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Industry news: December 2009

UK geothermal energy scheme secures funding

The Department for Energy and Climate Change (DECC) has granted £1.5 million in government funding for the development of a geothermal power station in Cornwall. The scheme is run by Geothermal Energy Ltd (GEL) and is to be based in Redruth. It is hoped that the plant could generate 55 megawatts a year for local use and 10 megawatts a year to put back into the national grid.The total cost of a geothermal energy plant could be as much as £40 million and requires drilling wells up to five kilometres deep. If Cornwall County Council approves the plans, the plant could be operational by 2013 according to GEL.


Coal Authority approves coal gasification schemes


The Coal Authority has announced that it has awarded Clean Coal Ltd five licenses to investigate the potential for underground coal gasification. All five sites are offshore and are located in Swansea Bay, the Humber Estuary and off the coast of Sunderland, Cromer in Norfolk and Canonbie in Dumfriesshire. Clean Coal Ltd has announced plans to explore the sites for commercial gas extraction over the next 12–18 months and potentially to have coal gasification plants running by 2014; making these potentially the first commercial UK underground coal gasification operations. The investigations into the five sites will be conducted using seismic surveys and boreholes and will look at coal resources up to 1000 metres below ground. Clean Coal Ltd estimates the combined reserves for all five sites to be around one billion tons of coal.

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Oil industry body welcomes pre–budget report

Construction materials, BGS©NERC

Oil and Gas UK, the representative of the UK oil and gas industry, has welcomed tax announcements for the oil and gas sector in the pre–budget report. The report reveals that more projects would be eligible for a new field tax allowance including high–pressure, high–temperature projects which Oil and Gas UK see as being very important for the future development of the UK continental shelf. The Chief executive of Oil and Gas UK commented: “We are also encouraged that the Chancellor indicated his desire to continue engaging with the industry to ensure that infrastructure is developed west of Shetland. This infrastructure is essential if the UK is to benefit from the energy security and broader economic benefits of these oil and gas reserves, which represent one fifth of our future resource. As the country emerges from recession, it will be necessary for the Government to consider more profound changes to the tax regime which reflect the high cost and increasingly mature nature of the basin.”

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Plans to expand opencast coal site

Opencast coal mine, BGS©NERC

Banks Mining, part of the Banks Group, has announced it is preparing to submit plans to Northumberland County Council to extract an additional two million tonnes of coal from its Shotton opencast site located near Cramlington, Northumberland. The current permission allows for the extraction of 3.4 million tonnes of coal as well as two million tones of shale and 750 000 tonnes of fireclay to be extracted over eight years; mining commenced at the site in 2008.Banks Mining wishes to extend the life of the site, which employs over 110 people, by two years to extract the extra coal. Banks Mining says it is scheduled to submit the plans sometime in 2010. David Gosling, senior development planner at Banks Mining, says “Demand remains high for the coal that Shotton is presently producing, and being able to take out two million additional tonnes of high quality coal will avoid it being effectively sterilised, as it would otherwise not be economically viable to recover.

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MPA warn that planning system could lead to shortfall in aggregates supply

Aggregates, BGS©NERC

The Mineral Products Association (MPA) has released a statement outlining that failures in the current planning system could inhibit the recovery of the construction sector. The MPA commented that only 20 out of an estimated 200 new–style minerals development plans have been produced by mineral planning authorities leading to uncertainly in the minerals sector. Simon van der Byl, Executive Director of MPA, said, “The recovery will only be as good as our planning system allows it to be. A knock on consequence is that the annual replenishment rate for aggregates – materials essential to construction and maintenance – are typically only 60 per cent, raising the prospects of localised supply shortfalls as construction activity picks up from mid 2010.” The MPA also warned of plans announced by the Conservative Party to abolish regional planning and introduce more local control, stating that this could lead to the importance of developments regionally and nationally not being properly considered.


Council wins battle to cut minerals allocation

Surrey County Council has had its minerals allocation reduced by 50 000 tonnes per year by the government.  Surrey argued that its original allocation of 1.32 million tonnes of sand and gravel was too high and that there were no further locations where minerals could be extracted without causing undue harm to the environment or residents.  The council argued that if they were required to comply with theoriginal allocation, reserves at existing sites would be depleted within 18 years, lower then government guidelines, which could potentially harm the local construction industry. Surrey County Council are one of several councils in the south of England that are fighting to have there allocations cut.


Pre–budget report outlines tax increases for cement industry

UK cement manufacture, BGS©NERC

The pre–budget report, released on 9/12/2009, has outlined plans to reduce the Climate Change Levy discount rate for sectors with Climate Change Agreements from 80 per cent to 65 per cent.This would affect many cement and lime manufacturers who currently have Climate Change Agreements with the government which entitles them to a discount on the Climate Change Levy. Commenting on the move, the Mineral Products Association’s Chief Executive, Nigel Jackson said, “The cement and lime industries are going through one of the deepest and most prolonged recessions since the Second World War. Year on year, cement sales are down by almost 30 per cent and the industry is shedding jobs. The new cost doubles the amount the industry has to pay in Climate Change Levy.This is yet another fiscal burden on businesses that provide essential mineral products which are already struggling with the impact of the recession.”


Scotgold announces high grade gold

Exploration drilling, BGS©NERC

Scotgold Resources Ltd has announced the results of its 2009 sampling programme for its Glen Orchy license in Scotland. Scotlgold says it has received results confirming a significant number of high–grade gold values in the 250 km2 area surrounding the Cononish gold and silver deposit. The regional outcrop sampling program, which looked at nine sites, obtained maximum values of 217 and 196.8 grams per tonne of gold and over 200 grams per tonne of silver from a vein north east of the Cononish deposit. These results verify a historic database of gold and silver assays on the area already used by Scotgold.The mineralisation in the high–grade outcrops is aligned with regional structures similar to the Cononish deposit leading Scotgold to assert that the area has the potential for other similar scale deposits. A follow up exploration program, including drilling within the Cononish/Glen Orchy licence area, is now being planned for 2010.

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