Industry news: June 2010
- European Union adds to metal shortage warnings
- 2010 European Minerals Conference held in Madrid
- Responsible sourcing accreditation for CEMEX UK
- Hunterston coal power plan submitted to ministers
- New publications released by the British Geological Survey
- Major open pit resource upgrade at Hemerdon
- Progress update for Scotgold’s Cononish gold and silver project
- UK Coal releases a statement regarding Hargreaves Services plc
- Tarmac cuts carbon with lime kiln investment
- Scottish Resources Group Plc releases preliminary results for 2010
- £2bn offshore wind farm to go ahead off north Wales
- Green light for Cia Aig hydro scheme
Following the launch of its Raw Materials Initiative in November 2008, the EU has released a report ‘Critical raw materials for the EU’. The EU is highly dependent on imports of ‘high tech’ metals such as cobalt, platinum, rare earths, gallium and indium. These metals are essential components in ‘environmental technologies’ for boosting energy efficiency and reducing greenhouse gas emissions. On the basis of their significant economic importance for key sectors of EU industry, their vulnerability to supply disruption and lack of substitutes the report identifies 14 metals and minerals critical to the EU at the present time. These 14 metals and minerals are antimony, beryllium, cobalt, fluorspar, germanium, graphite, indium, magnesium, niobium, platinum group metals (PGM), rare earth elements (REE), tantalum and tungsten. The report suggests that new policy is required to secure access to and increase the material efficiency of these critical raw materials.
The full report can be accessed from http://ec.europa.eu/enterprise/policies/raw-materials/critical/index_en.htm
Representatives of the European Commission, European Parliament, Member States and European extractive industry participated in this event. The focus of the conference was to release the interim results of the 2008 communication: ‘The Raw Materials Initiative - Meeting our Critical Needs for Growth and Jobs’ (RMI). The reports of the two working groups set up as a result of the RMI were released at this meeting: ‘Improving framework conditions for extracting minerals for the EU’ and ‘Critical raw materials for the EU’.
The minerals industry presented its ‘Madrid Raw Materials Declaration 2010’ at this conference. The key points of the declaration are:
- A raw materials policy needs to be promoted at European level
- There is a need to develop corresponding raw material policies at national, regional and local levels
- There is a need to develop associated land-use planning policies
- There is a need to adopt best practices in permitting procedures
The minerals industry recommends that the Raw Materials Initiative adopt these proposals and that they be incorporated in the final communication on the Initiative expected at the end of 2010.
CEMEX has announced that all the main product divisions in its UK business have been certified to the Building Research Establishment (BRE) Framework Standard for the Responsible Sourcing of Construction Products – BES6001. The company now claims to have the best portfolio of responsibly-sourced products in the industry. The certification means that all products supplied by CEMEX UK are responsibly sourced with ash, asphalt, building products and cement achieving a ‘very good’ rating under the independently-verified standard that addresses the social, economic and environmental impacts across the entire supply chain. To meet the standard, CEMEX’s products have been assessed in respect of quality, organisational governance, supply chain management and environmental and social impact. The certification also allows for traceability of the product to ensure all areas within the supply chain are operating to high standards. CEMEX UK’s sustainability director Andy Spencer said: ‘This is a big step forward for us as a company and helps to achieve our goal of being sustainability led in everything we do. The challenge is now to maintain and improve our scores in this standard.’
A full planning application for a three billion pound coal-fired power station at Hunterston in Ayrshire has been submitted to the Scottish government. Ayrshire Power wants to build a plant with experimental carbon capture and storage (CCS) technology. If the proposal is approved, the facility would be the first of its kind in the UK. Environmentalists oppose the scheme saying it will damage local wildlife and the environment. They argue it makes a mockery of the government's commitment to reducing carbon emissions. Ayrshire Power Project Director Muir Miller said ‘We believe our proposal supports the UK and Scottish governments' commitment to leading the way in developing CCS to assist in decarbonising the UK's electricity sector by 2030’.
Source: Mining Journal, 20 April 2010, p30; http://news.bbc.co.uk/1/hi/scotland/glasgow_and_west/10208275.stm
The British Geological Survey has added rare earth elements to its Mineral Profile series. Rare earths play a vital and increasing role in a wide range of consumer electronics, in environmental technologies and military applications. This report examines the global distribution of rare earths, their extraction, applications, global production and trade and provides an overview of rare earth resources in Britain.
BGS has also released a report entitled ‘Mineral Information and Statistics for the BRIC countries’. The term ‘BRIC’, used to refer to the four countries of Brazil, Russia, India and China, has become almost synonymous with the rise of emerging economies in the global market. This new report presents production and trade data over a ten-year time period with extended commentary and analysis of trends.
Wolf Minerals Limited has announced a major resource upgrade at its world-class Hemerdon Ball tungsten and tin project in Devon. The total resource is now 218.5 million tonnes at 0.18% tungsten trioxide (WO3) and 0.02% tin, an increase of 84 per cent in contained metal compared to the resource figure quoted in November 2008. This total includes Measured, Indicated and Inferred resources at 0.08% W cutoff for a total of 39 million mtus of tungsten trioxide and 44 thousand tonnes of tin metal. The upgrade also includes an increase in average grade of the resource by 3.5 per cent compared to the November 2008 model. This revision brings the majority of the planned open pit resource at Hemerdon to a measured category, reinforcing the project’s position as one the largest tungsten resources in the world. This increased confidence has been achieved through additional drilling data and better geological understanding of the deposit.
Scotgold Resources Ltd has released a progress update on their Cononish gold and silver project near Tyndrum in Scotland. The highlights of this include:
- AMC commissioned to update scoping study
- Study to be completed in August
- Project development options to be finalised during third quarter
- Revised date for planning permission decision
- Recent transposition of EU legislation requires public advertisement
- New decision date anticipated mid to late August
- Definitive plant costing study commenced by Gekko
- Final testwork commenced on optimised flowsheet to confirm predicted recoveries
- Feasibility level tailings design completed by AMEC
Chris Sangster, Scotgold CEO, said ‘We are pleased to enter this final phase of project development in respect of the Cononish gold and silver project. Completion of the updated study will be a significant milestone towards becoming a gold producer and will enable the Company to progress to a development decision in the third quarter of 2010. The revised decision date for the planning permission is not expected to significantly impact on potential development timescales for the project and the company remains on track (subject to permitting and financing) for first gold production in late 2011.’
UK Coal plc has announced that, further to the announcement of 9 March 2010 and the subsequent announcement of 26 April 2010, it has received confirmation from Hargreaves Services plc that it no longer wishes to proceed with a merger proposal with UK Coal. Accordingly, UK Coal is no longer in an offer period for the purposes of the City Code on Takeovers and Mergers. UK Coal has also announced that the new seams at their deep mines, Kellingley and Thoresby, are in full production and Daw Mill has completed the ramp-up on its new panel. Current rates of production from each of these mines are in line with expectations and forecast production for 2010 is around 7.6 million tonnes.
Tarmac Ltd is set to reduce carbon emissions from two of its lime kilns by 40 per cent per year at the company’s Tunstead site, near Buxton in Derbyshire, due to a £13.4 million investment in a new kiln. The new ‘Maerz’ kiln replaces two existing rotary kilns installed at the Tunstead site in 1955 and is part of Tarmac’s ongoing commitment to reduce energy consumption across all of its operations. The new, more efficient kiln will help to reduce costs and atmospheric emissions at the site, which has already cut energy consumption by 25 per cent in the past five years. The Maerz kiln is the most efficient lime kiln currently available. By pre-heating the feed limestone, much of the heat is recovered – ensuring less energy per tonne of lime is required in production. The new kiln will reduce carbon emissions per tonne of quicklime by 40 per cent and cut sulphur dioxide by over 90 per cent. Dr Martyn Kenny, head of sustainability at Tarmac Ltd said ‘Managing greenhouse gas emissions and reducing energy use are key sustainability commitments for Tarmac. This new kiln will help to better manage the environmental impact of our operations and reduce energy consumption,’
Scottish Resources Group plc (SRG), Britain’s largest surface coal mining producer, has released its preliminary results for the 52 weeks ended 27 March 2010. Highlights include:
- Revenue of 229.9 million pounds, a 59 per cent increase compared to 2009
- 3.4 million tonnes of coal production compared to 3 million tonnes in 2009 (a 13 per cent increase)
- A 30 per cent increase in sales tonnes to 4.05 million tonnes (3.12 million tonnes in 2009)
- Operating profit before interest and tax of £33.1m (2009 - £6.2m loss)
- Profit of £21.2m for the period (2009 – £9.1m loss)
- Net bank debt reduced by £18.4 million to £19.9m
- New three year banking facility entered into with Lloyds Banking Group
- Audited JORC compliant coal reserves and resources of 52.3 million tonnes, Non - JORC reported coal resources of 7.6 million tonnes and 42.6 million tonnes of identified future coal prospects
SRG has also announced its intention to seek admission of its ordinary shares to the Official List and to trading on the main market of the London Stock Exchange by way of an initial public offer to institutional investors. SRG has nine operating surface coal mining sites in Scotland and produced 20 per cent of the UK’s total coal production in 2009.
Construction work will begin next year on one of the largest offshore wind farms in the world. The Gwynt y Môr wind farm is a joint venture between RWE Innogy, Stadtwerke München and Siemens and will have 160 wind turbines about ten miles off the north Wales coast near Colwyn Bay and Llandudno. In its first phase of expansion, the wind farm is planned to generate electricity as early as 2013. The project is expected to be completed in 2014. From then onwards it is forecast to generate about 1950 gigawatt hours of electricity annually, enough to supply about 400 000 British households. The Secretary of State for Energy and Climate Change Chris Huhne said ‘This is the first, of what I hope will be many, examples of how we can make the most of our island’s huge renewable energy potential.’
RWE npower renewables, the UK’s leading developer of small scale hydro projects, has received the go-ahead to construct and operate the run-of-river Cia Aig hydro electric scheme in the Scottish Highlands. The Scottish Government has granted permission for the scheme which will produce up to three megawatts of green energy, enough to meet the average annual electricity demands of up to 1600 homes. The scheme will be powered by the Abhainn Chia-aig river, located at the eastern end of Loch Arkaig near Achnarcarry, approximately 15 km north of Fort William. Construction on the Cia Aig hydro scheme is expected to begin in 2011 and will take around 18 months to complete. RWE npower renewables developer, Alasdair MacNiven said ‘Cia Aig represents another important contribution towards achieving Scotland’s target of generating 50 per cent of electricity demand from renewable sources by 2020.’ RWE npower renewables currently has 12 hydro schemes operating throughout Scotland, generating more than 19 megawatts.