This year has seen much discussion on the
economic situation in Asia and what this slowdown might mean
for various industries, with mining of particular interest. One
clear message that has been emphasised very strongly by
producers, junior companies and investors alike is that it is
not all economic doom and gloom in the region.
A positive outlook for the industry was
emphasised to delegates at the 4th South East Asian Industrial
Minerals Conference in Bangkok which was held in November, with
presentations painting a picture of a region ripe with
opportunity.
Speakers highlighted the mineral investment and
marketing opportunities in a region of over 600m people
(excluding China) in a series of lively discussions and
debates.
Thailand’s
vision
During the ASEAN Plenary session at the South
East Asian conference, host country Thailand’s
vision for the mineral sector was outlined by Thammasak
Pronpasert, director for Primary Industries and Mines, who
described the need to substitute fertiliser imports by
developing potash resources in two basins in north-eastern
Thailand.
Thailand has a host of industrial mineral
reserves as well as other resources including potash, copper,
gold and oil shale among its key resources. Other industrial
mineral resources in the country include limestone, gypsum,
shale and marl for the cement and construction industries, as
well as marble, granite, basalt, sandstone and slate.
The country also supplies the ceramic and glass
industries with kaolin, ball clay, feldspar, glass sand,
dolomite and pyrophyllite quartz, while its fertiliser and
chemical resources include rock salt, potash, phosphate and
perlite.
Pronpasert told IM on the
sidelines of the Bangkok conference: "There is potential for
>400m tonnes carnalitite and sylvinite."
According to Pronspaset, the country has a number
of positive attributes that investors should consider,
including an advantageous location, growing economy,
world-class infrastructure, ease of business and investment
promotion policies.
Among the incentives for investment have been
regulations from the Board of Investment (BOI), which allow for
exemption or reduction of import duty on imported machinery,
exemption of import duty on imported raw or essential materials
and an exemption of corporate income tax up to eight years.
Thailand also hopes to facilitate mining permit
applications by improving regulations and laws, and
coordinating with related governmental bodies. The government
is additionally looking to promote exploration and mining both
from domestic and foreign investors by having no limitations on
the size of permitted areas for exploration licences and by
creating mining zones for mineral development.
Another government focus in terms of overall
policy has been to support downstream high value-added
industries and green industries. Specific to the construction
and cement industry, plans are in place to develop domestic and
regional infrastructure.
According to AECOM’s 2013 Asia
construction outlook, Asia is predicted to be the fastest
growing market between 2013 and 2020. The Asian construction
market has maintained growth while Western economies have
slowed, accounting for around 40% of global construction
spending in 2012 and resulting in the largest regional
construction market worldwide.
Growth in Thailand specifically is predicted at a
rate of 3.4% a year out to 2018 by BIS Global Insight, and this
is likely to drive minerals associated with construction owing
to the use of paint, tiles and a growing
infrastructure.
Backing in the country is also being given to the
fertiliser industry in terms of supporting import substitute
fertiliser as well as price and income support schemes for
farmers. Overall, with particular emphasis on key industrial
policies in potash, quartz and asbestos, it is clear that the
government in Thailand is moving forward with reducing
complicated licensing policies, increasing transparency, as
well as pushing for 'greener’ mining.
Figure 1: Thailand’s ceramic
and glass mineral resources
Reserves
|
Million
tonnes
|
Feldspar (sodium)
|
4,735
|
Feldspar (potassium)
|
900
|
Kaolin and ball clay
|
844
|
Glass sand
|
80
|
Quartz
|
65
|
Pyrophyllite
|
N/A
|
Source: Thailand Department of Primary Industries
and Mines
Refractories
According to independent consultant Richard
Flook, who spoke at the conference on the refractory industry:
"The world economy has been climbing a wall of worry." He added
that"most commentators are expecting growth in the US, ASEAN
countries and China".
The huge amount of metal castings (60% of global
output) and cement (70%) concentrated in Asian countries are
major drivers for refractories consumption.
Flook noted that whereas paper and plastics
manufacturers "look for ways to incorporate
more fillers in their products, the request from
refractory consumers is how to reduce consumption".
Trends in refractory consumption show a downtrend
in the kg of refractories used per tonne of steel produced as
evidenced by the current usage of 20kg/t of steel production in
China compared with the global average of 15 kg/tonne and as
low as 2kg/tonne at an Australian steel producer.
Flook said that he saw the "long term aim as
being 5kg/tonne of steel" which will impact negatively on
consumption of chromite, bauxite and magnesia products.
Figure 2: Thailand’s mineral
resources |
|
Source: Department of Primary Industries and
Mines |
Proppants
Given the huge shale gas and oil potential of
Asia and, as yet, no good quality frac sand compared with
benchmark Northern White frac sand of the US, Joe Roettle of
Ecutec Barcelona SL (business unit of MI Sweco), believes there
is huge potential growth for ceramic proppants in the
region.
At the South East Asia event, Roettle outlined
that perfectly spherical proppants may be on the way. Growing
proppant markets in Asia (and globally) might offset dwindling
refractories demand for aluminous minerals like kaolin and
bauxite.
According to Canadian junior, Prime Meridian,
there are only a handful of companies in the region producing
high quality ceramic proppants, meaning there is massive
underexploited potential for ceramic proppants supply.
Demonstrating its belief in the potential of the area, the
company recently purchased Hallmark Minerals, a ceramic
proppants producer in India, which will enable it to gain a
supply foothold in Asia.
"The reason we’re doing this
transaction is because we feel there is increased demand in the
region, otherwise we wouldn’t be going at this
aggressive expansion," the company’s president,
Michael Dehn, told IM in an interview (see
p62).
Although the industry standard for ceramic
proppants is bauxite and kaolin, Prime Meridian is also in the
process of testing other materials in Canada for their proppant
potential, incuding fly ash, silica, titanium, iron oxide and
frac sand.
Figure 3: Growth in construction spending in
Asia 2013-18 (%pa) |
|
Source: BIS Global Insight (2012) |
Regulatory difficulties in
Myanmar
Elsewhere in South East Asia, Myanmar has also
been hailed as having a number of opportunities in industrial
minerals.
According to Dennis Meseroll, managing director
of consultancy Tractus Asia, the numerous mineral opportunities
in Myanmar including dolomite, gypsum, barite (barytes) marble,
graphite, bauxite, minerals sands and glass sand.
These industrial minerals opportunities in
Myanmar, were backed up by Kyaw Din, deputy director general,
Geology Survey, who also spoke at the South East Asia
Conference in November.
The country has recently started to open up for
business, Meseroll explained, describing Myanmar as the "new
frontier for minerals opportunities".
However, the regulatory environment is not easy
for foreign investors, something it has in common with other
South East Asian countries such as Indonesia and Vietnam, as
"raw minerals cannot be exported and Investors encouraged to
establish mineral processing or refining plants" explained Kyaw
Thet, director, department of mines, Myanmar.
Thet described that "grass-roots exploration is
required by foreign investors, or that they should joint
venture (JV) with local licence holders and that production
sharing contracts (PSC) can be established with the
State."
"As at October 2014 a total of 2,065 mineral
exploration/mining permits had been issued including 138 large
scale permits; 1,289 small scale permits and 523 exploration
permits," he added, noting further that "foreign investors
cannot participate in so-called small licences".
Despite the current difficulties faced by foreign
investors, new mining laws and regulations are expected to be
implemented in the near future by the government of Myanmar to
invite what it calls foreign investment for mutually beneficial
gains.
Medium scale mining and trading licences are
expected to be included under the new mining laws, while the
land rental fee (dead rent), royalties and PSC ratios will also
be revised. Another positive revision is the anticipated
creation of environmental and CSR funds and the mine closure
plan and EMP will be seriously considered.
Figure 4: Industrial Minerals production
in Myanmar, tonnes
Mineral
|
2011-2012
|
2012-2013
|
2013-2014
|
Gypsum
|
57069
|
38579
|
38579
|
Clay
|
3720
|
3150
|
2550
|
Bentonite
|
170
|
550
|
1552
|
Dolomite
|
1245
|
170
|
400
|
Limestone
|
110967
|
427733
|
666990
|
Quartz
|
3225
|
68000
|
455
|
Gypsum
|
8160
|
25500
|
60510
|
White clay
|
550
|
1200
|
1700
|
Antimony
|
4376
|
-
|
-
|
Source: Tractus Asia
Vietnam chromite
As well as Myanmar, neighbouring Vietnam presents
opportunities in barite, graphite, rare earths, mineral sands
and bauxite but, as pointed out by Martin Lynch of SON
Minerals, "foreign ownership in mining operations is unusual in
Vietnam, as mining is dominated by State company
Vinacomin".
That aside, Vietnam is a leading regional
exporter of barite for the drilling industry, but it does have
to import coal due to depletion of local reserves.
The country also hosts vast deposits of chromite,
of which those with the greatest economic value are found in
areas around the Nui Nua Mountain in the Nong Cong district,
Thanh Hoa province. The mines are located 18km from Thanh Hoa
City and 80km south of Ha Noi.
Originally discovered by French geologists in
1927, chromite mining at Co Dinh began in 1930. Production
reached its peak in 1963 with 36,084 tpa, and between 1965 and
1984, 353,629 tonnes concentrate of 46%
Cr2O3 had been exploited, though
production fell to 10,000 tpa between 1985 and 1995.
Chromite ores exist in two forms, the primary and
the placer, although the majority are found in the placer.
Chromite placer is widely spread in the Quaternary Basin close
to the northeast of Nui Nua Mountain, at around 9-13km long,
4km wide and covering an area of about 36.5km2.
Three areas have been prospected so far; Tinh Me to An Thuong,
My Cai to Hoa Yen and Mau Lam to Ban Ang.
The small size of the chromite placer grades
causes some problems when used for chrominium metallurgy,
although it works well when used in the chemical, refractories
and foundry industries. The majority of chromite grades fall
between 0.07-0.7mm, which is very favourable for the refractory
industry.
Test results show that the chromium-magnesium
bricks manufactured from the Co Dinh chromite ore always meet
high quality standards, corresponding very favourably to some
brick grades of Austria, the Czech Republic and Russia.
Figure 5: Geological section of Co Dinh
chromite deposit (Thanh Hoa province) |
|
Source: Dinh Van Dien and Tran Xuan Duc,
1980 |
Sustainability in Vietnam
In the Co Dinh deposit area there are many mines
and processing plants with outdated technology and with little
concern for the environmental impact that such activity leaves
as a consequence. The total amount of ore actually recovered is
very low at about 35%, and the considerable resource loss has a
significant environmental impact.
The mining, washing, sieving and panning out of
ores is mostly carried out using intensive manual labour and
the resultant product is generally low in content (about 40%
Cr2O3). Better management of mining
activity should be the most important consideration in any
solution that might contribute towards economic growth and
social development for the region.
An agreement is already in place with the
Vietnamese government for a strategic mining and processing
target, which was set up as early as 2006. The Vietnam Group of
Coal and Mineral Industry (Vinacomin) coordinated with UK-based
Archipelago Resources Plc (ARP) to implement the results of a
study for the development of mining and processing of the Co
Dinh chromite deposit.
In 2006, ARP completed a study and estimation of
the total resource available in Co Dinh, stating that the
estimated result of the reserve available is
'satisfactory’. On the basis of these results, the
Vietnamese government supported both Vinacomin and ARP in
putting forward plans for a JV company specialising in mineral
mining and deep processing using advanced technology and modern
mining techniques.
By July 2006, the JV was expected to supply all
the professional means for the development of the Co Dinh
chromite mine, as well as Thanh Hoa, following permission to be
granted for mineral mining in the area to be issued by the
Ministry of Industry (now known as the Ministry of Industry and
Trade) for the member company belonging to Vinacomin, to
develop an area of 16.6 km2 with an anticipated
reserve of 4.2m tonnes and an average content of 3.44 %
Cr2O3.
The agreement included conditions for the mining
companies to adhere to international rules on the sustainable
development of mining activities, as well as resource
development in the Co Dinh mine.
Vinacomin and ARP realised the project with the
aim of implementing clear steps for the development of mining,
recovery and deep processing of mineral resources in the Co
Dinh chromite mine, extracting material together with a means
to both protect and restore the environment.
On the basis of the estimated chromite resource
in the north eastern area of the Nui Nua mountain range, the
recovery of the mineral resource is to be carried out in two
main zones within the permitted area of 16.6
km2.
The recovery consists of two main project areas 1
and 2, with five further identified zones, projects 3 to 7, and
a further mining development, project 8. All of the zones
were planned to be implemented in a three stage project
development, covering all of the eight development zones.
Mining of the chromite resource from the Co Dinh
deposit is now anticipated to be implemented in three stages,
with each stage taking up to five years to complete. Output of
mining and production of chromite concentrate is expected to
increase over a definite plan, showing in Table 5.
Studying ways to perfect the mining of chromite
ore using deep mining and processing technology alongside ways
to protect the environment is a strategy that has gained
universal agreement for continued chromite mineral development
in Vietnam.
The implementation of the Co Dinh chromite
project is expected to meet all of the criteria that have been
agreed for sustainable development with economic benefits for
all connected partners, both in terms of natural environmental
protection as well as environmental and social development,
with the overall development being supported by one management
structure.
The benefits expected from the development of the
Co Dinh mine include: a minimum impact on the environment,
overcoming the serious pollution to the environment that
existed prior to the new agreements, giving back approximately
10km2 of land for agriculture, creating many new
jobs - more than 8,000 - and training professionals from the
local population as well as the creation of new infrastructure
to facilitate integrated social development.
Figure 6: Development zones and
anticipated ore output
Stage
|
Development (project)
name
|
Mining steps
|
Anticipated output
(concentrate of content 46%
Cr2O3)
|
Stage I
|
Project 1
|
2011-2016
|
2011 - 2012: 3m tpa of
crude ore
(111,000 tonnes of
concentrate per year)
|
2013 - 2015: 6m tpa of
crude ore
(221,000 tonnes of
concentrate per year)
|
Project 2
|
2017-2021
|
2016 - 2017: 12m tpa
of crude ore
(443,000 tonnes of
concentrate per year)
|
2018 - 2021: 19,250m tpa
of crude ore
(710,000 tonnes of
concentrate per year)
|
|
Project 3
|
2022-2026
|
2022 -2026: 19,250m
tpa of crude ore
(710,000 tonnes of
concentrate per year)
|
Stage 2
|
Project 4
|
2027-2031
|
2027 - 2031: 19,250m tpa
of crude ore
(710,000 tonnes of
concentrate per year)
|
Project 5
|
2032-2036
|
2032 - 2036: 19,250m tpa
of crude ore
(710,000 tonnes of
concentrate per year)
|
Project 6
|
2037-2041
|
2037 - 2041: 19,250m tpa
of crude ore
(710,000 tonnes of
concentrate per year)
|
Project 7
|
2042-2044
|
2042 - 2044: 19,250m tpa
of crude ore
(710,000 tonnes of
concentrate per year)
|
Stage 3
|
Project 8
|
2045-onwards
|
2045 - onwards: 19,250m
tpa of crude ore
(710,000 tonnes of
concentrate per year)
|
Chromite mining and
processing
Most of the mineral reserve from the Co Dinh
chromite project zones lies under a thick layer (20 to >40m)
that requires careful planning for large scale deep mining to
guarantee effective mining and recovery of the mineral
resource.
Before the mining of each zone takes place, a
report on the estimated environmental impact needs to be
submitted to the Ministry of Natural Resources and the
Environment for approval. Once approval has been granted, the
mining processes must abide by the conditions outlined for each
project. Following the mining of each zone, work needs to be
carried out to level the area, returning the land to pre-mining
conditions and restoring the environment that has been impacted
by each mining project.
Vinacomin and ARP are planning to carry out a
feasibility study for the possible implementation of a
ferrochrome plant to be constructed with the capacity to
process 150,000-200,000 tpa from concentrate from the
mines.
Both companies have acknowledged that the first
difficulty that needs to be faced in the mining and processing
of ore from the Co Dinh mine is that of the clay content, which
is very high in chromite ores, and has at least a content of
40% of ore volume.
The adhesive quality of the clay requires further
study of the loose clay striking method, separating the
concentrate of fine grain chromite from the coarse clay.
Detailed studies have already shown that this can only be
achieved by separating grains in the layers within the grain
band of under 300µ. The scale of recovery is expected to
increase to its maximum only if the coarse ores are separated
into the many different grain classifications and then
processed for chromite from each size independently.
A study of processing technology that was used
before 2009 revealed that the recovery rate for chromite was
between 30-35% of concentrate with final content recovery in
the region of 40% Cr2O3. However, the
processing technology that was tested and finally put into
production in between 2009 and 2010 using a combination
of gravity and magnetic processing methods,
produced a recovery rate of 46% Cr2O3 of
the concentrate or higher, with a real recovery rate of
over 62%.
Bentonite as a by-product in
Vietnam
Additional returns in Vietnam are expected to
come from by products such as nickel, cobalt and bentonite as a
result of chromite processing.
The electrolyte method of nickel and cobalt
concentrate recovery is expected to be applied as part of the
processing of the mined ores, producing metals for both the
domestic market and for export. With a total expected output of
200,000 ferrochrome tpa being recovered, a recovery of about
9,500 tonnes of metal nickel and 1,400 tonnes of corresponding
metal cobalt is also anticipated.
Nontrolite (bentonite) clays are expected to
accumulate in concentrate form in the rejected mud produced
during processing before the implementation of the magnetic and
gravity processing steps.
Processing nontrolite clay as a by-product of the
chromite mining process is expected to produce a better overall
return of quality products compared with the clay being
produced at present at Co Dinh with coarse grains of over
20µ being rejected.
The resultant method of increasing the surface
area of the clay (BET) by increasing its water absorption
capacity also forms a product that is hoped to form part of a
development in agriculture by using the subsequent by-product
as a soil conditioner or fertiliser.