Written evidence submitted by Wolf Minerals
Ltd (SIM 06)|
1.0 This submission to the Select Committee is
made by Wolf Minerals Ltd. Wolf Minerals is based in Perth, Western
Australia and listed on the Australian stock exchange. The principle
business of the Company is the development of deposits of tungsten.
The Company has assets in Australia, but the principle asset is
the Hemerdon tungsten deposit in Devon UK. This submission deals
specifically with tungsten but sets that within a broad framework
of where the UK government may need to take action on all strategic
or critical metal minerals.
1.2 The EU Commission has identified (June 2010)
tungsten as being one of the 14 most critical mineral raw materials
essential to the European economy but which are under threat of
The Hemerdon Deposit
1.3 The Hemerdon deposit has been described (British
Geological Survey, in press) as "one of the largest tungsten
resources in the western world", with a total ore tonneage
of 218.53 million tonnes containing 318,800 tonnes of tungsten.
The deposit is currently being taken forward with the prospect
of the first production of concentrate in 2013. The operation
will involve the development of the first modern open pit metal
mine in the UK, provide 200 skilled jobs and revenue of $100 million
per annum. The open pit will extend to an oval shape, circa 850
metres by 540 metres and to a depth of 200 metres. Primary plant
on site will produce concentrate for onward shipping to a processing
plant in Europe. There is currently no tungsten processing plant
in the UK. Around 4,500 tones of concentrate, equivalent to approximately
2,900 tonnes of tungsten metal, will be produced each year, sufficient
to contribute significantly to meeting UK demand.
1.4 The Hemerdon deposit has a valid commenced
planning permission which is currently being upgraded by Devon
County Council through a Modification Order, with the full support
of Wolf Minerals. As part of that process Wolf Minerals has offered
a Unilateral Undertaking to provide further amenity and environmental
works. Other regulatory permits are being pursued.
1.5 The Hemerdon deposit lies between Dartmoor
and Plymouth and outside any major environmental protection areas.
The development of this mine confirms the high prospectivity of
parts of the UK for metals and the ability of the external amenity
and environmental impacts to be managed in a manner which prevents
nuisance or harm. There has been a perception that metal mining
is neither economically viable nor environmentally acceptable
in our crowded and protected country. The actuality, as evidenced
by Hemerdon, is that the metal mineral resources in the UK can
be utilised for our economic benefit, without harm to amenity
or the environment.
1.6 There is also a perception that metal mineral
resources in the UK are fully known and that there is therefore
very limited opportunity to provide metal from within the UK.
This perception, alongside that of "peak metal" (the
concept that global reserves are fully known and will run out
in a few decades), is not correct. In most of the prospective
areas within the UK the mineral potential is unknown at economic
depths and there are indications of substantial targets.
1.7 Given that the planning and regulatory systems
in the UK are both rigorous but fair, developing our own resources
not only provides income, employment and security of supply for
industry but also complies with sustainability, makes economic
sense, and reduces the pressure on weaker regulatory regimes,
environments and societies elsewhere in the world. Developing
our own resources both enables the UK to minimise the off-shoring
of environmental and health costs to other nations, but also ensures
that the UK can negotiate trade agreements from a strong position.
1.8 Wolf Minerals is not a tungsten processor.
The processing of tungsten is a specialist and cost intensive
operation. However, the scale of annual production from Hemerdon
might provide an incentive for a processor to build a new plant
in the UK taking production from Hemerdon, supplemented by small
arisings from other deposits which could then become viable, and
scrap for recycling from the UK and Western Europe. Such a plant
would need to meet the rigorous UK regulatory requirements and
would therefore ensure that recycling is done in a cost effective,
safe and ethical manner.
2.1 Tungsten constitutes only 0.00013% of the
Earth's crust. Economic minerals containing tungsten are primarily
Wolframite and Scheelite. Tungsten has the highest melting point
(3422 degrees C) of all elements except carbon but also has excellent
high temperature mechanical properties and the lowest expansion
coefficient of all metals. With its density of 19.25 g/cm3,
tungsten is also among the heaviest metals. Tungsten has the lowest
vapour pressure of all metals, very high moduli of compression
and elasticity, very high thermal creep resistance and high thermal
and electrical conductivity.
2.2 The United States Geological Survey estimates
global tungsten reserves (proven, workable deposits and excluding
Hemerdon) at 2.8Mt. China accounts for over 60% of world reserves.
Other countries with reserves of tungsten, typically a tenth of
the reserves of China, include Canada, the CIS and the USA. CIS
reserves are probably considerably overstated. Other limited reserves
are located in Asia, with smaller deposits in Europe, Latin America
Production, Demand and Shortfall
2.3 Primary global tungsten production increased
steadily from 35,650t in 1998 to an estimated 66,000t in 2010,
of which China produced over 80%. Demand for tungsten tends to
correlate closely with economic output, as tungsten demand in
one year reflects growth in GDP from the previous year. Primary
extracted tungsten meets about 66% of total demand. The remaining
34% is supplied through recycling (see Figure 1 below).
2.4 Given the historical relationship between
tungsten demand and GDP, future tungsten consumption will closely
follow GDP growth at both the global and regional levels. For
the period 2010 to 2015, demand at the world level is estimated
(Roskill) to grow annually by 6-7%, with global demand reaching
almost 90,000t by 2015. However, existing production capacity
and production capacity from all current new projects is likely
to fall short of that demand, creating a growing shortfall.
2.5 Tungsten's very high density and its high
temperature properties are what make it unique and allow it to
be used in a wide variety of applications. There are six main
end-uses for tungsten, which in order of volume of use are:
- Cemented carbides (hardmetals).
- Alloy steels.
- Fabricated products.
- Heavy alloys.
2.6 Cemented carbides, or hardmetals, are very
hard, refractory, wear resistant materials that consist of metal
carbides held in a bonding matrix. Cemented carbides are the main
end-use application for tungsten.
2.7 Tungsten carbide exhibits extreme hardness
and high resistance to abrasion up to very high temperatures.
It is produced for widespread applications in "high-tech"
tools, wear parts and, significant to the considerations of the
Committee, mining tools, as well as for many sectors of the engineering
industry. Tungsten in cemented carbides mining tools is therefore
essential in ensuring access to all other critical or strategic
2.8 Steel is an important end-use for tungsten,
representing around 20-25% of global consumption, although there
are large variations in demand between countries. Tungsten contributes
to the increased hardness, wear resistance and higher toughness.
Alloy steels comprise three distinct markets for tungsten; tool
steels, stainless and heat-resisting steels, and alloy steels.
2.9 Significant amounts of tungsten are used
in the manufacture of tungsten metal products such as lighting
filaments and electrical and electronic contacts. Demand for tungsten
has been affected by the phasing out of the traditional light
bulb. However, tungsten is also used as filament in halogen lamps,
and in electrodes for discharge lamp systems and arc lamps. As
a result, substitution of traditional light bulbs has had less
of an effect on tungsten consumption.
2.10 Tungsten is also used in electrical and
electronic contacts because it is able to withstand arcing caused
when circuits are made and broken, and it is resistant to wear
2.11 Superalloys are nickel, cobalt or iron based
alloys with high contents of tungsten, molybdenum, tantalum and
rhenium. Their important properties include, high-temperature
strength, high creep strength at high temperature, high thermal
fatigue resistance, good oxidation resistance, excellent hot corrosion
resistance, air melting capability, air or argon remelting capability,
good welding properties and ease of casting.
2.12 Superalloys are used in aircraft engines,
marine vehicles, and stationary power units as turbine blades
and vanes, exhaust gas assemblies and burner liners.
2.13 Tungsten heavy alloys are a group of two-phase
composites with the properties of high density, high strength
and ductility. Applications include counterweights in aircraft,
rotating inertia members, x-ray and radiation shielding.
2.14 Other alloys include those alloyed with
cobalt, molybdenum and rhenium; and refractory alloys, where tungsten
forms solid solution alloys with a number of other high melting
point elements, notably niobium and tantalum.
2.15 The main tungsten chemical end uses are
as a catalyst and in other uses such as the manufacture of semiconductor
devices, in pigments, as a corrosion inhibitor, in phosphors (lasers,
fluorescent tubes, oscilloscopes, colour television tubes), in
absorbent gels, as oil additives, for fireproofing, as a fluxing
agent and for hard surfacing.
2.16 Tungsten has a number of roles at a catalyst
- DeNOx catalysts for the removal of nitrogen oxides
from combustion power plant stack gases.
- Catalysts for hydrocracking, hydrodesulphuration
and hydrodenitrification of mineral oil products, maximizing recovery
of light fuels from heavy crude and making the products more environmentally
- Other catalysts for dehydrogenation, isomerisation,
polymerization, reforming, hydration and dehydration, hydroxylation,
2.17 Due to its unique properties, there is relatively
little opportunity, or incentive, to substitute tungsten in its
major applications. Tungsten is relatively price inelastic (ie
demand for tungsten does not automatically fall when prices rise).
Tungsten-based products may face competition from products based
on other materials but increases in the tungsten price have less
of an impact.
2.18 Tungsten scrap, due to its high tungsten
content in comparison to ore, is a very valuable raw material.
Overall about a third of tungsten demand is supplied from recyclate;
this also enables the recovery of other critical and strategic
metals such as cobalt, tantalum and niobium. Increasing recycling
would reduce to a degree the need for new primary extraction of
tungsten. However, the growth in demand means that even a very
large rate of recycling could not satisfy demand.
3.0 ANSWERS TO
Q1. Is there a global shortfall in the supply
and availability of strategically important metals essential to
the production of advanced technology in the UK?
A1.1 The concept of a shortfall in strategically
important metals, such as tungsten needs to be considered not
just in relation to our existing technology industries. Perhaps
of greater significance is the future impact of a shortfall on
those developing, and awaiting development, technology industries
that we may not be able to develop because of restricted access.
A1.2 Conceptually, research into new technologies
in the UK would not be constrained by shortfalls or limited access
to tungsten. While the traditional end use market for tungsten
remains strong, new technologies (new catalysts, new alloys, new
uses in nanotechnology) based on the unique physical and chemical
properties of tungsten are under research and development. Any
limitation of access to tungsten would inhibit development of
the resulting technologies into industrial scale applications
in the UK.
A1.3 There is a developing global shortfall in
relation to proven reserves of tungsten that are economically
recoverable and "available", in the sense that there
are no restrictions on extraction or sales. This shortfall flows
from, and is exacerbated by, the dominance of China in reserves,
production and consumption. China has also restricted operations
within the country, limited mining licences, restricted exports,
adjusted export taxes and shifted export quotas to favour "added
Q2. How vulnerable is the UK to a potential
decline or restriction in the supply of strategically important
metals? What should the Government be doing to safeguard against
this and to ensure supplies are produced ethically?
A2.1 The UK is already vulnerable and affected
by restrictions in the supply of tungsten. As China industrialises
it will naturally seek to retain a greater percentage of tungsten
for its own consumption, maximise the "added value"
potential of any exports and seek sales agreements to recover
scrap back to China. At the same time; as China improves its regulation
of environmental, health and social impacts associated with some
of its mining industry; the available supply from China may shrink.
A2.2 The UK has one of the most rigorous and
fair planning and regulatory regimes in the World. This regime
fits within a local democratic process and within a stable and
trusted national political framework. Where the UK has resources
and reserves of strategic minerals, the most ethical method of
ensuring supplies of strategic minerals to our economy is to provide
them from our own resources. Such action clearly removes or reduces
any threat of external controls on supply to the UK.
A2.3 Unfortunately, policy for the identification,
management and development of the metal minerals for the UK economy
has relied for decades on the laissez-faire concept that other
nations will provide. This has left metal minerals outside central
government policy. The implications of this policy vacuum in a
time of developing metal supply vulnerability are now being understood.
What is therefore urgently required of government is strong "ownership"
within government of metal minerals (and indeed all strategic
non-energy minerals) and clear policy on the importance that the
UK government attaches to providing minerals from our own resources.
Q3. How desirable, easy and cost-effective is
it to recover and recycle metals from discarded products? How
can this be encouraged? Where recycling currently takes place,
what arrangements need to be in place to ensure it is done cost-effectively,
safely and ethically?
A3.1 As described above a substantial level of
recycling of tungsten already takes place. Currently tungsten
scrap from the UK is exported for re-processing to other countries,
including those where environmental and ethical issues are less
certain. There is the potential to recover this scrap for recycling
within the UK if a tungsten processing plant were to be constructed
within the UK, probably on the back of processing primary ore
Q4. Are there substitutes for those metals that
are in decline in technological products manufactured in the UK?
How can these substitutes be more widely applied?
A4.1 As a general rule the concept of substitution
only transfers demand from one strategic mineral to another strategic
mineral. Further the development of new technologies, such as
related to energy sources, appears to increase demand on strategic
metals creating more pressure or a new shortfall position.
A4.2 There is very limited scope for substitution
of tungsten by other metals in the primary end uses. Developing
new technologies suggest that the demand on tungsten will increase
because its valued and specific properties are non-substitutable.
Q5. What opportunities are there to work internationally
on the challenge of recovering, recycling and substituting strategically
A5.1 The primary objective should be to work
with our European partners on all aspects of securing supply of
strategically important metals. However, for many metals the challenge
cannot be restricted to recovery, recycling or substitution. Substitution
often translates supply problems from metal "A" to metal
"B" and is an illusory solution. Recovery and recycling
can assist supply, but increasing demand, often arising from the
very actions of seeking more efficient and less polluting technologies,
produces an increase in demand which recovery and recycling cannot
A5.2 The bigger challenge (bigger, because other
solutions are favored more, but less effective), is the need to
ensure that national policy addresses the need for primary supply
from our own resources.
4.1 Wolf Minerals believes that the supply of
critical and strategic metal minerals is now a significant issue
for the UK and welcomes the review. The call for evidence by the
Committee comes at an apposite time for the UK. The outcomes of
the review can help the UK grasp the significance of the problem
but also the opportunities. The outcomes can also help to put
in place both the necessary "ownership" of metal minerals
within government and the necessary supporting policies at UK
national government level.
Wolf Minerals Ltd
17 December 2010