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Industry news: February 2010

Investment increase for UK oil and gas projects

Oil rig, BGS©NERC

A report released by Oil and Gas UK during February detailing offshore oil and gas exploration and development activity in the UK revealed that oil and gas projects under consideration for development have risen sharply over the last 12 months. The report, which is based on the spending plans of 70 companies, also showed that reserves being developed or in production have declined, possibly due to difficult economic conditions causing new projects to fail to meet the economic criteria of companies. Potential new field developments jumped from 73 from 56 year on year; the price of developing these new fields also rose by 20 per cent showing the increasing technical challenges in developing the UK continental shelf. Oil and Gas UK believes the UK continental shelf contains up to 25 billion barrels that can be extracted and under current industry plans, with strong investment, would supply half the UK demand by 2020.

Source: [No longer available]

Wind farm research facility considered for north east England

Wind turbine, BGS©NERC Wind turbine, BGS©NERC

The manufacturer Mitsubishi has revealed it is considering investing in a £100 million offshore wind energy research centre in the north east of England. The government has announced it would support the development and provide grants of up to £30 million. If the research centre were to be commissioned it would create 200 new skilled jobs. Mitsubishi chief executive, Akio Fukui, said a number of locations were being considered for the facility which would carry out research into the fabrication of the world’s largest turbine blades.


Delays for Daw Mill colliery

Colliery, BGS©NERC

UK Coal has announced it is to delay work on a new face at Daw Mill colliery, in Warwickshire, by a month due to geological conditions of the face being more complex than anticipated. UK Coal has said it is resolving these issues via the installation of a powered roof and is identifying actions to address the impact on working capital caused by this delay. The start of production on the new face is expected to begin around the end of March.

Source: [No longer available]

Mineral Products Association calls for government investment into quarrying industry

Sand and gravel quarrying, BGS©NERC

The Mineral Products Association (MPA) has warned the government not to cut public spending on new construction activity and risk harming an already suffering sector. Figures for 2009 show crushed rock and sand and gravel sales fell by 25 per cent and 23 per cent respectively. The MPA highlighted that, although the economic recession may have technically ended in the final quarter of 2009, the outlook for construction remains negative. Orders for new construction were down 14 per cent in the first eleven months of 2009 and 375 000 construction jobs were lost during 2008 and 2009. MPA executive director, Simon van der Byl, announced "Construction activity is one of the most effective means of stimulating economic growth and employment, but the evidence from our sector and elsewhere is that industry workload is still declining. We all recognise the scale of the public sector deficit but sustaining public investment in construction as much as possible over the next five years is absolutely critical to economic recovery and the quality of public services."


Aggregate Industries invests in UK construction market

Aggregate, BGS©NERC

Despite a continued decline in the UK construction sector Aggregate Industries has announced the creation of a European joint venture and has made three strategic acquisitions. The company has purchased 51 per cent of the Lytag Group, a supplier of a lightweight aggregate, 15 per cent of Ash Solutions a fly ash supplier and has expanded its Thames Gateway barging business. Aggregate Industries has also created a joint venture with Dansk Natursten, a Danish aggregate trading company, to import hard rock aggregate into Denmark. Bill Bolsover, Chief Executive of Aggregate Industries, said: "Aggregate Industries is keen to push forward. Our joint venture with Dansk Natursten provides a substantial growth opportunity within the Danish market which has almost no indigenous hard-rock reserves." The company hopes this activity will give it access to strategic markets around London and in sustainable aggregate solutions from secondary sources.

Source: [No longer available]

Fine for cement plant after safety breaches

Cement works, BGS©NERC

The Environment Agency Wales has imposed a fine of £300 000 on a Flintshire Cement works after several safety breaches. Castle Cement Ltd, which operates a plant at Padewsood, admitted four charges of exceeding dust and noise emissions as well as two fires at the plant which released smoke that could potentially have caused a cancer risk. Castle Cement admitted that it failed to maintain all plant and equipment in a good operating condition, failed to comply with enforcement notices, failed to operate appropriate techniques to minimise dust emissions and failed to control excess noise and vibration at the plant. According to the Environment Agency Wales the fine is one of the highest ever awarded for an environmental offence in the UK. The company has since invested £1.8 million trying to improve procedures.


UK fluorchemical producer to be taken over by Mexichem

Fluorspar mineralisation, BGS©NERC

The Ineos group has announced it is to sell Ineos Fluor to Mexican fluorspar producer Mexichem Fluor SA. Included in the sale are all Ineos Fluor operations in North America, Europe and Asia including Ineos Fluor UK's chemical manufacturing operations based in Runcorn, which employs around 250 people. However, Ineos will retain ownership of its UK fluorspar mining subsidiary, Glebe Mines Ltd, the operators of a mine and quarry in the Peak District National Park. Ineos stated that "the business (Ineos Fluor) no longer fits in with the group's portfolio, which is focused on the large-scale production of petrochemicals." This has caused some concern to stakeholders in Glebe Mines, who will continue to supply fluorspar to the Runcorn site throughout 2010.

In total the deal is worth $350 million.The sale will not be complete until the end of March following regulatory filings and approvals.

Source: [No longer available]

Significant progress for Scotgold

Mine adit at Cononish, BGS©NERC

Scotgold Ltd, the owners of the Cononish gold and silver prospect, made several significant advances during February. After three years of consultation with government and local communities Scotgold has submitted a planning application to extend planning permission at the Cononish site. The Cononish site previously had planning permission for a mine from a previous owner, which expired in 2007. Scotgold is now looking to prolong the original permission and expect a decision by June this year.

New exploration results also brought good news for Scotgold during February as drilling at breccia pipes at Beinn Udlaidh, part of the company's Grampian gold project, returned results of up to 6.99 grams per tonne gold and 40.24 grams per tonne silver. This drilling is to be followed up by a field mapping, rock chip sampling and an expanded drilling program.

Scotgold also listed on the Alterative Investment Market (AIM) on February 24. The company raised £704 000 ahead of the initial public offering through the placing of 15.3 million shares at 4.6p per share.

Sources: [No longer available], and