Industry news: August 2010
- Cononish gold mine application turned down
- Construction decline likely to continue throughout 2010
- Deceptively positive second quarter sales volumes
- New industry guidance on mineral waste
- ATH Resources sells Regeneration business
- Wolf raises $2m to fast track completion of Hemerdon Definitive Feasibility Study
- Application for additional extraction at Shotton
- Five quarry extensions for Hanson
- High gold and silver grades in veins at Beinn Udlaidh in Scotland
- Western United Mines applies for site changes to South Crofty
- New releases from the BGS
The Loch Lomond and Trossachs National Park Board has refused planning permission for Scotgold’s proposed development of the Cononish gold mine near Tyndrum in Scotland. Scotgold had applied to mine gold and silver and build a processing plant on the surface, covering 39 hectares. The proposed development involved the annual extraction of up to 72 000 tonnes of ore over ten years, creating 52 jobs. The Executive Director of Planning and Rural Development recommended last week that the application should be refused. The recommended reasons for refusal included:
- Concerns over significant landscape, visual and recreation impacts
- The uncertainty of the economic benefits due to fluctuating gold prices
- The proposal goes against the aims of the National Park designation
The recommendation was considered by a full meeting of the National Park Authority Board at Tyndrum on August 18th and refused. Dr Mike Cantlay, convener of the National Park Authority, said that it had been ‘an especially difficult application to consider. There were compelling arguments from both sides. At the end of the day, we could not balance the potential economic benefits against our primary aim to conserve and enhance our natural heritage, one of the original reasons for establishing National Parks in Scotland.’
Scotgold is considering its options in relation to this refusal but is likely to appeal to the Scottish Ministers. Any appeal would need to be lodged within three months and Scotgold will make a further release shortly to advise its intentions. Chief Executive Officer Chris Sangster commented ‘Scotgold is extremely disappointed at the decision as we were encouraged that the decision was by a very narrow majority. We consider that the proposal has significant merit in the local, regional and national context. The proposed development would have minimal environmental impact whilst it offered a distinct economic benefit locally.’
Despite recent favourable Office for National Statistics figures, the construction industry is facing a further decline in output in the second half of 2010, according to the latest Construction Trade Survey published by the Construction Products Association. This follows last year’s sharpest fall in 35 years. According to the survey, building and civil contractors experienced falls in output in both the first and second quarter of 2010, while all sectors of the industry are reporting poor sales, order books and enquiries. Although product manufacturers experienced a rise in sales in the second quarter, the forward picture is very uncertain, says the Association. Noble Francis, Economics Director at the Construction Products Association, said ‘Over the next few years, construction is braced for a fall in public sector investment and will increasingly need to look to the private sector for growth. It is critical that capital investment is focused on those areas such transport, energy, and other key infrastructure projects, that will do most to stimulate the wider economic recovery.’ Julia Evans, Chief Executive of the National Federation of Builders, added ‘Given the significant contribution that construction made to the overall growth in UK GDP in the second quarter of 2010, we can only hope the Government takes into account the resulting benefit to the wider economy of a sustained, and sustainable, level of investment in construction when it makes further decisions on spending.’
The Mineral Products Association (MPA) has announced that the latest data on second quarter mineral products and construction performance have the potential to give a misleadingly positive impression of industry activity and prospects. New MPA survey results indicate that aggregates, cement, ready mixed concrete and asphalt sales volumes all improved in the second quarter of 2010 compared both with the same period of 2009 and the first quarter of 2010. These figures reflect the construction growth evident in Government’s recent estimates of economic growth in the second quarter. This data indicated surprisingly high 1.1 per cent GDP growth in the second quarter, the main driver of which was a 6.6 per cent increase in construction activity compared with the first quarter, and a 5.8 per cent improvement since the second half of 2009. These improvements do not, however, indicate a pattern of sustained growth in these sectors. Simon van der Byl, MPA Executive Director, commented ‘In spite of these welcome improvements there are, however, no indications of sustained growth in either the mineral products or construction sectors. There is little likelihood of any significant improvement in private sector construction work over the next eighteen months therefore the recent improvements in mineral products and construction markets will be short-lived.’
With the first round of permit applications due under the Mining Waste Directive (MWD) at the end of this year, the CBI Minerals Group has published a new guide to help minimise the burden on mineral operators. Prepared in discussion with the Environment Agency, the guide will provide operators with a practical means of deciding whether materials such as soils and overburden arising during the course of mineral extraction and processing operations are extractive waste and thus require permitting. Mineral operators are still required to demonstrate to the Environment Agency, on a case-by-case basis, that materials are not extractive waste, and therefore the Minerals Group has published the new guide to provide a practical means of deciding whether materials generated in the course of mineral extraction are not waste and thus do not require permitting. CBI Minerals Group Chairman Nigel Jackson said ‘We have worked tirelessly to ensure that soils, overburden and similar materials are not categorized as extractive waste, and this guide will provide a pragmatic way to minimize the number of sites that will require permitting and will go some way to reduce the burden on an already over-regulated industry.’
ATH Resources plc, one of the UK’s largest coal producers, has sold the assets of ATH Regeneration Ltd – the part of ATH Resources which specialises in coal recovery, land remediation and regeneration – to newly formed company RecyCoal Ltd. Funded by a substantial investment fund and its partners, RecyCoal will have ATH Group’s current Chief Executive, Tom Allchurch, and current group Finance Director, Steven Beaumont, among its shareholders. The shareholders of RecyCoal have committed £40 million to the acquisition and development of the new company. ATH Resources’ new Executive Chairman, David Port Commented ‘The disposal of the ATH Regeneration assets will reduce debt and allow the group to focus on its surface mining business without having to raise the significant amounts of capital necessary to fully exploit the regeneration business.’
Wolf Minerals Limited has announced, subject to shareholder approval, that it has placed 6.667 million shares and 3.333 million options to institutional and sophisticated investors to raise $2 million (before costs). The placement was managed by Blackswan Equities. The funds will be used primarily to fast track the Hemerdon Ball tungsten project in Devon by concluding a Definitive Feasibility Study (DFS) in October 2010 and entering into pre-production activities. Humphrey Hale, Managing Director of Wolf, commented ‘I am delighted to have Blackswan Equities supporting Wolf in this capital raising. The Company is well funded to finalise its DFS by October 2010, and will shortly begin the process of seeking project financing and bolstering its technical team in the UK. It is a very exciting time for the Company as it is at a key turning point in its development to become a world class tungsten and tin producer outside of China.’
Banks Mining has submitted plans to extract an additional two million tonnes of coal from the Shotton surface mine in Northumberland for assessment by the County Council. According to Banks, the additional scheme will not involve mining on any land outside the existing Shotton site or any increase in daily traffic movements. The Shotton mine is located on the Blagdon Estate to the west of Cramlington and has been active since the beginning of 2008. Around 3.4 million tonnes of coal, two million tonnes of shale and 750 000 tonnes of fireclay were originally approved to be mined over the eight-year lifetime of the scheme, finishing in 2016. Banks is now asking for an extension of the overall life of the site until 2018 to allow the additional two million tonnes of coal supplies to be recovered. If approved, extraction operations will finish in 2016, with full restoration of the site to be completed during 2018. Mark Dowdall, Banks’ environment and community director, said ‘The Shotton mine has now been operating very successfully for more than two years, especially with regard to the positive relationships we maintain with local communities. We believe there are strong operational, environmental and economic arguments for recovering this additional coal, which we hope will be recognized by Northumberland County Council.’ A decision on the planning application is expected in early 2011.
Hanson UK has secured planning consents for five quarry extensions in the last 12 months, signalling their confidence in an upturn in demand for construction aggregates. Together these extensions contain nearly seven million tonnes of sand and gravel. The five extended sites are at Earls Barton in Northamptonshire, Whiteball near Wellington in Somerset, Rickneys near Ware in Hertfordshire, Newington in Nottinghamshire and Baston Fen in Lincolnshire. Hanson Land and Mineral Resources Director, Mick Daynes, said ‘Lead times for securing new permissions, even small extensions, can be anything from two to five years. It’s important that we look ahead and ensure we are in a position to benefit when market conditions improve. Our in-house team has worked hard to secure these important permissions. Having tracked their progress, I know there have been some difficult issues to address but the results leave us well placed to sustain our current market and take advantage of the upturn when it comes.’
Scotgold Resources Limited has provided a progress report on the Company’s continuing exploration for gold and silver in the Beinn Udlaidh area, five kilometres northwest of the Cononish gold and silver deposit (which was recently refused planning permission) and outside the boundaries of the Loch Lomond and Trossachs National Park. Scotgold first announced the identification of significant breccia-hosted gold-silver mineralisation at Beinn Udlaidh in association with a lamprophyre field in September 2009. Outcrop sampling in the River Orchy area has shown grades up to 383.8 g/t Au and 90.7 g/t Ag and results of 11.1 g/t Au, 167g/t Ag over one metre have been found in the Beinn Udlaidh vein extension. Scotgold’s Chief Executive Officer, Chris Sangster said ‘The results continue to highlight the potential of the Beinn Udlaidh area to host high grade, narrow vein gold and silver deposits, in addition to the lower grade breccia systems which are the main focus of Scotgold’s current exploration program. Any such high grade deposits could be stand-alone operations in their own right.’
Western United Mines Ltd has submitted two planning applications to Cornwall Council as part of plans to restart commercial mining on the South Crofty site. The first proposes to move infrastructure and buildings to a more convenient area on the site, near to the railway and close to the Tuckingmill Decline mine entrance. The second seeks to extend mining permissions to double the previous underground operating area. Alan Shoesmith, WUM's Chief Executive, said ‘Submitting the plans is an exciting milestone and one which the South Crofty team has been working doggedly towards since purchasing the mine in 2001. There have been lots of challenges to overcome along the way but these events, together with the excellent results from our exploration activities, and the real sense of common purpose that now exists, we are now much closer to securing the mining future for Cornwall that we always knew we could.'
The British Geological Survey has released the annual publication United Kingdom Minerals Yearbook. This publication provides comprehensive statistical data on minerals production, consumption and trade to 2008, estimates of production for major mineral commodities in 2009 and a commentary on the UK's minerals industry. It is of value to all those interested in the many facets of Britain's minerals industry and its contribution to the national economy. This report is free to download from the MineralsUK website: http://www.bgs.ac.uk/mineralsuk/whatsnew.html#UKMY.
BGS has also released mineral resource maps of Wales. BGS was awarded a grant from the Welsh Assembly Government administered Aggregates Levy Sustainability Fund for Wales in 2009 to provide a comprehensive, relevant and accessible information base to enhance the sustainability of mineral resources in Wales. BGS co–funded this project through its Sustainable Mineral Solutions Team, part of the Minerals and Waste science programme. This work, which was led from the BGS Cardiff office, was completed in July 2010. A report, The Mineral Resource Maps of Wales, and a series of six digitally generated maps at a scale of 1:100 000 are now available to download from: http://www.bgs.ac.uk/mineralsuk/whatsnew.html#MRW.