Minerals: past and future UK trends

Future possibilities: A personal view

Before reaching its conclusions, the group also examined 3 broad future economic scenarios for minerals demand and supply until 2050:

• Green Britain: environmental protection and conservation predominate
• Britain Powering Growth: pro-development to boost GDP growth
• Insular Britain: emphasising self-sufficiency, less priority on trade

In practice, these mutually exclusive scenarios proved impracticable for generating credible predictions for specific mineral sectors. No one scenario could attract support from all the interests represented on the Forum.

However, I do not feel so constrained, on the understanding that the personal views expressed here are not necessarily those of the Forum.

Next 35 years

• expect a very limited future, with ad hoc opencasting offsetting declining imports, as coal-fired generating plant is retired to meet EU/UK carbon reduction targets. Exit from the EU would not affect this, UNLESS
• major geopolitical or energy supply shocks restrict UK access to imported gas and coal at acceptable cost. Then expect a short-term dash to opencast to meet immediate fuel shortages, possibly permitted under emergency powers (analogous to the wartime IDOs of 1943-1948), perhaps with rapid development of carbon capture and storage, AND
• extending into the medium-term, an intensive focus on coalbed methane and underground gasification, again permitted under emergency powers if required, BUT
• no return to deep mining for steam-based power generation.

• despite the previous coalition government’s hype, and emerging strong support from its successor, the prospects for large-scale shale extraction appear limited in the short-medium term:
• the PR battle with the public is already lost (fears of pollution, earthquakes, flaming taps)
• the real world local impacts are not yet fully perceived – getting large fracturing kit along narrow country lanes to perhaps hundreds of well pads, the large demand for water, and treating and moving the waste water
• local opposition to shale fracturing will be a rolling media-rich gift to anti-mineral protesters
• south of the Thames the shale resource is oil – so not even a carbon benefit
• the recently refused Cuadrilla applications in Lancashire will be a benchmark, as the stated intention to appeal is worked through
• expect gravy for lawyers – legal challenges and possibly direct action if permitted by ministers (who will surely recover any appeal from the inspector for final decision)
• approval should boost activity elsewhere, but will the new government hold its pro-shale nerve in the face of opposition, especially from its own supporters, in contradiction to its hostile stance on onshore wind?
• BUT, if major geopolitical or energy supply shocks directly affect UK access to imported gas and coal, then expect a ‘dash to frack’ (as with coal) using emergency powers if required

• expect steady demand based on progress in construction as proxy for the economy
• but also increasing problems in maintaining supply:
• shortages of sand and gravel, especially in the development hungry but aggregates-poor Greater South East, including London
• increasing focus on an ageing fleet of hard-rock quarries for local as well as strategic supply
• longer haulage from hard rock areas to markets
• a growing need for new hard rock supply – through new sites or extensions
• of 25 rock quarries producing over 3mta year. in 2008, nine now have permissions ending before 2031, five between 2031-2040, and 11 after 2040
• no new hard rock sites have been permitted for decades
• extensions more likely, especially if rail connected
• rail connections for sites not on existing lines almost impossible (cost and Network Rail bureaucracy)
• policy constraints on finding suitable sites in hard rock areas (National Parks, Areas of Outstanding Natural Beauty)
• potential result – relative cost/price increases as scarcity bites
• greater use of marine-dredged sand and gravel – higher UK prices should repatriate some of the 4-5mt landed annually on the continent
• weakness in the national Managed Aggregates Supply System even before the 2015 election. Can the Department of Communities and Local Government as a ‘non-protected department’ continue funding and coordinating strategic aggregates supply? The local process is already patchy and increasingly politicised, and effective inter-regional aggregates supply planning is now questionable
• in the longer-term, sustained UK supply shortages would force significant reliance on aggregates imports:
• bulk hard-rock landings previously limited (e.g. Glensanda to Isle of Grain)
• aggregates cannot currently compete with high-value cargo (e.g. LNG) for limited berths
• but if coal imports fall, deep-water mineral berths and stockyards could be released (e.g. at Immingham and Portbury/Bristol) and new berths developed

Other minerals

• UK supply more limited and local, but markets national/worldwide
• prospects depend on:
• quality and extent of resources
• patterns of demand and supply constraints
• energy costs in processing relative to competitors
• areas of concern
• bricks and cement – basic to construction but UK production and capacity has fallen and imports increased.
• High EU/UK energy costs threaten competitiveness
• kaolin and ball clay – vulnerable to world prices and lower-cost competitors
• salt – closely tied to activity in the energy-dependent UK chemical industries
• potash – new and expanding, but depends on world trade and sustaining the recent further mine approval in the North Yorkshire National Park against the threatened High Court Challenge
• fluorspar – small but strategic, and sourced in a highly protected landscape

Where do we go from here?

The future supply of the minerals the UK needs, whether extracted here or imported, cannot be taken for granted. In October 2014 the former BIS Select Committee endorsed the UK Minerals Forum working group’s call for a UK minerals strategy as part of a national minerals strategy. In reply the coalition government noted that the CBI Minerals Group was preparing a proposed strategy, and looked forward to discussing it in due course.

This was inevitable before an election. But the issue has not gone away. The CBI continues to work on its Minerals Strategy, and the issues identified by the Forum and this personal commentary on some of the hard-edged possibilities over the next 35 years, must be addressed. Minerals are basic to the things we use in our economy and society – 'if you can’t grow it, you have to mine it'.