Vermiculite rising

By Siobhan Lismore-Scott
Published: Thursday, 28 June 2018

New supply from Uganda and Turkey pushed up global vermiculite production in 2017. Meanwhile, prices have increased out of the United States because customers are demanding higher grades.

Vermiculite is a hydrated magnesium-aluminium silicate - its typical composition is 38-46% silica (SiO2), 10-16% alumina (Al2O3), 16-35% magnesia (MgO) and other compounds such as calcium, iron, potassium and titanium oxide. 

Owing to its lamellar structure, similar to that of mica, vermiculite expands 6-30 times the original volume of vermiculite concentrate when heated above 870°C (1,598°F) through a process called exfoliation.

Exfoliated vermiculite is chemically inert, with a melting temperature of between 1,200°C (2,192°F) and 1,320°C (2,408°F). It is non-combustible and is a good insulator of electricity, heat and sound.

Vermiculite is widely used in horticulture, owing to the structure of the mineral, which allows it to control soil moisture and host mineral fertiliser. Because of its specific mineral properties, vermiculite lends itself to a variety of other commercial applications such as in construction and packaging. 

Horticulture accounts for at least 50% of vermiculite’s end market. Other market applications include building plaster; fire protection; refractory; friction linings; special coatings; animal feed; and packaging.

Demand varies between 450,000 tonnes per year and 500,000 tpy, according to Palabora, the world’s largest producer.

New supply

Production of vermiculite increased in 2017 from the previous year via a ramp-up of new facilities in South Africa and Uganda, according to the United States Geological Survey. This year, expansions in Brazil and Turkey have led to expectations of bolstered supply, along with some production increases in China. 

But supply issues in China caused by increased environmental legislation means that the perceived increase in supply may not be as significant as first thought.

"We have not noticed an impact so far in Europe. We do monitor trade statistics and won’t be able to draw comparison until later in the year when new data is available," Richard Knight, Palabora Europe’s commercial director, told Industrial Minerals when questioned on the reported Chinese shutdowns.

Uganda rising

The restart of Namakera by Black Mountain Resources, which acquired the vermiculite mine from African Phosphate Pty Ltd in 2016, raised vermiculite production in Uganda last year.

Prior to African Phosphate owning the mine, it belonged to Rio Tinto.

"[The mine] is considered one of the largest and highest quality vermiculite assets globally,’" brokers Verdant Capital said of the sale.

African Phosphate was listed on the Australian Stock Exchange through a reverse takeover by Black Mountain, which was - somewhat confusingly - renamed African Phosphate following the completion of the process. 

According to the USGS, Ugandan vermiculite production increased to 20,000 tonnes in 2017 from 3,000 tonnes in 2016.

Steady on the US

After South Africa, the largest producer of vermiculite is the US. Two companies in North Carolina and Georgia mine and process the material - they collectively produced 100,000 tonnes in 2017.

Dicalite Management Group recently announced an increase in its vermiculite prices, attributing them to "plant improvements as well as citing its intention of "aggressively exploring additional lands to increase ore reserves."

It did not disclose the size of the rises, which were due to come into effect of July 1.

Dicalite also said it has been "continually adjusting the production conditions to ensure they can produce the grades to match the requirements of the market. The price increases are necessary to mitigate rising costs related to labor, utilities, packaging, and capital investments and allow for more capacity on high demand grades." 

This indicates that demand for higher grades of vermiculite is robust.

Strong demand

Indeed, according to Palabora’s Knight, demand for vermiculite has been strong so far this year, with fresh interest coming from the fire protection product market.

"As this is linked to construction, demand for vermiculite will grow in the parts of the world where there is a concentration of building projects," Knight told Industrial Minerals. "As we approach the mid-point of the year, demand and resulting sales have been very strong."

The company has raised its warehousing capacity in the port of Antwerp and will do likewise in the UK in August to accommodate this extra demand, it said.

"We continue to supply our traditional markets - construction, board and horticultural - and are always keen to work on R&D projects with existing customers or other interested parties, normally educational establishments. Past experience has shown that a new market does not always translate to a spike in volume; it will depend on the actual amount of vermiculite present in the end process or product," Knight added.