The UK’s long-dormant lead industry could be on the verge of a revival thanks to a new project being undertaken by London-listed exploration and development firm Minco (LSE:MIO).
In November 2012, the company started a US$1-million, 4,000-meter exploration program in the North Pennine Orefield, a 40-by-35-kilometer area in the Northern English counties of Cumbria, Northumberland and Durham. The region hosts the largest area of zinc-lead mineralization in the country.
Minco also holds interests in projects in Ireland, Canada and Mexico. In 2011, it sold its 23.6-percent interest in the Pallas Green lead-zinc deposit in Ireland to its joint venture partner, Xstrata (LSE:XTA), for $19.4 million.
In the UK, Minco aims to use approaches it developed in Ireland to discover and outline zinc-lead deposits in the North Pennine Orefield. “We have been developing the geological theory behind this new exploration effort for several years,” said Minco’s founding director and CEO, Terence McKillen, in a November 2 press release.
A short history of British lead mining
Lead mining has a long history in the UK, with small-scale operations dating back to Roman times. However, it was the Industrial Revolution, and the economic expansion that came with it, that turned lead mining into a thriving business. From 1750 to 1850, the country was the leading producer of the metal, which was in high demand for roofing, piping and other building materials, as well as paint bases and lead shot.
During that time, the North Pennine field was the heartland of the industry in the UK. Extraction methods were crude by today’s standards, mainly consisting of bell pits or a technique called hushing, which involves damming streams and then releasing them into man-made trenches to remove peat and soil from areas where lead was thought to exist. Later, miners dug shafts into hillsides and hauled the ore out using horses.
However, lower-cost competition from new discoveries outside the country, including in the US, Spain and Germany, eventually led to the decline of lead mining in Britain. By the dawn of the 20th century, few operating mines remained, though some held on until the 1930s, helped by increased demand during World War I.
New drilling program should yield results soon
“The historically mined lead in the [North Pennines] was all near the surface,” said McKillen in a January 8 phone interview. “That’s mainly because the old-timers weren’t able to go to greater depths. We’re going below the Great Limestone formation, or about 400 meters deeper than the previous mines. The theory is that if there was mineralization above the Great Limestone, then there is a strong possibility of mineralization below it as well.”
McKillen said that Minco should know fairly soon whether that assumption holds true; he expects the first assay results from the current program toward the end of the first quarter of 2013, with the second phase of drilling running into the summer. But expectations are high.
“We think the potential is there for a world-class deposit,” said McKillen. “Of course, we would have to delineate it, but there would be lots of options for development. For example, you could use an old mine as an access point, with the actual operation being 5 kilometers away. That wouldn’t have an impact on the surrounding countryside.”
One challenge that Minco has faced is the fact that mineral rights are privately owned in the UK. That has forced it to deal with numerous landowners in order to conduct exploration activities. In the North Pennines, the company had a slightly easier time because the target area mainly consists of larger estates, which meant there were fewer owners to deal with.
Minco sees big potential for UK lead mining — but challenges remain
On the whole, McKillen is bullish on the prospects for a lead-mining revival in the UK, but he acknowledges the challenges. “Many people have backed away from exploration in Britain because of the mineral-ownership laws,” he said. “It makes it impossible to put together the tracts of land required for a modern exploration effort. The country’s expanding population also makes locating projects more difficult.”
However, the UK’s struggling economy could help cast new mine proposals in a more favorable light. “New projects could create a significant number of jobs. That’s an important factor when it comes to approving new mines — but companies must still prove they can do it properly,” he said.
Securities Disclosure: I, Chad Fraser, hold no positions in any of the companies mentioned in this article.
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