Gypsum industry news

Eurogypsum added its views on the European Union’s (EU) proposed Critical Raw Materials Act (CRMA) last month. It wants gypsum to be added to the bill’s list of critical and strategic raw materials. It is not surprising that the European federation of national associations of producers of gypsum products might want to do this. However, when compared to rare earth minerals of the sort required to manufacture batteries for electric vehicles (EV), gypsum doesn’t seem all that, well, rare.

What may be rare though is people’s patience with new gypsum mines. The association’s argument is that gypsum is indeed abundant in the EU but that accessing it is increasingly becoming difficult. The EU’s sustainability agenda has made the energy efficiency of buildings as important as reducing CO₂ emissions from the transportation sector. Gypsum and other materials used to make lightweight building materials are a way of renovating existing buildings and improving energy efficiency. Therefore it suggests that the act should either recognise gypsum as strategic or introduce a new ‘essential’ category. This would then make the process of extracting gypsum more easy.

This approach ties back to initiatives such as one by the Federal Commission on Geosciences (BLA-GEO) in Germany, which previously started to compile an inventory of the nation’s gypsum deposits with the intention of putting this in front of policy makers. Nor is the gypsum sector alone in targeting the potentially lucrative retrofit market. In May 2023 Daikin, Danfoss, Knauf Insulation, Rockwool, Saint-Gobain, Signify and Velux signed an agreement to promote building energy efficiency in Central and Eastern Europe (CEE). Radek Bedrna, Knauf Insulation’s managing director for Eastern Europe and Middle East, noted that two thirds of the 43.6m homes in single- and multi-family houses in the CEE region were reportedly built before 1989 and are energy inefficient. The European Commission places transport-related greenhouse gas emissions at about 25% of the region’s total. Renovating buildings fully, by contrast, could save up to 5% of the EU’s emissions. Targeting transport emissions may be a higher priority for the EU but the savings from retrofitting are not trivial either.

Then - on cue in mid-June 2023 - there was an example of the difficulties gypsum product producers can face with building new quarries or enlarging old ones when expansion plans for a gypsum quarry supporting Placoplatre’s wallboard plant in Chambéry in France were scaled back from local opposition. The subsidiary of Saint-Gobain met similar issues in late 2022 when a public enquiry started examining its plans to build a new quarry at Fort Vaujours, Seine-Saint-Denis. This site is intended to serve the Vaujours gypsum wallboard plant as a replacement for its Bernouille quarry after the latter closes in 2026. This one has a happier ending, for the gypsum sector at least, since the project received an environmental permit in late May 2023. One of the key issues that came up in the enquiry was a disagreement over the means of extraction. A local environmental group favoured underground mining but an open-cast approach was preferred by the producer as it would yield much more gypsum. The latter was eventually approved.

What this suggests is that making gypsum an ‘essential’ raw material in Europe requires engagement with the general public as much as legislators. Some people may not like having a wind farm built near where they live but the chances are that there will be less opposition than building a new coal mine. Digging up new gypsum deposits should be presented as more like the former than the latter. Whizzing around in a new EV is generally seen as being more fun than bragging about how great the lamba factor is for one’s house. However, this may change if energy prices keep ticking upwards. Gypsum may not be rare but Eurogypsum and others can make a strong case for it being essential.

Kazakhstan: Germany-based Knauf has signed a deal with the government of the Zhambyl region to build a gypsum wallboard and dry building mixtures plant. The project has a cost of around Euro30m, according to InterFax. Completion is scheduled by 2026. Local subsidiary Knauf Gips Taraz is now developing design and estimate documentation for the construction of necessary infrastructure. Products from the proposed plant will be sold in the domestic market. The project is one of nine agreements between organisations from Germany and Kazakhstan announced during an official visit by German President Frank-Walter Steinmeier.

US: Fertiliser company Mosaic is seeking approval from the Environmental Protection Agency (EPA) to test using phosphogypsum on a pilot road project at its New Wales site in Mulberry, Florida. It hopes to test using the substance in three 60m sections of road, according to correspondence seen by the Tampa Bay Times newspaper. The proposed test road will use a mixture of sand with up to 50% phosphogypsum in a 25cm base. The road will then be monitored over the next 18 months.

The EPA originally approved the limited use of phosphogypsum in road construction in 2020. However, this was then subsequently blocked. Local legislation in Florida allowing the Florida Department of Transportation to study the use of phosphogypsum in road construction has been approved by the Florida Senate and House of Representatives but is yet to be signed off by Governor Ron DeSantis.

The Florida Industrial and Phosphate Research Institute estimates that around 1Bnt of phosphogypsum is stored in over 20 sites in the state. Over 25Mt/yr of phosphogypsum is generated, typically from fertiliser production. Environmental groups in the state have opposed Mosaic’s proposed use of phosphogypsum in road building due to its higher level of radioactivity compared to other forms of gypsum.

Bosnia & Herzegovina: The shareholders assembly of state-owned power company RiTE Ugljevik has approved the signing of contracts for the sale of gypsum and coal with Beijing New Building Materials (BNBM) Ugljevik. The project intends to build a 40Mm²/yr gypsum wallboard plant and it has a budget of Euro50m, according to the Sarajevo Times. RiTE Ugljevik previously agreed to supply 250,000t/yr of flue gas desulfurisation (FGD) to the proposed wallboard plant.

US: CertainTeed Gypsum has received the 2023 Better Project Award from the Department of Energy for the company’s smart energy management system at its Buchanan wallboard plant in New York state. The system at the plant, which was designed in-house and consists of over 180 energy meters, allows the staff to track and contextualise energy data, forecast future energy use and tackle actual losses once identified. Within the first three months of installation, the system helped identify several opportunities to reduce energy usage and enabled the plant team to scope process changes and projects to address them. The subsidiary of Saint-Gobain now plans to deploy similar technology at sites throughout North America.

Jay Bachmann, Vice President and General Manager of CertainTeed’s Interior Product Group, said “In a dynamic, continuous production facility like our Buchanan plant, it is essential to have real-time, in-depth data that can help us reduce our energy consumption, and our smart energy management system does just that.” He thanked workers at the Buchanan plant for their efforts.

The Better Project awards recognise manufacturers who improve energy efficiency and competitiveness in the industrial sector. To be considered for an award, projects must deliver significant waste or energy savings and must be discreet, innovative, and replicable in similar industrial facilities.

Montenegro: UK-based private equity firm Chayton Capital has agreed to fund the feasibility study for the establishment of a joint public/private building materials production complex at the site of the Plejevlja energy hub. The complex will include a gypsum wallboard plant. Emerging Market Watch News has reported that the firm will also be involved in the modernisation of a coal-fired power plant at the site. The total budget for the project is Euro700m.

Philippines: Knauf Gypsum Philippines has petitioned the Philippines Tariff Commission to reduce the import duty on imports of Omani gypsum to 0% of value. Currently, Oman’s gypsum enjoys a most favoured nation (MFN) reduced tariff rate of 3%. The Oman Daily Observer newspaper has reported that high gypsum wallboard demand has created short supply of gypsum in the Philippines, according to Knauf Gypsum Philippines. Beside the company’s wallboard operations, the raw material is also critical to cement production in the country.

The Philippines receives a minor share of Oman’s 8.74Mt/yr of natural gypsum exports. The Southeast Asian country has a housing backlog of 6m units.

Gypsum wallboard or drywall got name-checked by the commander-in-chief of the US last week. President Joe Biden announced during his State of the Union Address to the US Congress on 7 February 2023 that he was going to require that, “all construction materials used in federal infrastructure projects to be made in America.” He then expressly mentioned wallboard along with lumber, glass and fibre-optic cables before adding the catchy sound-bite, “American roads, bridges, and American highways are going to be made with American products as well.” Although for the wallboard sector he might as well have been saying that American walls are going to be made from American wallboard.

Biden’s focus on gypsum wallboard and other building materials is linked to the US$1.2Tn Infrastructure Bill that was signed in late 2021. The White House Office of Management and Budget (OMB) issued guidance in mid-2022 on how the spending should be targeted at US manufactured construction materials. At that time it excluded steel, cement, aggregates and additives but included non-ferrous metals, plastic and polymer-based products, glass, lumber and wallboard in its category of ‘construction materials’ that should be sourced locally. Its definition of ‘construction materials’ meant that the manufacturing process for the construction material occurred in the US. Although combining some of the materials above as a composite would then be classified as a ‘manufactured product,’ at which point, 55% of the total costs of the components would have to be mined, produced or sourced in the US to meet the so-called ‘Buy America’ preference. The new bit following Biden’s recent speech is that the OMB has released further guidance for the ‘construction materials’ mentioned above. So far, so much legalese.

Canada-based manufacturers of building materials are understandably wary of this kind of talk. However, ‘Buy America’ has been around since the 1930s and there have often been ways around it. As Jean Simard, the president and chief executive officer of the Aluminium Association of Canada, told CBC, in practical terms, the math is on Canada's side. "Canada represents about 70% of total US imports. That's not going to change."

Data on how much wallboard is actually exported from Canada to the US is hard to find but the former’s wallboard sector is about 10 times smaller than the latter’s. Most of the gypsum producers in Canada are owned by international companies with a presence in the US also. This created an interesting situation in October 2022 when CertainTeed Canada welcomed the Canadian International Trade Tribunal's ruling in favour of six provinces and territories' anti-dumping measures on imports of gypsum wallboard from the US. CertainTeed is owned by France-based Saint-Gobain, which also runs Continental Building Products. Together, Saint-Gobain is the second largest wallboard producer in the US by installed capacity. It seems unlikely that the current US rhetoric will reduce Canada’s exports of crude gypsum south of the border. Data from the United States Geological Survey (USGS) shows that the US imported 1.57Mt of crude gypsum from Canada in the first nine months of 2022, an increase of 12% year-on-year from the same period in 2021. Imports from Mexico had been similar so far in 2022, although they are down compared to 2021.

The other reason Biden may have mentioned wallboard specifically in a patriotic speech may have been in relation to the long-running defective China-based wallboard story from the early 2000s. Although the legal cases associated with this have mostly died down, one popped up in early February 2023 when Knauf and its China-based subsidiaries managed to avoid a product liability claim because the Florida-based plaintiff had waited too long. Knauf now owns the US’ largest wallboard producer, USG.

It is worth remembering that the US remains the largest wallboard market in the world by production capacity. So calls by a politician to ‘Buy America’ may be more for the ears of voters rather than industry. Although that’s not to say that the situation won’t change in the future. The examples above also show that the US may have been guilty of dumping wallboard upon its neighbours and that the two largest producers in the US are both foreign owned. The other thing that Joe Biden said in his State of the Union Address was that buying American was “totally consistent with international trade rules.” This comment may have been made in response to European criticism of some of the implications of the Inflation Reduction Act with its incentives for industrial supply chains supporting renewable energy production and electric vehicles, be they based in the US or in ‘friendly’ countries. The wallboard sector seems unlikely to be caught up in this directly but protectionism is in the air. How this manifests in corporate strategy over the next few years may be telling.

Philippines: Knauf Gypsum Philippines has signed an agreement with the Department of Social Welfare and Development (DSWD) to provide construction skills training in Calabarzon. The partnership links to the country’s Pantawid Pamilyang Pilipino Program (4Ps), a poverty reduction scheme that started in 2019, according to the Manila Bulletin newspaper. Knauf Gypsum Philippines opened its first gypsum board training centre in the country in Quezon City in mid-2022. It has trained nearly 800 workers on gypsum board installation and jointing skills since the centre opened.

US: The White House has released proposed guidance mandating the use of locally manufactured building materials in government-funded infrastructure projects. President Joe Biden made the announcement in his State of the Union address on 7 February 2023, according to Reuters. The new proposed guidance has been released by the White House Office of Management and Budget (OMB) and will be controlled by the House of Congress under the US$1Tn 2021 infrastructure law.

During his address Biden said, “When we do these projects... we’re going to buy American." He added, “It's totally consistent with international trade rule." He cited lumber, glass, wallboard and fibre optic cables during the speech. The OMB later added plastic and polymer-based products to this list. It is also seeking input on whether to include additional construction materials such as paint, bricks and engineered wood products