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Industry news: November 2008

Plans for new coal–fired power station

Coal power generation, BGS©NERC

Dong Energy, the state owned energy company of Denmark, has announced plans to construct a coal–fired power station to be built on the Firth of Clyde. The site of the existing nuclear power station Hunterston B, which is to be shutdown in 2016, has been identified as the preferred location for the project. This would give the power station access to the nuclear facility's deepwater port allowing imports of coal from overseas; an important consideration because imported coal produces lower emissions than indigenous Scottish coal. The new power station will cost up to £2 billion, include emission reducing features and the possibility for carbon capture and storage. A spokesman for Dong Energy has stated that the project is still at a very early stage and public consultation will be conducted.


UK Coal looks to develop wind farm potential on its sites

Wind farm, BGS©NERC

UK Coal Plc has signed an agreement with Peel Energy, a company specialising in wind farm development, to look at the possibility of developing wind farms on property owned by UK Coal. UK Coal has stated that this will not affect their mining business and the land considered for development would have little value for alternative commercial use. The agreement provides Peel Energy with a two–year period to identify and evaluate 14 sites, already identified by UK Coal, for wind farm development. If all 14 sites were to be successfully developed there is potential for 54 turbines generating a maximum of 133 MW of power.

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Quarry products industry confirm construction recession

UK quarry, BGS©NERC

Figures released by the QPA (Quarry Products Industry) show a very sharp fall in sales volumes of concrete, aggregate and asphalt in the third quarter of 2008 compared to the same period in 2007 Volumes of concrete fell by 21%, sand and gravel by 17%, crushed rock aggregates by 15% and asphalt by 2%. The sharp decline in concrete and aggregates, products which are mainly used in the early stages of construction projects, show the rapid decrease in large-scale commercial and industrial projects, as well as declines in the housing sector.The QPA predict a further significant decline in aggregate and concrete demand into 2009 as the downturn in construction output worsens. Asphalt demand is also predict to fall further due to shortfall of major new road contracts.

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More job losses and closures for the minerals industry

Sand and gravel, BGS©NERC

The downturn in the construction sector has continued to badly affect aggregate producers and further job losses and site closures were forced this month. The owner of Aggregate Industries UK Ltd, Holcim, has announced that is cutting 500 jobs in response to the economic downturn.These cuts are to be made by mothballing quarries, natural wastage and redundancies. A spokesman for Holcim commented that the losses will come from all levels and functions of the organisation and are necessary to remain competitive. Cemex UK Ltd has announced the closure of Barrington cement operation in Cambridgeshire in response to the slow down in construction causing up to 87 redundancies. Cemex will now focus on cement production from its Rugby and South Ferriby sites and may possibly convert the Barrington site to a transport depot.UK-based quarrying firm Ennstone Plc has also announced job cuts. The company plans to reduce its 1 200 strong UK workforce by 10 per cent to try to meet planned annual cost savings of £2 million.The positions are to go before the end of the year.

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Office of Fair Trading raids cement manufacturers

Cement works, BGS©NERC

In the continued investigation into cement industry practices in the UK and Europe the Office of Fair Trading (OFT) has carried out a series of raids against major UK cement manufacturers Aggregate Industries Ltd (owned by Holcim), Hanson UK Ltd (owned by Heidelberg Cement). Lafarge Cement UK Ltd and Cemex UK Ltd.The raids took place on the 4th and 5th of November and were backed by the European Commission who are carrying out widespread investigations into pan–European cement cartel practices including the UK.The European Commission released a statement saying "The Commission has reason to believe that the companies concerned may have violated EC Treaty antitrust rules that prohibit cartels and restrictive business practices and/or abuse of a dominant market position" and stressed that the raids were not a sign of guilt but simply evidence gathering.

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Production cuts at Lynemouth smelter

Lynemouth smelter, BGS©NERC

The owners of the Lynemouth aluminium smelter, Rio Tinto Plc, has cut a third of its output from the plant in response to high electricity prices, low aluminium prices, and in an effort to reduced growing worldwide aluminium stocks.The production cuts for the smelter based in Northumberland, which has the capacity to produce 175 000 tonnes of aluminium per year, should not result in any job losses a spokesman for Rio Tinto announced.The cuts are only temporary and the plant is expected to be back at full capacity in 2009.

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Resource upgrade at Hemerdon

Hemerdon pit, BGS©NERC

A drilling programme at the Hemerdon tin and tungsten project, located in Devon, has led to a large increase in estimates on both tonnage and grade of the deposit. Wolf Minerals Ltd, the owner of the deposit, has announced that the drilling by independent consultants, SRK consulting, has led them to raise their resource estimate to 97.4 million tonnes at 0.22% tungsten trioxide and 0.023% tin.This is a 20 per cent rise on the previous estimate of tonnage from March this year and a two percent increase in the grade. Confidence in the resource estimation has also been increased with the majority obtaining "indicated" status according to JORC (Joint Ore Reserves Committee) guidelines, replacing its previously "inferred" status. Work continues to produce a reserve figure to comply with JORC guidelines and Wolf Minerals say this increased geological understanding means larger scale mining options are being examined.

Source : [No longer available]

BHP Billiton ends Rio Tinto takeover bid

BHP Billiton Plc has called off its takeover attempt of UK based Rio Tinto Plc.The takeover which would have been worth £38 billion ended due to a combination of low metal prices and demand as well as requirements from the European Union's Competition Commission for the combined company to shed some of its iron ore and metallurgical coal assets. BHP Billiton, announced that the deal was no longer in the interest of their shareholders and they plan to write off the $293 million incurred whilst progressing the deal. CEO of BHP Billiton Marius Kloppers said "Recent global events and associated falls in commodity prices have altered risk dimensions. BHP Billiton is very focused on balance sheet strength. Accordingly, the greater debt exposure of the combination plus the difficulty of divesting assets have increased the risks to shareholder value to an unacceptable level."

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Nickel commodity profile published on Mineralsuk

The Nickel Commodity Profile, the latest in this series from the British Geological Survey (BGS), is now available to download from

Nickel is of strategic importance to the steel industry. Over the last 12 months, it has been the subject of international focus due to record price levels and periods of very low supply.The Nickel Commodity Profile from the BGS provides a succinct summary of issues related to nickel resources, production, uses and trade which will be a valuable resource to all mining industry stakeholders.

Nickel is an important constituent of stainless steel, a metal with many vital applications. It is also used for superalloys for power generation, aerospace and military uses; in electroplating and in rechargeable batteries. Between 2003 and 2007 world production increased from 1.2 to 1.7 million tonnes. Whilst Chinese demand for nickel has more than doubled in this period, European consumption has remained relatively stable. In 2007 there was a global shortage of nickel. Caused by factors such as record demand for stainless steel coupled with labour problems and delays in several new operations.This led to record nickel prices. Consequently some consumers turned to lower priced alternatives which have since helped to reduce the price of nickel.

"Nickel is a metal which is of key importance to the global economy." says Andrew Bloodworth, Head of Minerals at the BGS. "This Commodity Profile provides an excellent overview of a range of issues relating to the production and trade of this metal."

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