The commercial viability of any industrial mineral business is a function of mineral characteristics, in-ground reserves, distance from the mine to the markets and marketing efforts. Industrial mineral projects differ substantially from metallic minerals (e.g.; the marketing of gold consists of taking the gold bar to the bank). A new industrial mineral discovery must be studied in detail and technical, economic and marketing studies must show that it is feasible to proceed with mining. Canmin has carried out these studies and has proven beyond reasonable doubt that Namekara is a world class vermiculite deposit, that there is currently a substantial market for Namekara vermiculite and that it is feasible to bring the deposit into production. There are technical reports to substantiate every aspect of this assertion.
Physical Characteristics...
In developing an industrial minerals operation, the physical characteristics of the mineral must be acceptable. If asbestos occurs with vermiculite, a new deposit cannot be developed, no matter where it is located nor how large are the reserves. Recently, one of the world's largest vermiculite deposits in Libby, Montana, USA, was closed because of the presence of asbestos with the vermiculite. The Namekara deposit is free of asbestos.
Crystal-chemical, physical and beneficiation and size-range characteristics must be desirable. Namekara vermiculite readily falls within the range of commercial vermiculite compositions and has desirable exfoliation characteristics. The main purchasers of raw vermiculite are exfoliators. These industries desire that a given amount of raw vermiculite should expand on heating to as large a volume of exfoliated vermiculite as is possible. Namekara meets or exceeds the exfoliation characteristics of most commercial vermiculites.
Furthermore, Namekara vermiculite has unique properties that further enhance its commercial viability, It breaks into cubical particles when it is milled. This gives the exfoliated particle a uniform and commercially desirable shape. The flakes are also thin, making them cheaper to exfoliate. Namekara vermiculite has a high cation-exchange capacity, making it suitable for filtration, absorption and as a carrier. A very clean, grit-free concentrate can be readily obtained. This is desirable where vermiculite is used for moulding, brake lining and gasket applications.
Most important, there is a large proportion of coarse flakes at the Namekara site. Large flakes (10 cm to 12 cm) appear to be common below 9 meters. The average grade is 22% with areas up to 41 %. Recent sampling shows size distribution as: Large 18%, Medium 27%, Fine 16%, Superfine 5%, Micron 17%, stones (waste) 16 %. Large flakes are in short supply and command a premium price in the world insulation and horticultural applications market.
Reserves...
Are there sufficient reserves? Based on early work by the Uganda Geological Survey and Canmin's subsequent drilling, trenching, geological mapping and evaluation, the Namekara deposit has proven to contain very large quantities of commercial vermiculite. The main deposit, currently being readied for full scale production, contains on the order of 5 million tonnes of vermiculite, which reserves alone are sufficient for more than 100 years at any currently foreseeable production scenario. The vermiculite-bearing horizon consist of magnetite, vermiculite and soft phosphate. In one area the horizon averages 8m. thickness and may be between 12 and 27 m. thick. There are strong indications that the deposit is much larger than indicated by current drilling.
Mining Costs...
Can the mineral be extracted at reasonable cost? Thickness of overburden is a critical factor in open pit mine design. The Canmin feasibility study show an average overburden thickness of 6.7 m. Other variables are equipment cost, energy, operating and infrastructure costs. Hans Hansen, the mine manager has extensive first hand experience with all aspects of vermiculite mining and processing and sales.
Proximity to Markets...
The competitive advantage of Namekara applies as well to its location. There are no substantial deposits in the primary market area. Other African deposits (Palabora, Dinidza, Shawa) are at least 2500 kilometers by sea more distant from European markets.
Dinidza and Shawa in Zimbabwe are in a politically unstable country and are in danger of closing. Production costs of Palabora, the largest international supplier are expected to increase in 2002 when underground mining will commence. Two world class deposits, one in Australia, the other in Montana, USA are coming on stream, These deposits are not expected to compete in the same markets as Namekara,
Competing Products...
Some characteristics of these materials are similar to those of vermiculite and indeed there are applications where they may substitute for vermiculite.
1 . Polystyrene is cheaper but is flammable and gives off toxic gases when burned. Perlite is used mainly in agricultural applications and has an undesirable colour for horticultural applications,
2. Perlite floats and has a white colour, which gives it the appearance of cheaper styrofoam. It also costs more to exfoliate than vermiculite on an equivalent basis.
3. Expanded clay/state are used as lightweight aggregate filler, mainly in concrete. It has no insulating value.
These products and other substituting materials have long competed with vermiculite, largely in specially areas. Nevertheless, the world-wide market for vermiculite continues to expand and the price of vermiculite has increased by 3 0% in the last 1 0 years.
Finally, the major markets for coarse flake vermiculite are for insulation (heat or cold) and hydroponic use. Namekara has a price advantage because of its geographic location and a large fraction of coarse flakes that command high prices. Canmin's market evaluation is ongoing. Recently, exfoliators in Denmark, Iran, Iraq, Palestine and Oman have tested Namekara vermiculite and have placed orders for bulk samples up to 20 tonnes,
End users of industrial minerals require uniform product over a long period of time with assured and timely delivery. In some applications, the product is price sensitive and in others, quality (or mineral-property) sensitive. In the latter case, price may be a secondary consideration. Displacing existing suppliers requires that the new supplier has production capacity in place.
