Strategically important metals - Science and Technology Committee Contents


Written evidence submitted by Wolf Minerals Ltd (SIM 06)

1.0  INTRODUCTION

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 restricted availability.

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.

2.0  TUNGSTEN

Tungsten

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.

Reserves

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 and Australia.

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).

Source: ITIA

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.

Uses

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.
  • Superalloys.
  • Heavy alloys.
  • Chemicals.

Cemented Carbides

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 metals.

Alloy Steels

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.

Fabricated Products

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 and corrosion.

Superalloys

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.

Heavy Alloys

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.

Chemicals

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 including:

  • 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 friendly.
  • Other catalysts for dehydrogenation, isomerisation, polymerization, reforming, hydration and dehydration, hydroxylation, epoxidation, etc.

Tungsten Substitution

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.

Recycling

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 SPECIFIC QUESTIONS RAISED BY THE COMMITEE

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 value" products.

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 from Hemerdon.

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 important metals?

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 satisfy.

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.

4.0  CONCLUSION

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



 
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Prepared 17 May 2011