Cement firms may have to close quarries

Cement and aggregate producers caught out by the speed of the economic downturn are considering mothballing quarries to rein in costs.

The sector is being hit by a combination of rising fuel prices and a drop-off in demand, causing quarry operators to look at raising prices and halting production.

Lex Russell, vice president of aggregates at Cemex, told CJ it was a struggle to make some quarries pay. He said: "An economic slowdown is one thing, but we're also hit by high energy costs, making it a double whammy. We will need to increase prices and keep costs down by improving operational efficiency. We're only looking to extract what we need and then shut down."

Sales were good in 2007, but a sudden drop-off in demand has caught quarry operators cold.

Tim Deal, senior planning and estate manager at Lafarge, said: "It's happened surprisingly quickly, so it was difficult to plan any measures. I wouldn't be surprised if there was a rationalisation of production capacity in the market."

Jerry McLaughlin, director of economics and public affairs at the Quarry Products Association, added: "Areas such as ready-to-use mortar are going off a cliff right now and it's also beginning to bite in concrete - and this will affect sand, gravel and crushed rock."