environmental (HSE) officer to supervise theimplementation of HSE measures stipulated in the EMP. SAI also will appoint an HSE officer tosupervise the contractors, and to monitor and evaluate their performance. The contractors willinclude in their monthly progress reports a section on the results of implementing HSEmeasures.

2. During the Operations Phase

99. During the operations phase, HSE management will be an integral element of productionmanagement. The tentative organizational structure for the operation of the cement plant andsupport facilities is in Appendix 3. Environmental management will be under the Technical and

Environment Unit, while health and safety aspects will be under the Safety and Health Unit. TheTechnical and Environment Unit will be led by a manager, who will have two staff. The unit willbe responsible for monitoring and evaluating the environmental performance of the cementplant, power plant, quarries, and port. The plant operators will be responsible for routineoperations of the pollution control equipment. Tentatively, SAI will allocate an annual budget ofabout Rp5.4 billion for environmental monitoring.

VIII. PUBLIC CONSULTATION AND DISCLOSURE

A. Public Consultation

100. SAI conducted two public consultations in April 2006. The first was held on 12 April 2006

and the second on 25 April 2006. In addition, SAI visited two local government offices inLeupung on 26 April 2006. As SAI has been operating in the area since 1983, it was able toexpedite the public consultations in the context of this Project.19 A summary of each publicconsultation and the meeting is as follows.

1. Public Consultation on 12 April 2006

a. Place

101. The first consultation was held at a small mosque in Lhoknga village.

b. Number of Participants and Key Participants

102. About 100 participants from Lhoknga attended the consultation. Key participantsincluded district head of Lhoknga (Camat), head of the district police, subdistrict head, villageheads, three SAI representatives, a group of university students at Lhoknga, Lhoknga youthgroup, religious head, religious youth group, Lhokngas people solidarity and awareness group,

19To accelerate the recovery in Aceh and Nias, the Government issued a regulation to simplify the EIA process.Before the preparation of the EIA, a technical team from the Ministry of Environment visited the Project andprovided guidance on the preparation of the EIA together with the terms of reference of the consultant.Subsequently, the consultant prepared a draft EIA that was circulated in the first public consultation.


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community leaders, as well as government officials from the Badan Pengendalian DampakLingkungan Daerah and Agency of the Rehabilitation and Reconstruction for the Region andCommunity of Aceh and Nias.

c. Topics Discussed

103. SAI presented the Project for rehabilitation of cement production facilities, and gave adraft EIA to the participants. The participants expressed their aspiration to rebuild their livesafter the tsunami. They expressed no objection to the reconstruction of SAI cement plant, andasked SAI to consider:

(i) enhancing communication with local people in providing community developmentassistance,

(ii) increasing assistance for local education and development of human resources.(iii) giving preference to local people in employment directly with SAI or with its

contractors,(iv) remaining committed to community development activities with more focused

target beneficiaries,

(v) protecting the environment, and(vi) keeping the local communities informed about its reconstruction effort.

104. Two participants raised two environmental issues based on their perception:

(i) beach erosion thought to be caused by SAIs port, and(ii) damage to the karst ecosystem done by SAIs limestone quarrying operations.

105. For the beach erosion issue, SAI clarified that no data or evidence was available toconfirm the existence of beach erosion, and that the government agencies concerned had neverraised this issue. SAI also informed the meeting that beach erosion occurred naturally in severalcoastal areas in the country during the monsoon season.

106. For the ecological issue, SAI noted that Governments mining department approved thelimestone quarry site, which received environmental clearance based on the AMDAL carried outin 1997. SAI also confirmed that its mining operations strictly complied with all regulations. SAIsaid it would appreciate receiving accurate information on this ecological issue.

2. Public Consultation on 25 April 2006

a. Place

107. The second consultation was held at Banda Seafood restaurant in Banda Aceh.

b. Number of Participants and Key Participant

108. The consultation involved 11 leaders from villages in Kecamatan Lhoknga and Leupung.

c. Topics Discussed

109. Before the second public consultation, SAI and its environmental consultant incorporatedcomments received during the first consultation in the revised draft EIA, which was circulated inthe second public consultation. This public consultation involved only village leaders, including


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those from Kecamatan Leupung. SAI made a presentation, including environmental aspects ofthe Project and its community development activities before and after the tsunami, whichconsisted of vocational training, clinic, and education. After the presentation, SAI was:

(i) advised to verify the boundaries of its land to ensure no encroachment.(ii) advised to pay attention to the encroachment by several small shops and houses

on its land formerly used for staff housing; and to handle this problemappropriately and quickly to prevent conflicts when SAI wants to use the land.

(iii) assured that new settlers along its road to the siltstone quarry would notcomplain when SAI again operates the quarry, as the new houses are far fromthe roadsides.

(iv) asked about the possibility of SAI assistance in providing clean water to villagesin Leupung from its water pumping facilities.

(v) asked to give preference to employing local people.(vi) asked to extend its assistance to more remote villages.

110. No objections were raised on the rehabilitation of cement plant.

3. Visits to Local Government Offices in Leupung on 26 April 2006

111. Two SAI officials visited Office of Kecamatan Leupung to meet with the district head andthe district police head at two separate meetings. At the meetings, the local officials:

(i) welcomed SAIs reconstruction of its cement plant,(ii) asked SAI to provide assistance to rehabilitate Leupung since SAI abstracted

water from Leupung, and(iii) asked SAI to give preference to employing local people.

112. The public consultations and the meetings summarized in paras. 100-111 demonstratethat the public does not oppose the Project. The local communities wanted SAI to consider

providing more community development assistance, enhancing public communication, andgiving preference to employing local people.

113. To assure the public of its environmental concern, SAI will investigate the reports ofbeach erosion and karst ecosystem damage in coordination with the provincial environmentalmanagement agency.

B. Enhancement of Public Communication

114. To comply with ADBs Public Communications Policy,20 SAI will make environmentalmonitoring reports available to affected people, and submit such reports to ADB.21 SAI hasdistributed copies of the EIA to village leaders. In addition, SAI has maintained good

relationships with the communities through community development programs, such as (i)construction of new houses and a mosque, (ii) provision of a mobile clinic, and (iii) vocationaltraining. SAI staff and executives will visit communities to seek their views and suggestions indesigning and implementing community development programs.

20ADB. 2005. Public Communications Policy. Manila.

21 ADB will make environmental monitoring reports that have been disclosed locally to affected people publiclyavailable upon submission to ADB.


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IX. CONCLUSIONS

115. The Project is the most cost-effective alternative to rehabilitate SAIs cement productionfacilities in Banda Aceh. To meet the rising cement demand in North Sumatra, the rehabilitatedcement production complex will have a capacity of 1.6 MMTPA, compared with 1.4 MMTPA forthe old cement facility. The Project will refurbish some facilities and replace severely damaged

equipment.

116. The Project will have no major ecological impacts as it will continue to use the existingcement plant site, as well as the existing quarries for limestone and siltstone and shale. Duringconstruction, dust and noise will be normal environmental disturbances. The Project requiresthe contractors to adopt best environmental management practices during construction tominimize these environmental impacts. Since the project site has no surrounding communities,the residual dust and noise generated by construction will not disturb any communities. Thecontractors will provide appropriate training to their workers in HSE aspects of construction, andwill provide necessary protective measures to the workers to minimize safety risks.

117. The Project will adopt the best process technology and designs, as well as effective

pollution control equipment, to minimize emissions during operations. The emissions will meetnational standards and World Banks emission guidelines for the cement industry. Impacts onambient air quality have been found to be insignificant.

118. To ensure effective environmental control in line with its corporate environmental policy,SAI will establish an appropriate organization and information system for effective managementof the environmental, occupational health, and safety aspects during construction andoperations. The Project has formulated an effective EMP, including a monitoring program, whichthe contractors will implement during construction under the supervision of SAI. Further, SAIpersonnel will implement the EMP during operations as part of the routine and integral activitiesof cement production. The Project will comply fully with relevant national laws and regulationson environment, health, and safety.

119. The Project has no significant land resettlement issue, and will not affect any indigenouspeople. SAI is finalizing land resettlement, which will be based on transparency and faircompensation. The public has been consulted appropriately on the Project. In addition toproviding local employment, SAI will continue and enhance the community developmentassistance it provides to the nearby communities.

120. The Project will not create any environmental benefits. It will consume nonrenewableresources in the area, including limestone (1.43 MMTPA), siltstone (0.37 MMTPA), and shale(0.12 MMTPA). However, these nonrenewable resources are abundant and are not in theprotected areas. Therefore, the economic benefits from the Project will outweigh the loss ofnonrenewable resources.


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28 Appendix 1

CEMENT PRODUCTION PROCESS

A. Production Process

1. Cement has four elementscalcium, silica, aluminum, and ironall of which arecommonly found in limestone, clay, and sand. To make portland cement, these raw materials go

through four processing stages:

(i) crushing at the quarry and then proportioning, blending, and grinding at thefacility;

(ii) preheating before entering the facilitys rotary cement kiln, a long, firebrick-lined,steel furnace;

(iii) heating, or pyroprocessing, in the kiln, which makes the raw materials becomepartially molten and form an intermediate product called clinker; and

(iv) cooling the clinker before grinding it with a small quantity of gypsum to createportland cement.

2. Figure A1.1 shows a general process flowchart for dry process cement production. The

production process is described briefly as follows.

1. Limestone Crushing

3. Limestone is the basic raw material required for the cement production. For each ton ofclinker production, about 1.6 tons of raw material is required. Limestone received from thequarry is crushed in the crushing plant using hammer crushers to reduce the size of limestoneto 70 to 80 millimeters. The crushed limestone is transported by belt conveyor and stacked inpiles. The limestone stockpile is scraped at the end face of pile, and the mixed limestonescraped out is conveyed to a hopper. Like the limestone, other additivesgypsum, shale andsiltstone, and iron sandare stacked into piles, conveyed, and kept in different transit hoppers.

2. Raw Material Grinding

4. The crushed limestone, which is pre-blended with other additives, is pulverized into fineswith a vertical roller mill system. During the process of grinding the fine materials, the dust-ladengas coming out of the system is separated using bag filters or electrostatic precipitators. Theground raw material collected is conveyed and stored in a blending silo. The stored raw mealthen is fine blended using a compressed air aeration system in the blending silo.

3. Coal Grinding

5. Coal is ground in the coal mill by using a vertical roller mill with stringent controlmeasures. Coal mill grinding system is attached with bag filters or electrostatic precipitators to

control the particulate emission.

4. Clinkerization

6. Clinkerization1 is central to main process, called pyroprocessing. It is done by dryprocess technology, which includes a four-stage cyclone preheater, rotary kiln, and grate cooler.

1Clinkerization involves heating a mix of calcium oxide, silicon oxide, aluminum oxide, and ferric oxide at

temperatures over 1,400 degrees Celsius (C) to produce clinker, the main ingredient of cement.


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7. The raw meal is preheated in a sequential arrangement of low pressure drop cyclonesinterconnected by a gas duct. During preheating, various chemical reactions take place, and at

about 7,000C8,000C calcination takes place.

8. The pre-calcined and preheated raw meal is heated further in the rotary kiln by the coal

fuel to a temperature of 14,000C14,500C. At this stage, the raw materials become molten

products called clinker.

5. Grate Cooler

9. The clinker discharged from the rotary kiln is cooled to a temperature of 1,000C bystatic pre-grate cooler. The co

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Tsunami Donor Adb Reports 2006-12-00