Industry news: February 2011
- UK industry responds to carbon capture and storage (CCS) funding call
- Tarmac and Lafarge UK operations merger
- The Mineral Product Association (MPA) calls on Government to re-asses Aggregates Levy
- Aggregate reserves in the UK still falling short
- Alternative fuels allow Cemex UK to reduce kiln emissions
- Bid to attract interest in disused Welsh quarry
- Geothermal exploration below the city of Newcastle
- New publications from the BGS
The Government has received 14 applications for EU funding for CCS and renewable energy projects. The funding will come from the New Entrant Reserve (NER) scheme, a pot of money worth up to €9 billion designed to support such projects across the European Union. The scheme is supported by the EU Emissions Trading System whereby allowances are sold to provide funding for renewable and CCS technology.
Nine of the 14 applications were for CCS projects whilst the remaining five were for innovative renewables. The Government has until May 9 to review the applications and decide which will be put forward to the European Investment Bank for further consideration. Energy Minister, Charles Hendry said that the level of interest received for CCS projects is "particularly heartening" as it highlights the keenness of UK industry to develop CCS, he added that it "confirms the lead that the UK is taking in this critical technology".
The majority of applications are for CCS projects based in England and Scotland, and are designed to capture CO2 from new coal-fired stations using pre-combustion technology. However, a small number of applications include gas-fired stations, post-combustion technology and retro-fits to existing stations. The five innovative renewables applications received include tidal stream and wave technologies in Scotland and an offshore wind project in north-eastern England.
Lafarge SA and Anglo American plc have agreed to combine their UK cement, aggregate, ready-mixed concrete and asphalt, and contracting businesses, including Lafarge Cement UK, Lafarge Aggregates and Concrete UK, and Tarmac Quarry Materials.
The merger will form a 50:50 joint venture, creating a leading UK construction materials company with a portfolio of high-quality assets; a well-developed network of operations; and a range of innovative well-known brands.
The 2010 combined sales of the two businesses amounted to around £1.8 billion with combined earnings before interest, taxes, depreciation and amortisation (EBITDA) of £210 million. The merger is expected to improve logistics, increase operational efficiency and deliver a wider range of value added products, resulting in annual savings of around £60 million.
The joint venture will operate with a board of directors led by an independent chairman, and with executive management teams sourced from both businesses. Completion of the transaction is subject to regulatory approvals, which could take several months. Both Tarmac UK and Lafarge UK will continue to operate independently until such approvals are obtained.
The Mineral Products Association (MPA) has urged the Government to reduce the level of, and re-evaluate, the environmental justification of the Aggregates Levy, on the back of a Government announcement to scrap the Aggregate Levy Sustainability Fund as of April 2011.
The chief executive of the MPA, Nigel Jackson, said: "There are clearly questions about the environmental performance and relevance of the levy and the additional costs it is imposing on construction clients and the supply chain". He also said that the Government should be encouraging economic growth, not increasing costs, he added that without the Aggregate Levy Sustainability Fund the levy is nothing more than a "revenue-raising measure and not an environmental tax".
Mr Jackson suggested that now would be a perfect time to support communities in quarrying areas by recycling part of the levy directly back into "local community trusts". He also recommended that funding be used to support projects relating to biodiversity, climate change, the marine environment and strategic mineral planning.
According to a new report published by BDS Marketing Research Ltd the UK aggregates industry is unable to replenish its output with new reserves, even though markets continue to remain at historically low levels. Sand and gravel producers and crushed rock suppliers were both equally affected.
BDS reports that aggregate companies obtained consents to extract 125 million tonnes of new reserves during 2010, compared with actual production of around 150 million tonnes. During the past 15 years BDS believes that only in 2006 did the aggregates industry manage to replenish more reserves than were extracted. In only one other year were new consents similar to production, in the remaining 13 years it is estimated that consented reserves failed to match actual production.
Analysis of last year's planning consents show significant differences between regions, with few additional reserve consents being granted in the Midlands, East Anglia, northern England and Wales. Collectively these regions replenished only three months' production, replicating difficulties experienced in these regions in 2009 when only six months' production was replenished.
The situation in Yorkshire and the South East was more positive, with the level of new consents granted being similar to actual production; however, only in Scotland and the South West did new reserve consents exceed production.
Cemex UK has replaced more than 52 per cent of traditional fossil fuels, used to heat its cement kilns, with alternative fuels during 2010, up from 45 per cent in 2009.
The company saved almost 194 000 tonnes of CO2 over a 12 month period by using alternative fuels, equivalent to saving the CO2 emissions from around 77 000 cars in a year. During 2010 Cemex ran its two UK-based cement kilns, in Rugby and South Ferriby, using 49 per cent and 67 per cent alternative fuels, respectively. The alternative fuels included Climafuel, chipped tyres and secondary liquid fuel (SLF). Climafuel is produced from household, commercial and industrial waste which is diverted from landfill and processed in a mechanical and biological treatment (MBT) plant. Secondary liquid fuel is produced from industrial liquid waste that cannot be recycled, for example, paint thinners, inks and varnishes.
Vice-president of Cemex UK operations, Carlos Uruchurtu, said that the use of alternative fuels "helps to reduce the carbon footprint in particular, but also drives down other emissions, such as oxides of nitrogen and sulphur dioxide". He added that the use of these fuels also reduces the amount of waste sent to landfill, in Cemex's case around 300 000 tonnes of waste that would have gone to landfill was used to fuel kilns in 2010.
The vice-president also said that it should be Cemex's long-term goal to use 100 per cent alternative fuels; however, it would be subject to "public consultation and permit approvals, as well as capital investment and improvements in the waste-derived fuels supply chain".
Phil Cartwright of DSRL said "We studied several options for closure of the landfill and carefully considered the environmental impact of each.
South Ferriby currently has approval to use up to 85 per cent alternative fuels, whilst Rugby hopes to secure approval to use up to 65 per cent alternative fuels on a permanent basis later this year.
Cemex UK has claimed that there are "no immediate plans" to re-open the Glendevon Quarry at Glenquey, in response to growing local opposition to the company's recent planning application to Perth and Kinross Council concerning the site. If the application is approved sand and gravel could be extracted from the site, in Glenquey, until 2035.
A spokesperson for Cemex confirmed that an application to renew the existing consent to extract sand and gravel at Glendevon Quarry had been submitted. The spokesperson also said that "the quarry is already included in the council landbank" and that the application would "safeguard long-term local material supplies". Cemex has also submitted plans for a comprehensive restoration programme that was created with input from Scottish Water and the Woodland Trust. The restoration plans include tree planting and improvements to the main A823 access road.
However, campaigners have expressed concerns over road safety on the A823 through Glendevon, as well as concerns over damage to the surrounding landscape, and flora and fauna. Mr Stuart Dean, chairman of the Friends of the Ochils, said: "The Ochils are a vital recreational resource for the people of Central Scotland". He added that the area is visited by thousands of walkers and tourists each year. Mr Dean called upon the Perth and Kinross Council to reject the application, stating that they should instead consider how best to protect the Ochils for future generations.
The Welsh Assembly Government has given Gwynedd Council £478 990 to improve the power supply to the old Glyn Rhonwy Quarry in Llanberis, as part of a scheme to attract investors.
The total cost of the works will be close to £1 million and will include a network of footpaths to encourage tourism. Trevor Edwards, a Llanberis council member, welcomed the work and hoped the project would boost tourism and business investment in the area. He said: "currently there is only enough power running into the quarry to accommodate the Siemens factory". He added that the scheme would see the installation of a new power line meaning fewer problems if businesses did want to invest in the industrial side of the site, and potentially "paving the way for more jobs in the area".
A team of engineers from Newcastle and Durham Universities are planning to sink a borehole 2 000 metres below the planned Science Central site, in the city centre, in the hope of finding a source of geothermal energy.
It is hoped the £900 000 project, funded by the Newcastle Science Partnership and the Department of Energy and Climate Change, will result in water at a temperature of approximately 80°C being returned to the surface. The plan is for the water to heat the Science site and surrounding buildings within the city centre.
Professor Paul Younger, Director of the Newcastle Institute for Research on Sustainability, said: "Our aim is to rise to the challenge of putting a novel form of deep geothermal energy at the very heart of city centre regeneration". He added that the project was "incredibly exciting" and could potentially provide a "fully renewable energy supply" for parts of the city.
The British Geological Survey has released the annual publication World Mineral Production. This publication provides comprehensive statistical data on minerals production, consumption and trade to 2009, estimates of production for major mineral commodities in 2009 and a commentary on commodities of major importance, for example, copper, gold, coal and nickel. This report is free to download from the MineralsUK website: http://www.bgs.ac.uk/mineralsuk/statistics/home.html
BGS has also released a new tungsten commodity profile, covering a broad range of topics including: mineralogy and deposits; extraction and processing; specification and uses; world resources and reserves; world production and trade; recycling and substitution; and a focus on tungsten in Britain. The report is free to download from the MineralsUK website: http://www.bgs.ac.uk/mineralsuk/statistics/mineralProfiles.html