Europe's industry tries to adapt to high energy costs

By Tom Bergin

STAMFORD (Reuters) - Thirty meters from the kiln the heat is palpable. It is converting crushed stone to 'clinker' for cement at temperatures of 1,500 degrees Celsius.

It was designed to burn pulverized coal.

But rising coal prices have prompted Castle Cement, a unit of Germany's Heidelberg Cement HBCB.DH, to replace over half the coal with alternatives -- tires, bone meal, paper.

Across Europe, companies are suffering under high energy costs. Oil hit a record high above $140 per barrel on June 26.

"We've had to increase our use of secondary fuels such as whole tires, meat and bone meal, paper and plastics and recycled solvents," said Gareth Price, General Manager of the Ketton works.

"This keeps our costs down and also reduces the amount of waste going to landfill."

Beyond the 68 meter-long steel tube of the furnace, an enormous cylindrical mill grinds 130 tonnes of clinker an hour to a fine powder with a deafening rumble.

It runs on electricity, which cannot be replaced with other fuels, and power prices have more than doubled in the past year.