Mineral and Waste Management activity
The minerals sector is a useful barometer of the economic performance of the UK. When the recession hit, output of construction material fell by more than a third from peak and a large number of quarries and plants were closed or mothballed. Over the last six months, aggregate production has improved and many units are operating near maximum capacity.
Demand for aggregates is predicted to strengthen this year and turn into a sustained recovery. The market is never static and the ripples cased by recent company mergers, the investigation by the Competition Commission into unfair trade practices, the removal of mineral royalty relief and the need to protect manorial interests through registration has helped stir the pot. Minerals deposits are depleted over time and output is closely tied to the larger economy. Supply constraints and a push by operators to secure replacement reserves are on the cards.
The waste sector has also been affected by economic conditions but more fundamentally by changes in the nature of waste management, driven by fiscal and other measures designed to shift from landfill to recycling and energy recovery. The annual increases in landfill tax (to £80 per tonne in April 2014) is making other forms of treatment and disposal competitive.
Operators, however, have been frustrated in their search for suitable large scale sites mainly by the planning regime. While much of this new treatment capacity has been local authority contract led, there is an emerging requirement for a range of ‘merchant’ facilities including anaerobic digestion, biomass and gasification plants. Properties with consent and environmental permits for these types of uses are now in demand from both operators and investors alike.