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Industry news: September 2010

The OFT launches a study into the UK aggregates market

Aggregate production, BGS©NERC

The Office of Fair Trading (OFT) has announced that it is to open an investigation into the UK aggregates market. The industry is dominated by five global players in the UK – Holcim, Heidelberg, Cemex, Lafarge, and Tarmac – and generated a turnover of 4.8 billion pounds in 2008. Aggregates is a sector with high barriers to entry, increasing concentration at the local level and government involvement in the form of a national system of control over outputs. The study will look at all of these factors to determine how they influence competitive conditions and whether the market delivers good value for money to tax payers and end consumers as the cost of aggregates flows through to the construction of essential infrastructure. Heather Clayton, Senior Director of Infrastructure, said 'In the present climate, well-functioning markets are even more important to help spur economic growth. Aggregates is an important sector in its own right but it is also part of the larger construction industry which plays a key role in the country's economy. Because the cost of aggregates is reflected in the price consumers, and tax payers, pay for essential infrastructure, from housing through to roads and major capital building projects, it is important that the market is as competitive as possible.'

The British Aggregates Association (BAA) has welcomed this decision. Director Robert Durward said 'An investigation of the UK aggregates market is overdue and is something we have long called for. In areas of the country where few independent companies remain prices are a great deal higher. The majors therefore have the ability to use this revenue stream to subsidise their activities in other areas to the detriment of smaller operators.'

The Mineral Products Association says it is 'Confident that the operation of the current mineral planning system will be proven to be sound and critical to the construction and manufacturing industries which depend upon these essential supplies. The system has a proven track record of delivering a steady and adequate supply of aggregates over the last 35 years throughout periods of recession and growth.'

Source: [No longer available];;

BAA defeats UK Government in EU court

Gravel aggregate, BGS©NERC

The British Aggregates Association (BAA) has won its case in the European Union General Court against the exemption or derogation from the Aggregates Levy in Northern Ireland. At present quarries in the province pay 40 pence per tonne under the levy exemption, whereas UK mainland producers have to pay two pounds per tonne. The Court heard how the Aggregates Levy derogation for Northern Ireland involved state aid which, according to the EU Commission, was justified by reference to the ‘Environmental Guidelines' that were in force at the time of the decision to allow the exemption. However, the Court agreed with the BAA that the EU Commission had not conducted a diligent investigation of the Northern Ireland exemption or of the BAA's complaint, and as such the Commission could not, therefore, lawfully decide that the derogation was compatible with EU law. The Court's finding – that the EU Commission was wrong – effectively annuls its decision and means the Commission must now reconsider whether the exemption is legally acceptable. Commenting on the General Court’s finding, BAA director Robert Durward said 'We are delighted that the Court agreed with us that the proper process was not followed with the Northern Ireland derogation and that it will have to be revised. The previous UK Government proposed to devolve the levy and this judgment now represents an excellent argument for it to be scrapped altogether.'


UK Coal releases financial results

Open cast coal mining, BGS©NERC

UK Coal has released its financial results for the six months ended 26 June 2010. Highlights include:

  • Group sales £141.3 million (H1 2009: £159.8million)
  • Loss before tax of £93.2 million (H1 2009: £81.5 million loss)
  • Total net debt, excluding restricted cash £257 million (December 2009: £181.9 million)

The group has completed its deep mining transition. Production from Kellingley and Thoresby has increased by 100 per cent and 50 per cent respectively compared to H1 2009 and the Daw Mill mine is now back to historic production levels. Total production for the six months was 2.7 million tonnes, compared to 3.7 million tonnes in the first half of 2009. 2.2 million tonnes was from deep mines and 0.5 million from surface operations. Chairman David Jones, commented 'Our half year results are in line with the guidance we have given. They reflect the challenges we faced in completing the transition of our deep mining business which led to a substantial drop in production in the first quarter of this year. With the transition completed, however, production in the second quarter rose sharply and is now living up to our expectations and demonstrating the benefits of the substantial investments we have made. We are therefore able to confirm our guidance for full year production of 7.6 million tonnes, approaching three times the half year total.'

Source: [No longer available]

Conisbrough's Nearcliff Quarry to reopen after 20 years

Limestone quarry, BGS©NERC

The Nearcliff Quarry in Conisbrough near Doncaster is to reopen despite objections from local residents. Quarrying at the site ended in the 1950s and it was later used as a dump for more than 800 thousand tonnes of waste limestone from nearby Cadeby Quarry. Mineral work stopped altogether in 1990 when the council took enforcement action because planning permission had not been granted for the removal of limestone waste from the site. Doncaster Council turned down an application for quarrying to resume in 2006. However, it has now approved plans by Taylor Woolhouse Holdings for more than 3000 tonnes of limestone a week to be extracted for the next eight years. The council decided to grant permission despite more than 300 objections citing concerns about the use of blasting, site access, traffic and pollution. South Yorkshire Police backed the resumption of quarrying, saying it would end problems of anti-social behaviour, such as off-road motorcycling, associated with the site. The planning proposal argued that removal of the waste limestone and quarrying 200 thousand tonnes of virgin limestone would assist regeneration.


Portland Stone Firms Ltd goes into administration

Quarry, BGS©NERC

One of the last remaining suppliers of the world-famous Portland stone has gone into administration. Stone Firms Ltd, on Portland, near Weymouth in Dorset, operates three quarries and is a leading supplier to the construction and masonry industry. The company employed 59 workers, the majority of which were made redundant upon appointment of administrators KMPG on Tuesday. Administrators said nine staff have been kept on and are hoping the company will be taken over as a going concern. Ian Corfield, Restructuring Director of KPMG, said 'Stone Firms Limited has a long and successful history of producing the world-famous Portland stone which has been used to build so many great monuments in the UK. The business has suffered a severe decline in revenue over the last two years as a result of the economic downturn which has had a huge impact on the construction sector. Unfortunately this led to a shortfall of cash and insurmountable pressure from creditors, leaving the directors no alternative but to request the appointment of administrators.'


Vattenfall opens the world’s largest offshore wind farm

Wind turbine, BGS©NERC

Vattenfall, one of the leading European energy companies, has officially opened the world's largest offshore wind farm, Thanet, off England's south east coast. The wind farm has 100 turbines and will generate 300MW of electricity, equivalent to the annual consumption of over 200,000households. Thanet will contribute a significant increase to green energy in the UK. Its construction has taken just over two years and it is expected to operate for at least 25 years. Each turbine is up to 115 metres tall at its highest point and the wind farm covers an area of 35 square kilometres. CEO and President of Vattenfall, Øystein Løseth, said 'With Thanet offshore wind farm, Vattenfall has taken a major step towards doubling its generation from wind power until 2011 and we continue to lead the way in offshore wind development. Wind power will be a corner-stone of delivering both profitability and sustainability for Vattenfall in the years to come'. He added 'This project would not have been possible without the British Government’s active support and its commitment to renewable energy.'


Unique scheme to tackle mine water pollution in Wales

Environment Agency Wales has introduced a pilot scheme to improve water quality at Cwm Rheidol mine near Aberystwyth. The mine has historically discharged large amounts of zinc and other metals into the River Rheidol which means it is failing to meet the 'good' water quality standards required by the European Union’s Water Framework Directive. Toxic metals will be stripped out of the mine water before it enters the River Rheidol, using an environmentally friendly method that requires no energy source apart from gravity. The treatment system will use a mixture of waste products, including cockle shells and compost, to encourage natural biological and chemical processes that clean the mine water. Similar methods have been successfully used to remove iron from coal mine waters, but this is the first time the method has been used to remove zinc and other metals from abandoned metal mines. If the pilot scheme is successful similar schemes could be used elsewhere in Wales, the UK and other countries to treat water that has been polluted from abandoned metal mines, with minimal cost to the environment. Paul Edwards, a Senior Environment Officer with Environment Agency Wales, said 'The work being done at Cwm Rheidol could also mean good news for other parts of Wales that suffer similar mine water pollution problems. Innovative projects like this one at Cwm Rheidol will help us achieve the challenging targets set by the Water Framework Directive.'

Source: [No longer available]

RSM first for Hanson

Bricks, BGS©NERC

Hanson UK has become the first brick manufacturer to achieve BES 6001 Responsible Sourcing of Materials (RSM) certification for all products from their UK brick production sites. The 'very good' rating covers all nine production sites which service the UK market. The company has also been certified for its aggregate blocks, precast concrete and block paving products, covering an additional six factories. The announcement follows certification of Hanson’s Thermalite aircrete blocks in May this year and their ready-mixed concrete and aggregates businesses in autumn 2009. Hanson UK's Head of Sustainability, Martin Crow, said 'This certification means that the RSM standard has been awarded to all of Hanson's aggregates, concrete and building products, encompassing over 300 UK production sites. It also takes us a big step forward towards our goal of obtaining the standard across all our product lines from all production sites.'