The Mineral Products Industry at a Glance 2015 Edition Contents Page

1 At a glance 1 - 2

2 An essential sector 3 - 5 2.1 Mineral production 2.2 Gross Value Added (GVA) 2.3 Productivity 3 Mineral product profiles Welcome to our 3rd edition of The 6 - 14 3.1 Aggregates (crushed rock, sand & gravel) Mineral Products Industry at a 3.2 Cementitious Glance. 3.3 Ready-mixed concrete 3.4 Precast concrete Our aim in this review is to provide 3.5 Mortar you with a valuable source of 3.6 Asphalt information on the Mineral 3.7 Lime Products industry, documenting 3.8 Dimension stone the changing patterns in the way 3.9 Industrial sand we produce and consume our minerals and the manufactured 4 Long term aggregate supply 15 products derived from them. We present a detailed analysis of 5 Taxation 16 the latest data for each product, and highlight the significant 6 Environment and sustainability 17 - 20 contribution our industry makes to 6.1 Recycling the UK economy. 6.2 Resource efficiency 6.3 Carbon emissions I very much hope that you find this 6.4 MPA National Nature Park issue interesting, and I welcome 6.5 Sustainable development reports your feedback.

Nigel Jackson About the MPA 21 Chief Executive Mineral Products Association MPA Members 22 - 24

MPA Agenda • Economic conditions that support investment • Better Government support for an essential industry • A reasonable “licence to operate” • Proportionate legislation and regulation • Recognition of progress 1 At a glance

300mt GB production of aggregates and manufactured mineral products £21bn Annual turnover £6.7bn Total gross value added of our industry £445bn Turnover of industries we supply £135bn Value of construction, our main customer 80,000 People directly employed in our industry 3.3m Jobs supported through our supply chain

GB sales of minerals and mineral products in 2014 (unless otherwise stated) Construction uses Aggregates 209mt of which: Crushed Rock 94mt Sand & Gravel - land won 44mt Sand & Gravel - marine 11mt Recycled 49mt Secondary 11mt

Cementitious (including imports) 12mt of which Cement 11mt Other cementitious materials 2mt

Ready-Mixed Concrete 16m m3

Concrete products 24mt

Asphalt 21mt

Dimension Stone* 1mt

Non-construction uses Rock* 17mt of which: Industrial Lime 1mt Agricultural Lime* 2mt

Industrial Sand* 4mt

*2013 Source: MPA, Annual Minerals Raised Inquiry. Totals may not add up due to rounding.

1 Locations of MPA member active sites/plants, 2015

Quarries, depots Plant type No. & wharves - 693 Cement quarry & works 20 Crushed rock quarry 245 Depot or wharf 116 Dimension stone quarry 31 Industrial lime quarry 6 Sand & gravel quarry 256 Silica sand quarry 19

Concrete plants - 827 Asphalt plants - 277

2 2 An essential industry

2.1 Mineral production The Mineral Products Industry is a key is essential for the UK. The majority of the Non-construction markets include iron and enabling sector of the UK economy, which industry output is used in the UK construction steel manufacture, glass making, agriculture, has a broad impact on overall economic industry – improving our housing stock, cleaning power station emissions and activity. As the largest element of the transport networks, commercial and industrial pharmaceuticals. construction supply chain, a supplier of key buildings, utilities, schools and hospitals. materials to many other industries, and the largest material flow in the UK economy, a RAILWAYS healthy domestic Mineral Products Industry ROADS SCHOOLS HOMES CTION TRU NS HOSPITALS CO SHOPS OFFICES WATER TREATMENT FACTORIES LIMESTONE WAREHOUSES IGNEOUS ROCK ENERGY GENERATION SANDSTONE SAND & GRAVEL (LAND WON) T AL SPH E SAND & GRAVEL (MARINE) S/A ON LEISURE A EGATE ST GGR SION RECYCLED AND SECONDARY DIMEN AR GLASS CEMENT/ ORT AND/M INDUSTRIAL S NON-CONST IRON AND STEEL UCTS RUCT LIME/CONCRETE PROD ION AGRICULTURE SL TE AG/READY-MIXED CONCRE FOOD MANUFACTURE WATER FILTRATION CERAMICS FOUNDRIES PAPER MANUFACTURE PHARMACEUTICALS EMISSIONS CLEANSING

Resources Products Uses

About 260 million tonnes of aggregates and other minerals are produced each year in the UK. To this, the industry adds about 80 million tonnes of manufactured mineral products such as cement and asphalt, which are mainly used in the construction sector. Overall, domestic sources supply about 85% of the cement market.

UK production of minerals, 2013. Source: MPA, BGS UK Mineral Yearbook.

All minerals Non-energy Other* 23mt Other* 7% minerals Coal 4%

Crude oil 11%

Aggregates, Natural gas 11% limestone for cement & lime, and silica sand 68%

Aggregates, limestone for cement & lime, and silica sand 235mt *Includes methane condensates, lead, gold, silver, chalk, clay & shale, slate, ball clay, barytes, chert & flint, china clay, fluorspar, gypsum, lignite, potash, salt, talc, china stone, fireclay and peat.

3 2.2 Gross Value Added (GVA) The Mineral Products Industry is defined contracting work when asphalt producers lay greater than the manufacture of chemicals as the extraction of aggregates, dimension the asphalt themselves. and chemical products or the creative stone, limestone and silica sand, as well as the industry. It had a turnover of £21bn, and production of asphalt, cement, concrete and Based on this definition, MPA estimates contributed to £445bn turnover in industries mortar. It also includes a share of road freight that the Mineral Products Industry directly downstream of the supply chain. activities, as mineral producers deliver most of contributed to the UK economy by their materials by road, as well as some road generating over £6.7bn in GVA in 2013,

GVA of the Mineral Products Industry, 2013. Source: MPA, ONS, Annual Business Survey.

Resources

Rock £1.7bn Total Sand & gravel £1.7bn Contracting & Mineral Road Freight Products

Industry

Miner Miner Asphalt contr

Asphalt contr GVA

Asphalt contracting

al Pro Pro al £6.7bn Product by Mineral Producers

manufacture

ducers £175mducers

(1)

acting by Cement £100m acting by

Road freight by

£175 m

Lime and plaster £12m £175m Mineral Producers Concrete products for construction £800m £911m Ready-mixed concrete/mortar £602m Concrete, plaster and cement products £64m Dimension stone £256m Asphalt £436m

Markets First Food products £18bn (rst use) use Leather and related products £638m £162.7bn Paper and paper products £3.9bn Chemicals and chemical products £5.9bn Basic pharmaceutical products £12.5bn Rubber and plastic products £7.9bn Other non-metallic mineral products(2) £1.9bn Basic metals £3bn Water £5.1bn Sewerage £5bn Waste £6.8bn (1) MPA believes the ONS estimate for the cement industry’s (3) GVA understates the industry’s actual GVA. 2013 GVA Construction £92.1bn for the cement industry was estimated by the MPA to be around £329m. (2) Excludes minerals covered by the MPA membership, which are included in the manufacturing stage of the supply chain. (3) Excludes asphalt contracting work carried out by Totals may not add up due to rounding mineral producers.

4 GVA of selected industries, 2013. Motor vehicles (£m) Source: MPA, ONS, Annual Computer, electronic & Business survey. optical products Scientific research * This is not an official ONS Standard Industrial Classification (SIC), but reflects MPA members’ activity. Mineral Products Industry* Manufacture of chemicals & chemical products Information service activities Printing & reproduction of recorded media Air & spacecraft

Sports activities Programming & broadcasting activities Manufacture of electrical equipment Paper & paper products

Furniture Creative, arts & entertainment activities Coke & refined petroleum products Textiles 0 2,0002000 4,000 6,000 8,000 10,000 12,000

Mining & quarrying (incl. oil 2.3 Productivity & gas) Directly employing some 80,000 people, Electricity, gas, air conditioning supply and supporting 3.3m jobs through its supply Financial & insurance chain, the Mineral Products Industry is also activities a highly productive industry: each worker Information & produced about £81,000 in 2013, 1.6 times communication more value added than the national average. Mineral Products Industry* Water supply, sewerage, waste Professional, scientific & technical activities Administration & support services National average

Manufacturing

Transport & storage Wholesale, retail, repair of vehicles Construction Public administration & defence Other service activities

Education

Productivity by industry, 2013. Agriculture, forestry & fishing (£ per worker) Source: MPA, ONS, Arts, entertainment & recreation Annual Business Survey, Labour Force Accommodation & food Survey. services Health & social work * This is not an official ONS Standard Industrial Classification (SIC), but reflects MPA members’ activity. 0 50,000 100,000 150,000 200,000 250,000

5 3 Mineral product profiles

The Mineral Products Industry, represented by the MPA, comprises aggregates, asphalt, cement, ready-mixed and precast concrete, industrial sand, lime, mortar, slag, and dimension stone.

3.1 Aggregates (crushed Total aggregate sales by region, 2013. rock, sand & gravel) Source: Annual Minerals Raised Inquiry.

Crushed Rock Sand & Gravel

17.3mt 4.9mt

2.9mt 0.3mt 4.9mt 1.9mt Within aggregates, the main element of 5.6mt 3.6mt supply is crushed rock with significant contributions from sand & gravel, recycled and secondary materials. The sand & gravel 19.4mt 4.8mt supply comprises both land-won and marine 0.0mt dredged materials. This broad breakdown 3.0mt 6.4mt 9.3mt disguises the fact that local and regional 11.7mt 1.3mt markets may be highly dependent on a 0.0mt 5.7mt particular type or source of aggregate as a 0.4mt 9.2mt consequence of the physical availability of 17.2mt 4.4mt particular resource types and/or the market demand for particular products.

Estimated total UK primary Wales 14mt aggregates sales, 2014. Source: Annual Minerals Raised Inquiry, Scotland 25mt MPA, QPA Northern Ireland.

Northern Ireland 20mt

England 111mt

6 Estimated total GB aggregates Recycled & secondary 60mt supply mix in 2014. Source: Annual Minerals Raised Inquiry, Crushed rock 94mt MPA.

*2014 estimates are based on the share of marine sand & gravel in total sand & gravel sales in 2013. Marine sand & gravel* 11mt

Land won sand & gravel* 44mt

Over the last 60 years, there have been in 2008, reflecting the significant decline in below 2007 volumes, so there remains some variations in the relative importance construction markets, but have started to significant scope for further improvements in of the different sources of aggregates, most recover since mid-2013. Total aggregates minerals products and construction markets, notably the increase in the supply of recycled sales increased 11% between 2012 and particularly outside London and in and secondary materials evident since the 2014 as construction activity picked up, non-housing markets. early 1990s. Aggregate sales have been driven by the housing sector. The aggregates depressed since the onset of the recession market remains nonetheless about 25%

Estimated total GB aggregates markets by sources of supply, 1955 - 2014 (mt) Source: Annual Minerals Raised Inquiry, MPA. 350

300

250

200

150

100

50

0 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

Crushed rock Sand & gravel (including marine) Recycled & secondary

7 Marine aggregates satisfy about 20% of Total UK marine sand & gravel landings, 2004 - 2014. (mt) the construction needs for sand & gravel in Source: The Crown Estate. England and Wales. Marine aggregates also support beach nourishment and contract fill 50 projects in the UK and are exported overseas 45 for use in construction. Total production of sand & gravel for UK construction, export, 40 beach nourishment and contract fill, shows 35 that total marine aggregates production levels have been consistently lower than the 30 total tonnage amount permitted across all 25 operators’ production licences. The difference reflects the fact that individual dredging 20 areas can offer a variety of materials, from 15 fine sand to coarse gravel, so multiple licence areas in each dredging region ensure that 10 there are enough materials for each operator 5 to supply both current and future market 0 needs, and also provide the industry with the 2004 2005 220200606 20200707 2008 20200909 2010 2011 20122012 2013 2014 flexibility to respond to any future changes in market demand that may occur. Multiple Construction aggregates - UK landings Construction aggregates - export landings licences also ensure dredging areas are near Beach & ll - UK landings Permitted tonnage to customers. The biggest use for marine dredged aggregates is the construction market in the UK. present or because existing sources have tonnes/cargo) over considerable distances become depleted, alternative sources of and delivering them to coastal towns and Aggregates are a high bulk/low cost supply have to be found. Through economies cities close to where they are needed. As an commodity, and consequently are highly of scale, marine aggregates supplies example of this, in London and the South sensitive to transport distances. Where local can play an important role in the overall East of England, one third of all the primary sources of aggregate are constrained, either portfolio of construction aggregate supply aggregates consumed in construction activity because resources are not geologically by transporting large volumes (2,000-10,000 come from marine sources.

Sand & gravel inter-regional flows, Crushed rock inter-regional flows, 2009. Source: DCLG. 2009. Source: DCLG. Exports/imports (Million tonnes) North North East Outside East England 563t 0 - 1 North and Wales North 1 - 2 West West Outside England 2 - 3 and Wales Yorkshire & 192t 3 - 4 Yorkshire & the Humber the Humber 97t 4 - 5 + 5 32t North East 322t North East Outside Wales Midlands Wales Midlands Marine dredged England and Wales East of sales W. Mids East of Outside England South W. Mids England To London Wales England South 3662t Scale as shown and Wales to Wales London (100,000 tonnes)

613t South South East Exports less than East South 100,000 tonnes South Outside West West England 487t 4985t and Wales

The underlying geology of the UK determines the local availability of mineral products which are only transported long distances when necessary. However, resources are not always distributed evenly and some inter-regional movement is necessary. The South East, for example, has its own supplies of sand and gravel but relies heavily on crushed rock brought in by rail from the East Midlands and South West and by sea from Scotland. It also requires marine dredged sand & gravel from coastal waters. The charts above show the main inter-regional crushed rock and sand & gravel movements.

8 3.2 Cementitious MPA cement usage in GB, 2014. Source: MPA.

Other(1) 5%

Products (including mortar & precast) 24%

Cement is the key component in producing ready-mixed concrete, precast concrete and mortar. Following a stable market in the early and mid-2000s, the economic recession saw Merchant 18% Ready-mixed concrete 53% cement sales drop by 34% between 2007 and 2009. Since 2012 markets have improved, but sales are still 20% lower than in 2007. (1) Includes cement that goes into soil stabilisation, special grout formulation, diaphragm wall grouts and other applications that do not fall into either RMC products or merchant.a Cement is made by crushing and heating limestone or chalk with small amounts of other natural materials, such as clay or shale, in a rotating kiln to a temperature of 1450o Celsius. This chemically combines the MPA cementitious (1) sales in GB. (mt) Source: MPA. stones into a hard substance called clinker, essentially changing calcium carbonate 17 (CaCO3) to calcium oxide (CaO) which then reacts with silica (SiO2) to form calcium 16 silicates with Ferrite and Aluminate mineral 15 formation completing the mineralogy of the clinker complex. As well as the 14 mineral content of the raw materials their moisture content is an important feature. 13 Chalk has a higher moisture content than 12 hard limestone and this tends to come with an energy penalty for the process. As the final 11 step in (CEM I) cement making the clinker is ground to a powder with about four to 10 five per cent gypsum, added to control the 9 setting time of the end-product, further blending occurs for the other cement types 8 identified below. 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Three main classifications of cement sold in (1) Includes imports, Pulverised Fuel Ash and Ground Granulated Blast Furnace Slag (GGBS). the UK are: • CEM I – made from ground cement clinker and a small percentage of gypsum to control the material’s setting time when mixed with water. • CEM II – is a cement containing between 6 and 35% fly ash, limestone or blast furnace slag, a by-product of steel production. • CEM III – is a cement containing between 36 and 95% blast furnace slag.

There are a variety of cement products designed for specific end-uses.

9 3.3 Ready-mixed concrete MPA ready-mixed concrete(1) sales in GB. (m m3) Source: MPA.

25

20

15

10

Ready-mixed concrete is used in all types 5 of construction and is therefore a useful indicator of activity from housing to high-rise and infrastructure. It is readily available in 0 all GB regions where the average delivery 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 distance is 8 miles. Demand for ready-mixed (1) concrete is closely aligned with construction Includes ready-mixed concrete produced from fixed and site plants. activity, so there continues to be nearly 3 times more supplied in London and the South East than in most other GB regions.

MPA ready-mixed concrete (1) sales by region, 2014. Source: MPA.

Estimated total UK ready-mixed concrete (1) sales, 2014. Source: MPA, QPA Northern Ireland.

Wales 1.0m m3 Scotland 1.7m m3

Northern Ireland 2.5m m3

1.3m m3

0.6m m3

1.5m m3 1.2m m3 England 18.9m m3

(1) GB Estimates are based on the assumption that MPA 3 1.2m m sales represent 75% of the total GB market. Includes fixed & site plants. 1.3m m3 1.5m m3 0.7m m3 3.3m m3 2.4m m3 1.2m m3

(1) Includes ready-mixed concrete produced from fixed and site plants.

10 3.4 Precast concrete UK concrete products trade balance (1). (£m current prices) Source: BIS Building Materials and Components.

80

60

40

20

0

-20

Precast concrete is an essential ingredient of -40 many buildings and civil engineering projects. For instance, 80% of all new roofs are made -60 from concrete tiles, whilst concrete and -80 masonry provide strength, thermal mass and fire protection to 85% of new homes built -100 over the last 30 years. The market is mainly -120 supplied from domestic sources but the 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 chart points to the vulnerability of this sector to international competition, as the UK has (1) Includes concrete blocks and bricks, roof tiles, other tiles & paving, pipes & pre-fabricated concrete products. moved from a trade surplus to a trade deficit over the last 10 years. The UK has been a net importer of concrete products since 2009.

3.5 Mortar Mortar plays an essential role in the building and construction industries, providing the ‘glue’ that bonds bricks, blocks and stones into masonry. About 70% of mortars used in the UK come from factory-produced sources, as opposed to being mixed on site, reflecting the ever- increasing demands for quality building products in the development of our built environment. With the financial crisis and the collapse in housing construction, mortar sales in Great Britain fell by 42% between 2007 and 2009. They have since started to recover, but the relatively mild performance in 2014 (+2%) highlights that the methodology used to estimate total GB sales using brick and block deliveries underestimates the market due to the significant rise in brick and block imports.

Representing over 75% of the total GB market, the trend in sales from the Mortar Industry Association (MIA) provides a more realistic view of the market performance, with sales growth of 19% in 2014, in line with housing construction.

GB mortar sales, 2014. (mt) Source: 4.5 MPA, MIA, BIS Building Materials and 4.0 Components.

Estimated GB mortar sales(1) 3.5

Mortar Industry Association sales 3.0

(1) Computed by MPA using data on deliveries of bricks and concrete building blocks in GB. Based on the assumption 2.5 that 1 tonne of mortar is used for every 1,000 bricks or 600 blocks. 2.0

1.5

1.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

11 3.6 Asphalt MPA asphalt sales in GB. (mt) Source: MPA.

29

27

25

23

21 Roads are the economic and social arteries of the nation and we depend upon asphalt for 19 road maintenance and construction. Asphalt is produced locally, and serves both the local and national networks. Following the 17 recession, these markets declined very steeply in 2012 but markets have picked up since the 15 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 end of 2013. Asphalt sales rose 13% between 2012 and 2014 but remain well below levels seen prior to the recession.

MPA asphalt sales by region, 2014. Source: MPA.

Estimated total UK asphalt (1) sales, 2014. Source: MPA, QPA Northern Ireland.

Wales 1.7mt Scotland 2.1mt

Northern Ireland 2.5mt 1.9mt

0.7mt 2.1mt 2.0mt England 19.1mt

(1) Estimates for England, Scotland and Wales are based on 2.6mt the assumption that MPA sales represent 90% of the total GB market for Asphalt. 2.0mt 2.3mt 1.5mt 1.8mt 1.6mt 2.0mt

12 3.7 Lime 3.7.1 Industrial lime Lime sales by end-usage in GB. (mt) Source: BLA.

1.8

1.6

1.4

1.2

1.0

Many diverse industries such as steel, 0.8 chemicals, glass and construction rely heavily on industrial lime. This unique and versatile 0.6 mineral is also used in the production of sugar, the treatment of contaminated land, the desulphurisation of flue gases from 0.4 power stations and the purification of water for human consumption. The sector makes a 0.2 positive contribution to the UK trade balance, with around 20% of industrial lime being exported. 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014

Iron and steel Environmental protection Chemicals and other

Agriculture Factory produced building units

Export Other building applications

3.7.2 Agricultural lime Total sales of agricultural lime in GB. (mt) Source: Annual Minerals Raised Inquiry.

2.2

2.0

1.8

Quarried agricultural lime remains UK agriculture’s principal tool in moderating 1.6 the effects of climate change, excess soil acidity, and supplying essential calcium plant nutrient. Lime plays a key role in protecting 1.4 nature’s greatest asset - the soil; maintaining a healthy and productive environment essential to meeting the challenges of future food 1.2 security. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

It is estimated that twice as much agricultural lime needs to be applied to UK farmland to prevent soil becoming too acidic.

13 3.8 Dimension stone Total sales of dimension stone in GB. (mt) Source: Annual Minerals Raised Inquiry.

1.2

1.0

0.8

0.6 The UK industry for dimension stone has declined since the 19th century in the face of overseas competition, but still plays an 0.4 important role in ensuring that the unique local characteristics of natural stone-built areas of the UK can be maintained. In 2013, 0.2 there was just under 1 million tonnes of dimension stone produced in GB, mainly from sandstone and limestone. 0.0 2004 2008 2013

Sandstone Igneous rock Limestone(1)

(1) Includes dolomite.

3.9 Industrial sand Total sales of industrial sand in GB. (mt) Source: Annual Minerals Raised Inquiry.

6.0

5.4

4.8

4.2

As well as being used for glass making, paints, plastic and computer chips, industrial sand 3.6 is also employed in making foundry moulds for applications such as car engines. After 3.0 declining significantly between 2006 and 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2009, the production of industrial sand in GB stabilised at about 4 million tonnes per year.

14 4 Long term aggregate supply

Subject to the geological conditions, a key factor influencing the supply of aggregates is the operation of the mineral planning system. In England, the managed aggregates supply system is designed to ensure a steady and adequate supply of aggregates. The chart below indicates permitted reserves of aggregates since the early 1990s.

Estimated permitted minerals reserves in England. (mt) Source: BGS, MPA.

6,000

5,000

4,000

3,000

2,000

1,000

0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Sand & gravel Crushed rock

However, replenishment rates are more GB replenisment rates(1) for sand & gravel and crushed rock, 10-year meaningful statistics, as they provide rolling averages. Source: MPA. information on the long term availability of supply. 1.2

If the amount of aggregates receiving Parity = 1 (100%) 1.0 planning permission equals the level of production, the replenishment rate is 100%. The chart opposite indicates that whilst 0.8 replenishment rates for crushed rock have been close to parity in recent years, sand and gravel is being replaced at a much 0.6 slower pace: for every 100 tonnes of sand and gravel used, only 47 tonnes is being 0.4 replaced through new planning permissions, which has resulted in significant decline in permitted reserves of sand and gravel over 0.2 the last 15 years. The implication of long term replenishment rates below 100% is that shortages of supply may become apparent. 0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Evidence from Local Aggregates Assessments and Local Plan formulation suggests that this is beginning to appear in parts of Yorkshire, Sand & gravel Crushed rock the South West, the South East, the North (1) If the amount of aggregates receiving planning permission equals the level of production, the replenishment rate West, and the West Midlands. would be 1.

15 5 Taxation

The cumulative burden of environmental the Carbon Reduction Commitment Energy the Cement industry, but this proportion and planning related taxation and regulation Efficiency Scheme (CRC), all of which are could increase to 46% by 2020 (from £27 on mineral products cuts deeply into the focused on carbon reduction. In addition, the million to over £195 million per annum). The industry’s GVA, and the pressures are also set industry has to manage the indirect impact of annual cost of the aggregates levy alone is to increase in the coming years. measures and associated costs related to the equivalent to 17% of industry GVA in 2013. costs of generating and supplying the energy The industry is in the scope of the European used by the industry. Union Emissions Trading Scheme (EUETS), Climate Change Agreements (CCA) linked Climate change and energy measures in to the UK Climate Change Levy (CCL) and 2014 were equivalent to 8% of the GVA of

GVA(1) and estimated cost of energy and climate change measures for the cement industry. (£m) Source: MPA.

Costs 2020 GVA

Costs 2014 GVA

050 100 150 200 250 300 350 400 450

(1) MPA believes the ONS estimate for the cement industry’s GVA understates the industry’s actual GVA. 2011 GVA for the cement industry was estimated by the MPA to be around £323m. GVA for 2012/2014 follows cementitious sales trends. For 2014-17, GVA is assumed to rise in line with MPA sales forecast. Beyond 2017, GVA is assumed to grow in line with GDP trend growth of 2.3%.

Aggregate Levy compared to GVA 1800 in the aggregates industry, 2013. 1600 (£m) Source: HMRC Aggregate Levy Bulletin, ONS Annual Business Surveys. 1400

(1) Quarrying of stone, sand & clay (SIC 08.1). 1200

1000

800

600

400

200

0 Gross Value Added (1) Levy declared on returns

16 6 Environment and sustainability

6.1 Recycling Recycled and secondary materials now Share of recycled and secondary materials in total GB aggregate sales. account for 29% of the GB aggregates market. Source: Annual Minerals Raised Inquiry, MPA. Recycled materials include construction and demolition waste, asphalt planings and used 35% railway ballast. Secondary materials include iron and steel slag, waste glass, incinerator 30% and furnace bottom ash and waste from 25% extractive activities such as china clay and slate. 20%

15%

10%

5%

0% 1986 1990 1994 1998 2002 2006 2010 2014* *Assuming 2013/14 MPA sales volumes growth rates.

The share of recycled and secondary materials Share of recycled(1) and secondary materials in total aggregate sales in in the total GB aggregates market is also 2013. Source: UEPG, Annual Minerals Raised Inquiry, MPA. the highest share in Europe; the European average stands at about 10%. 35%

30%

25%

20%

15%

10%

5%

0% y e g k y e GB kia land anc land Italy wa ustria inlandSpain tugal Fr Po A Nor F Greec BelgiumGerman embourDenmar Bulgaria Slova Por Netherlands Switzer Lux (1) Includes manufactured, recycled (fixed & mobile) and aggregates re-used on site.

Sales of Portland cement are supplemented GGBS & fly ash in the MPA cementitious market, 2014. by the use of other cementitious materials including ground granulated blast furnace Fly ash & GGBS slag (GGBS) and fly ash. These cementitious 15% materials are supplied either as a component of blended cements or directly to concrete manufacturing facilities. 85%

Cement sales (including imports)

17 6.2 Resource efficiency

UK sales of both aggregates and cement Total aggregates(1) production per capita in Europe, 2013. per capita are relatively low and amongst Source: UEPG, MPA. the lowest in comparison with the rest of Europe. The charts below indicate that the use of aggregates and cement per capita is about 32% and 48% respectively below the >15t European average. 10t - 15t

6t - 10t

4t - 6t

2t - 4t

<2t

(1) Includes primary, manufactured, recycled (fixed & mobile) and aggregates re-used on site.

Total aggregates(1) production per capita, Cement consumption per capita, 2013. 2013. (tonne/capita) Source: UEPG, MPA. (kg/capita) Source: ERMCO, EUROSTAT.

EU (28) EU (16)

Germany Italy

France Germany

UK France

Italy Spain

Spain UK

012345678 050 100 150 200 250 300 350 400

(1) includes primary, manufactured, recycled (fixed & mobile) and aggregates re-used on site.

18 6.3 Carbon emissions

Cement manufacture is, by its nature, (1) Carbon dioxide in cement production. (Kg of CO2/tonne of Pce ) energy and carbon dioxide intensive. The Source: MPA. UK industry has been a world leader in its carbon reduction drive to date, reducing 1,000

CO2 emissions by 55% between 1990 and 2013. This was achieved through heavy 950 investment and a progressive move toward 1998 Baseline using alternative waste-derived fuels. In 900 2013, the sector published a greenhouse gas strategy which set out how emissions 850 could be reduced by as much as 81% by 2050 compared to 1990. 800

(1) Portland Cement Equivalent (PCe) is a normalising 750 factor related to cement output often used by the cement industry, which enables a comparison of impacts such as environmental between sites whilst taking into 700 consideration differing production methods, cement product types and movement of intermediate products. Includes non-kiln sites production from 2010 onward. 650

600 1998 2005 2006 2007 2008 2009 2010 2011 2012 2013

6.4 MPA National Nature Park

The minerals industry is uniquely placed to contribute to delivery of national and local biodiversity targets. At least 5,200 hectares of priority habitats has been created through the restoration of old quarries, the equivalent of at least five Richmond Parks. Also, a further 5,600 hectares of priority habitat is currently planned through the restoration of sites.

Opposite is a map of some of the main restoration sites, a nationwide network of quarries that have been restored for wildlife and which are accessible to the public. This initial map includes 50 sites around the country totalling 4,000 hectares, with a range of facilities including nature trails, viewing hides and visitor centres.

Collectively they form MPA’s National Nature Park.

You can view the map in more detail at: www.mineralproducts.org/nature_map.htm

19 6.5 Sustainable Development Reports

Links to Sustainable Development Reports http://www.mineralproducts.org/sustainability/reports.html

Mineral Products Association Engagement and delivery MPA Cement . . . a continuing commitment Sustainable Development Summary Sustainable Development Report 2014 Report 2013 building a sustainable UK cement industry

1 mpa cement Mineral Products Association

British Lime Association Strength from the depths Eighth sustainable development report for the Sustainable Development British marine aggregate industry Report 2013 November 2014

bla british lime association Mineral Products Association bmapa british marine aggregate producers association Mineral Products Association

20 About the MPA

Annually, the industry Aim of the MPA MPA members are: MPA members will be recognised and • Committed to the principles of sustainable supplies £21bn worth of valued for supplying essential materials development; for a sustainable future in a manner that materials and services • Committed to achieving TARGET ZERO & is economically viable and socially and ZERO HARM and raising skill levels; to the Economy. environmentally responsible. • Committed to protecting and enhancing Industry production UK Biodiversity; Role of the MPA represents the largest • Committed to reducing carbon and MPA is the voice of the mineral products other industrial emissions and maximising materials flow in the UK, sector and represents and promotes its recycling of materials and high quality members in order to: restoration of land and improving resource and is also one of the efficiency; • Secure and maintain the “licence to largest manufacturing operate” for the safe, sustainable • Committed to the sustainable use of their and responsible supply of essential mineral products by end users; sectors. products from the UK; • Socially and environmentally responsible • Raise awareness of the industry, its suppliers of essential materials; activities and contribution to the economy • Valuable and active members of their and to protect and grow its markets; communities particularly in rural areas; • Influence the development of technical • Able to provide a range of career and environmental standards and codes of opportunities and career development and practice; respond to skills shortages; • Encourage innovation and the delivery of • Innovative and share good and best sustainable and responsible environmental practice particularly in health and safety product and market solutions; and sustainable development. • Advocate and influence the design and product choice of members’ products;

• Maintain existing and develop new markets which are stable, ‘level’ and certain and minimise cumulative impacts;

• Educate stakeholders to ‘Make the link’ between the sources of mineral products and their use.

21 MPA members Full, associate and affiliate members as of January 2015

The Mineral Products Association (MPA) is Forest Pennant Volker Dredging Ltd the trade association for the aggregates, Francis Flower W Clifford Watts Ltd asphalt, cement, concrete, dimension stone, Gallagher Group ltd Wildmoor Quarry Products GD Harries Woodkirk Stone lime, mortar and silica sand industries. With GRS Roadstone Limited the recent addition of British Precast and the Grundon Sand & Gravel Ltd British Association of Reinforcement (BAR), it H Sivyer (Transport) Ltd British Precast has a growing membership of 480 companies H.H. & D.E. Drew Product groups and is the sectoral voice for mineral products. H Tuckwell & Sons Ltd Aircrete Products Association MPA membership is made up of the vast Hanson UK Architectural Cladding Association majority of independent SME quarrying Harleyford Aggregates Ltd Box Culvert Association Harsco Metals Group Limited companies throughout the UK, as well as Concrete Block Association Hills Quarry Products Limited the nine major international and global Concrete Pipeline Systems Association Holderness Aggregates Ltd Concrete Sleeper Manufacturers Association companies. It covers 100% of GB cement Hope Construction Materials Concrete Tile Manufacturers Association production, 90% of aggregates production, Hugh King & Co Construction Packed Products Association 95% of asphalt and over 70% of ready-mixed Hutton Stone Co Ltd Interlay concrete and precast concrete production. J & J Franks Ltd Modern Masonry Alliance J Clubb Ltd In 2013, the industry supplied £21bn worth Precast Flooring Federation J.J. Prior Limited Structural Precast Association of materials and services to the construction J Wainwright & Co Ltd and other industries, with a total turnover of John Carr (Liverpool) Ltd £445bn. Industry production represents the John William Sutherland Ltd British Precast largest materials flow in the UK economy JPE Holdings Ltd Full members and is also one of the largest manufacturing Kendall Brothers (Portsmouth) Ltd ABM Precast Solutions Limited sectors. For more information visit: Kerneos Ltd Acheson & Glover Precast Limited Lafarge Tarmac ACP (Concrete) Limited www.mineralproducts.org Lhoist UK Ltd Aggregate Industries (UK) Limited Lovell Stone Group Amber Precast Limited Mansfield Sand Co Ltd Banagher Precast Concrete Ltd MPA Full Members Marchington Stone Barcon Systems Limited Marshalls plc Bell & Webster Concrete Limited England & Wales Midland Quarry Products Besblock Limited Aggregate Industries UK Ltd Moorhouse Sand & Gravel Pits Bison Manufacturing Limited Air Products PLC Moreton C Cullimore (Gravels) Ltd Breedon Aggregates Scotland Ltd Albion Stone plc Morris & Perry (Gurney Slade) Ltd Brett Landscaping & Building Products Allen Newport Ltd Myers Group Broome Bros (Doncaster) Limited Ballast Phoenix Northumberland Quarries Buchan Concrete Solutions Limited Bathgate Silica Sand Ltd O’Donovan Waste Disposal Ltd CEMEX UK Bestco Surfacing Ltd Portland Stone Firms Ltd Charcon Construction Solutions Black Mountain / De Lank Quarry Ltd R Collard Ltd Collier & Henry Concrete (Floors) Limited Borough Green Sandpits Ltd R.J.D. Ltd Cornish Concrete Products Limited Breedon Aggregates Remix Dry Mortars Ltd CPM Group Limited Brett Group Rotherham Sand & Gravel Co Ltd Creagh Concrete Products Limited Britannia Aggregates Ltd S Walsh and Sons Cross Concrete Flooring Ltd Bromfield Sand & Gravel Co Ltd Salop Sand & Gravel Supply Co Ltd Decomo UK Limited Burlington Slate Ltd Sea Aggregates Ltd Delta Bloc UK Limited Cardigan Sand & Gravel Co Ltd SRC Aggregates E & JW Glendinning Limited CEMEX UK Sibelco UK Ebor Concretes Limited Chambers Runfold Singleton Birch Ltd Edenhall Concrete Limited Colas Ltd Smith & Sons (Bletchington) Ltd Elite Precast Concrete Limited Cornish Lime Company Ltd Springfield Farm Ltd Evans Concrete Products Limited Cormac Solutions Ltd SSG Quarries F P McCann Limited CPI Mortars Ltd The Bath Stone Group Forticrete Limited Day Group Ltd Tradstocks Natural Stone H+H UK Limited Deme Building Materials Ltd TJ Transport Ltd Hanson Floors & Precast UK Dunhouse Quarry Co Trefigin Quarries Ltd Hillhouse Quarry Group Ltd Erith Group Limited Tudor Griffiths Group Interfuse Limited Eurovia Roadstone United Asphalt Ltd Laird Bros (forfar) Ltd F M Conway Ltd United Recycled Aggregates Limited Lignacite (Brandon) Ltd

22 Litecast Limited French Jones Cathay Industries Ltd Longley Concrete Ltd Gerald Eve LLP Cement and Concrete Association of New Lovie Quarry & Concrete Products LLP Golder Associates (UK) Ltd Zealand Marshalls plc Grace Construction Products Ltd Christeyns UK Ltd Milton Precast GVA Chryso UK Ltd Mona Precast (Anglesey) Limited Hafren Water Note: membership via Grandfather Rights Naylor Concrete Products Limited Hewith Robins International Concrete Manufacturers Association - South Patersons of Greenoakhill Ltd Howes Percival LLP Africa Plasmor Limited HSL Consulting Concrete Technology Ltd Premium Concrete Products Ltd Huntsman Pigments Conspare Ltd Quinn Building Products Limited J C Bamford Excavators Ltd Construction Fixing Systems Ltd Robeslee Concrete Company limited Jenco Consulting Ltd Coote Engineering Ltd S Morris Limited Kingsbridge Risk Solutions Ltd Construx BUBA Sellite Blocks Limited KJ Services Limited CPI Worldwide Skene Concrete Products Knights Solicitors LLP CSM Thermomass Stanton Bonna Concrete Limited Land & Mineral Management Ltd David Ball Group Plc Stanton Bonna additional NR Lanxess Ltd Doncaster College Sterling Services Limited Marubeni-Komatsu Ltd Dundee College Stocks Blocks Limited Matthews & Son Chartered Surveyors LLP Ecoratio Europe B.V Stowell Concrete Limited Mentor Training Solutions Limited EKC Systems Ltd Tarmac Building Products Ltd Mills & Reeve Elematic OY AB Techrete Limited Mineral Products Qualifications Council Elkem Materials Ltd Thakeham Tiles Limited Mineral Services Ltd Erico Europe B.V. Thomas Armstrong (Concrete Blocks) MJCA Euro Accessories Limited Thorp Precast Limited Neil Beningfield & Associates Ltd Fosroc Limited Townscape Products Limited ORICA Europe Ltd Grace Construction Products Ltd TT Concrete Products Limited PDE Consulting Ltd Graceland Fixing Ltd WDL (Concrete Products) Ltd Pinsent Masons LLP GRS (Bagging) Ltd William Rainford (Holdings) Limited Procter Johnson Halfen Limited PQ Silicas UK Limited Hanson Cement Limited Rema Tip Top Industry UK Ltd Havsco Ltd MPA Associate Members Response Engineering Hendriks Precon B.V England & Wales H &T Labour and Vacuumation Services Ltd. Hickman & Love (Tipton) Ltd Addax International Ltd Rettenmaier UK Ltd Hope Construction Materials Alliance Planning Richard Fox & Associates Ltd Howard Taylor Consultants Amec Foster Wheeler Environment & Savills (L&P) Ltd Hydronix Ltd Infrastructure UK Limited Schenk Processes UK Ltd Huntsman Pigments Ammann Equipment Ltd SERAC UK Inter-Minerals Archaeological Research Services Ltd Siemens J & P Building Systems Limited Babcock International Group Silkstone Environmental Ltd Kingston University BASF Construction Chemicals (UK) Limited SLR Consulting Ltd KVM Industrimaskiner A/S BDS Marketing Research Ltd Smiths Gore Lafarge Tarmac Trading Limited Benninghoven UK Ltd Speciality Minerals Lafarge Tarmac Cement & Lime Limited Berrymans Lace Mawer Spillard Safety Systems Ltd Lanxess Ltd Bidwells Stephens Scown Leading Edge Management Birketts Solicitors Stocksigns Leeds Oil + Grease Co. Ltd (LOGCO) Burges Salmon LLP Tata Steel Longrake Spar Co Ltd Brigade Electronics Plc The Crown Estate Loughborough University British Sugar plc Thrings LLP Lytag Ltd Carter Jonas LLP TLT Solicitors Martek Industries Ltd Cathay Pigments (UK) Ltd UK Quality Ash Association Megasteel Ltd Chaselet Ltd Walters Group Mentor Training Solutions Limited Christeyns UK Ltd Whitwick Engineering Miers Construction Products Ltd Command Alkon Ltd Wirtgen Limited Moulded Foams Ltd D B Schenker National Cement Distribution David Ball Group National Precast Concrete Association Australia Davies Planning Ltd British Precast National Precast Concrete Association USA DLA Piper UK LLP Associate members Net-Temps Ltd Dustcan Adomast Manufacturing Ltd Norsekem Ltd EA Ltd Advantage Precast Parex Ltd EIS Property BASF Construction Chemicals Patterns and Moulds Ltd Envireau Water BDS Marketing Research Ltd PCE Limited EPC-UK Besser Company Peikko UK Ltd ESI Limited Bianchi Casseforme SRL Precast Concrete Structures Limited Finning (UK) Ltd BRE Precast Construction Technology Ltd Firstplan Canadian Precast Institute Precast New Zealand Incorporated Foot Anstey LLP Carbon8 Aggregates Ltd Precast/Prestressed Concrete Institute Freeths LLP Caswick Ltd Pressvess

23 Probst Handling Equipment Curtis Concrete Solutions Ltd TBF Thompson (Affiliates) Progress Group Douglas Acheson Ulster Industrial Explosives Limited (Associate) Prothious Engineering Services Pvt. Ltd Ernecast Ltd William Orbinson QC (Affiliates) PUK Ltd F K Lowry Piling Ltd Atlantic Bitumen (Associate) Resiblock Ltd F P McCann Limited Tennants Bitumen (Associate) RLH Construction Ltd G & G Ross RFA-Tech Ltd George Crawford & Son British Association of Reinforcement (BAR) Rocan Products Ltd Gibson Bros. ArcelorMittal Kent Wire Ltd Shuttlelift Harold Graham BRC Limited SIKA Ltd Hughes Precast Products Ltd BRC Manufacturing Ltd Simply Precast Accessories Ltd Irish Salt Mining & Exploration Co Ltd Celsa Steel UK Limited Spiroll Precast Services Ltd Irwins Quality Aggregates Cannon Steels Limited Strusoft UK James Boyd & Sons (Carnmoney) Limited Collins Reinforcement Limited The Heartland Group John McQuillan (Contracts) Limited Express Reinforcements Ltd Tekla (UK) Ltd Jordan Concrete HY-TEN Ltd T Grounds Associates Kilwaughter Chemical Co Ltd LM Products Limited Trelleborg Forsheda Pipe Seals Lafarge Tarmac Lemon Groundwork Suppliers Limited UK Certification authority for Reinforcing Steels Lagan Cement Company Outokumpu Stainless (Cares) Lagan Cement Products Ltd ROM Litd University College London Lagan Construction Materials Ltd RSJ Steels (Lincoln) Ltd University of Brighton Loughran Rock Industries Stainless UK Limited University of Dundee Macrete Ireland University of Nottingham Matthew Robinson & Son Concrete Products Eurobitume UK University of Sheffield McGarrity Brothers Ltd Nynas Bitumen University of Surrey Miskelly Brothers Shell Bitumen University of Teesside MW Johnston & Son Total Bitumen University of the West of England Norman Emerson Group Limited University of the West of Scotland Northstone Materials Waldeck Engineering Limited Omya Uk Ltd Yara UK Ltd P Clarke & Sons Limited P Keenan Patrick Bradley Limited MPA Peter Fitzpatrick Leod Quarries Affiliate members Premier Cement Limited Quinn Building Products Ltd MPA Scotland R J Mitten & Sons (NB: Excludes Major companies who are all Riddles Bros Limited members.) Riverside Sand and Gravel Ltd Angle Park Sand & Gravel Co Robinson Quarry Masters Limited Bonnar Sand & Gravel Co Ltd RTU Ltd Breedon Aggregates Scotland Ltd Stanley Bell & Sons Ltd Sand & Gravel Hillhouse Quarry Company Ltd T H Moore (Contracts) Ltd Laird Aggregates Ltd Lafarge Tarmac Leiths (Scotland) Ltd Tobermore Concrete McFadyens Contractors Tracey Concrete Limited O-I Manufacturing UK Ltd Tullyraine Quarries Limited Patersons of Greenoakhill Ltd W & J Chambers Limited Pat Munro (Alness) Ltd W J & H Crozier Tillicoultry Quarries Ltd Whitemountain Quarries Limited Tinto Sand & Gravel Ltd WJ McCormick & Sons Ltd The Geddes Group W H Malcolm Northern Ireland Associates & Affiliates Carson McDowell Solicitors (Affiliates) QPA Northern Ireland (QPANI) CDE Global Ltd ( Affiliates) Acheson & Glover Ltd Cleavor Fulton Rankin Solicitors (Affiliates) Alpha Quarry Products Ltd ConveyorTek (Affiliates) Armagh City Quarries Dennison Commercials Ltd (Affiliates) B McCaffrey & Sons Ltd Finning (Affiliates) Barrack Hill Quarries Golder Associates (UK) Ltd (Affiliates) Boville McMullan Ltd Jabez Safety Solutions (Affiliates) Campbell Contracts Ltd McLorinan Consulting Ltd (Affiliates) Northstone Products Ltd Orica Blast & Quarry Surveys (Affiliates) CES Quarry Products Ltd RHM Commercial LLP (Affiliates) Colinwell Concrete Ltd RHM Commercial LLP (Affiliates) Collen Brothers (Quarries) Limited Six-West Ltd (Affiliates) Conexpo (NI) Limited SLR Consulting (Ireland) Ltd (Affiliates) Core Aggregates Smiley Monroe (Affiliates) Creagh Concrete Products Limited Switch Business Systems Limited (Affiliates)

24 For further information:

MPA’s constituent bodies and affiliated organisations: Mineral Products - Mineral Products Association: www.mineralproducts.org Mineral Products - Northern Ireland, QPANI: www.qpani.org Cement - MPA Cement: http://cement.mineralproducts.org Precast Concrete - British Precast: www.britishprecast.org Ready Mixed Concrete – BRMCA: www.brmca.org Lime - British Lime Association: www.britishlime.org Marine Aggregates - BMAPA: www.bmapa.org Mortar - Mortar Industry Association: www.mortar.org.uk Agricultural Lime - ALA: www.aglime.org Industrial Sand – SAMSA: www.samsa.org.uk The Concrete Centre: www.concretecentre.com Reinforcing Steel - British Association of Reinforcement: www.uk-bar.org Asphalt Industry Alliance, in partnership with Eurobitume UK: www.asphaltindustryalliance.com

Other official websites used as data sources: Minerals UK, British Geological Survey: www.bgs.ac.uk/mineralsuk/mineralsYou/home.html Annual minerals raised inquiry survey, DCLG: www.gov.uk/government/collections/minerals Office for National Statistics, ONS: www.ons.gov.uk/ons/index.html Business, Innovation and Skills, BIS: www.gov.uk/government/collections/building-materials-and-components-monthly-statistics-2012 HM Revenues & Custom: www.uktradeinfo.com/Statistics/Pages/TaxAndDutybulletins.aspx European Aggregates Association: www.uepg.eu European Ready-Mixed Concrete Organisation: www.ermco.eu/documents/home.xml?lang=en Eurostat: http://ec.europa.eu/eurostat/data/database UK Minerals Forum: www.ukmineralsforum.org.uk

Brushing-in sand Filtration sand

Quartz gravel Limestone Cement Agricultural lime

Back cover Front cover Mineral Products Association The Mineral Products Association is the trade Gillingham House association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and silica sand 38 - 44 Gillingham Street industries. London SW1V 1HU Tel +44 (0)20 7963 8000 For information about the data in this publication, Fax +44 (0)20 7963 8001 please contact: Aurelie Delannoy, Economist: Email [email protected] [email protected] www.mineralproducts.org Jerry McLaughlin, Chief Economist & Director of Public Affairs: © Mineral Products Association 2015 [email protected]