Industrial Minerals Inside Edge – 18 February 2013

By Mike O'Driscoll
Published: Monday, 18 February 2013

Imerys aims at fused alumina, oilfield, and filler markets; new bauxite sources

Welcome to approximately 60 seconds of reading Mike O’Driscoll’s take on the week’s news highlights in the industrial minerals world

Imerys’ mineral targets

Last week saw world leading industrial minerals group Imerys release its 2012 results, announcing a net income increase and growth in revenue.

It’s always instructive to see where Imerys is heading with regard to expansions and acquisitions in both minerals and markets.

The French company is making its first investment for some time in the fused alumina sector with construction of a $30m white fused alumina plant in Bahrain with Al Zayani Investments.

Product will be aimed at the abrasives and refractories markets, and no doubt the cheap energy sources of the region helped when deciding its location. Production is expected in late 2013.

Subsidiary C-E Minerals’ fused alumina plants take advantage of the hydroelectricity provided in Greeneville, Tennessee, and Puerto Ordaz, Venezuela.

In Europe, the acquisition of Goonvean’s kaolin assets in the UK has strengthened the group’s supply to speciality and ceramic markets.

In Asia, Imerys has increased production capacity of “ceramics activity” in Thailand (the group produces kaolin in the Ranong province). Ground calcium carbonate (GCC) production capacity serving the paper and packaging markets was increased in plants in Ipoh, Malaysia, and Miyagi, Japan. The Ipoh operation focusing on GCC grades for the growth in fillers in bi-axially oriented polypropylene used in personal care products.

South America has also seen activity from Imerys. Construction of a lime plant has commenced in Doresopolis, Minas Gerais, Brazil, for supplying a range of markets including steel, paper, chemicals, environment, agriculture, and construction.

This is an interesting move – Imerys is not known for lime production, elsewhere in the world its calcium carbonate reserves are normally exploited for the higher value filler markets. Clearly, Brazil’s filler markets are less than buoyant and/or the company is simply making the most of its reserves.

That said, Imerys has acquired Itatex Mineral Specialties, in Campinas, São Paulo, which produces kaolin for the paint, polymer, and rubber markets.

Perhaps most intriguing was the acquisition of bauxite reserves in Pará, north Brazil, of the former refractory grade bauxite producer MSL Minerais (eventually swallowed up by Vale but left idle after production ceased in 2003).

In the results, Imerys merely stated that the mineral is “essential to several refractory and abrasive applications” and so the guessing game continues among observers as to how the resource will be utilised.

One might be tempted to speculate that Imerys could well be assessing its newly secured bauxite reserves for a source of proppant grade bauxite feedstock.

Certainly, Imerys is all of a sudden keen on the oilfield sector. Not only has Imerys just entered the ceramic proppant supply market with a new 100,000 tpa plant in Andersonville, Georgia, but (without much fanfare it has to be said), the company has just formed what appears to be a new division – “Imerys Petroleum”, which replaces the earlier “Imerys Oilfield Minerals”.

Now Imerys can package together its considerable portfolio of oilfield minerals: ceramic proppants, calcium carbonate, graphite, clays, mica, diatomite, perlite, and metakaolin.

What, no frac sand or barite? Might not be for much longer – watch this space!

However, as Imerys’ formal business groups were reported in the 2012 results, its oilfield minerals remain dotted around the houses. For example, the new ceramic proppants operation is languishing in the already rather crowded “Minerals for Ceramics, Refractories, Abrasives, & Foundry” division. Perhaps changes are afoot in the not too distant future in this respect.

Emerging bauxite sources in the Americas

Just to note that First Bauxite’s development of its Bonasika bauxite deposit in Guyana has clearly attracted interest in the North American and European refractories market with its 14 February announcement of signing 11 Letters of Intent to enter into off-take agreements for 70,000 tpa of calcined bauxite.

Perhaps of no surprise was the additional announcement of First Bauxite evaluating its bauxite material for potential use as a feedstock for proppant production.

And why not? Ceramic proppant sources in the Americas are limited. The US hosts just three major domestic ceramic proppant producers, which use kaolin and bauxite feedstock (Carbo Ceramics, Saint-Gobain, and most recently Imerys), while in Brazil there is Mineraçáo Curimbaba using bauxite.

After that there are Chinese imports of ceramic proppants of varying qualities, mostly based on bauxite (I’ll be giving a presentation on all this at IM’s 19th Bauxite & Alumina Seminar, 13-15 March 2013, Miami, and even more will be discussed at IM’s Proppant Prospects for Europe, 30 April 2013, London, and Oilfield Minerals Outlook 2013, 19-21 June 2013, Houston).

However, First Bauxite is not alone. In the US, Potash Ridge Corp. has a project to develop by 2016 an alunite deposit (a hydrated aluminium potassium sulphate, KAl3(SO4)2(OH)6) at Blawn Mountain, Utah, which envisages, in addition to the primary target of 630,000 tpa sulphate of potash, some 3.3m tpa output of “51% alumina content bauxite.”

No doubt Potash Ridge will also be soon assessing its aluminosilicate reserve for potential refractory and proppant grade material.

Mike O’Driscoll is Global Head of Research and Consultant Editor at Industrial Minerals, previously he was Editor of IM 1995-2012.

T: +44 20 7827 6444; modriscoll@indmin.com

Is Europe the next major shale gas play and thus potential new market for frac sand and ceramic proppants? Find out at Proppant Prospects for Europe, 30 April 2013, London programme & registration.

Global trends in the supply and demand of all oilfield minerals will be examined at Oilfield Minerals Outlook 2013, 19-21 June 2013, Houston programme & registration