Gypsum Mining

DESK STUDY ON THE REDEVALUATION OF THE POTENTIAL OF THE GYPSUM DEPOSIT ON

MALDEN ISLAND, KIRIBATI

Jackson Lum SOPAC Secretariat

September 1996 SOPAC Technical Report 240

Funding support for this project came primarily from the Government of Canada

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TABLE OF CONTENTS

Page

ACKNOWLEDGEMENTS..........................................................................................................4

INTRODUCTION .......................................................................................................................5

LOGISTICS ................................................................................................................................5

SIMULATION EXERCISE..........................................................................................................6

MARKETING ............................................................................................................................10

World Production...................................................................................................................10 Production and Consumption................................................................................................12 Pricing in US$ per tonne........................................................................................................14 Production Forecast..............................................................................................................15 Adequacy of Supply...............................................................................................................15 Competition ...........................................................................................................................16 Quality Demands...................................................................................................................17

ENVIRONMENTAL CONSTRAINTS......................................................................................18

GENERAL USES OF GYPSUM..............................................................................................18

Possible use of Malden gypsum ...........................................................................................19

CONCLUSIONS.......................................................................................................................19

REFERENCES .........................................................................................................................20

LIST OF FIGURES

Figure 1. Gypsum price 1975-1993...........................................................................................14 Figure 2. World gypsum production 1973-2000........................................................................15

LIST OF TABLES

Table 1 - Optimistic scenario ......................................................................................................8 Table 2 - Pessimistic scenario....................................................................................................8 Table 3 - Realistic scenario.........................................................................................................9 Table 4 - Gypsum: World Production by Country.....................................................................10 Table 5 - Commercial Grade gypsum specifications(Harben, 1991) .......................................17 Table 6 - Malden Gypsum specification (Geomarex report) .....................................................17 APPENDICES

1. Cashflow Analysis based on Data provided by Geomarex Report 2. Other relevant information on Gypsum 3. New Zealand Gypsum Imports for 1993, 1994 and 1995

Enclosure: Diskette KIRIGYPI.XLS

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ACKNOWLEDGEMENTS

Funds for this desk study were contributed by the Government of Canada.

The author thanks Mr George Niumataiwalu of Mineral Resources Department for the

assistance in the cashflow analysis and Dr Jim Dorian of East-West Center for providing

recent data on gypsum.

The author also acknowledges the assistance of Mr Peter Rodda of Mineral Resources

Department who peer read the report.

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INTRODUCTION

In response to a request by the Kiribati Government, a desk study was undertaken to re-

evaluate the potential of the gypsum deposit on Malden Island in Kiribati. Some 25 to 30

million tonnes of unconsolidated, particulate gypsum, immersed in seawater under a soft

overburden of organic material and thin calcarenites is reported in the shallow lagoon of

Malden Island, Southern Line Islands. The last resource assessment of the deposit was

conducted 13 years ago. In view of the changing technology, price and availability of markets,

the Kiribati Government has requested that SOPAC undertake a re-evaluation study with a

view to the possibility that the deposit may be economically viable.

The gypsum deposit was identified from drilling by Geomarex in 1979. The report by

Rossfelder 1983 (hence referred to as the Geomarex report) stated that the benefits offered

by the nearshore location of this deposit to the possibility of simple dredging were offset by

the distance to the potential markets, the absence of a natural harbour and the lack of fresh

water.

The report stated that a production rate of 600000 t /y was required to break even,

representing a production of 2000 t /d over 300 operating days, leaving 65 days for downtime

and maintenance. At 600000 t/y, operating costs were estimated to be US$4.80 per tonne and

at 400000 t/d operating cost were US$6.50, which included cost reductions, particularly fuel,

which represented 1/3 of the annual operating budget.

LOGISTICS

Malden Iland is located south of Kiritimati, in the equatorial arid zone, at 4°00’S and 154°55’W.

The island has an approximate area of 35 km2 with about 60% of the island being

represented by central lowlands and mudflats. The lagoon covers some 12 km2.

There are no maps of the island, but it is possible that an aerial photograph of the island may

exist due to the presence of the British Royal Air Force on Christmas Island (Kiritimati) during

the 1950s when nuclear tests were being conducted. Several attempts were made to find if

aerial photographs were available, but to no avail.

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A rough sketch of the island is included in the Geomarex report made from a photograph

taken from the plane.

There is no fresh water reported on the island because of the intense evaporation and low

rainfall. The island also has no harbour and no shelter. In the early 1900s when guano was

mined on the island, the report stated that landing and offloading of phosphate was conducted

by lighters through a surf channel from the beach at the west end of the island.

The sketch map shows a one-kilometre dirt airstrip located at the west end of the island. Also,

a long stretch of hard, even ground exist on the eastern side of the island and could be used

as an alternative airstrip.

SIMULATION EXERCISE

The most logical approach to re-evaluating the gypsum deposit without a site visit (which was

not possible due to logistic problems) was to conduct a simulation exercise by risk

assessment using cashflow analysis to observe different investment scenarios.

The base case of mining gypsum at 600000 t/y, suggested as the optimum rate by Geomarex

has been used, and all financial data presented in page 32 of the Geomarex report have been

inflated to 1996 levels using a uniform inflation rate per annum from 1983 to 1996, and then

subsequently discounted over a useful project life of only 15 years. At the base case

production level, the project has a life of 43 years. A project life of 15 years is used since

beyond this project life, the effects of discounting and inflating costs and prices become

dramatically distorted. Also, a project which takes more than 10-15 years to recover cost and

to provide a reasonable return to the initial investment input, loses its attractiveness due to the

volatility of the mineral commodity markets. The latter being driven by the supply/demand

criteria of the production of mineral commodities world-wide (Appendix 1).

The cashflow analysis that is presented is on an Excel 5.0 for Windows file KIRIGYP1.XLS,

(see computer diskette in pocket of report). It is set up such that all major variables can be

changed to then produce different investment scenarios and their different Nett Present

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Values1 (NPV, US$000) and Internal Rates of Return2 (IRR, %). These variables are :

• the annual production rate in tonnes;

• the price of gypsum, US$/tonne;

• the total capital cost as a % increase or decrease of the baseline total capital cost

values;

• the total operating cost as a % increase or decrease of the baseline total operating

cost values;

• depreciation rate, % straightline per annum;

• corporate tax, %;

• annual inflation rate, % per annum; and

• annual discount rate, % per annum.

This set up then allows flexibility in the generation of investment scenarios dependent on the

project assessor's project risk assessment.

Three scenarios have been chosen for this simulation exercise; (i) optimistic, (ii) pessimistic,

and (iii) realistic scenarios. Simulation parameters for this exercise are extracted from the

Geomarex report of August 1983 (Appendix1).

All three scenarios are based on the assumption of the availability of a market, harbour

facilities and adequate fresh water.

Tax regimes such as royalties, compensation etc have not been considered, apart from the

35% corporate tax.

1 Nett Present Value (NPV) is the difference between the total discounted income and the total discounted costs of a project over the project life for which the discount rate is specified. 2 The Internal Rate of Return (IRR) is defined as the discounted rate that equates the total discounted income with the total discounted costs of a project over the project life.

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Table 1 - Optimistic scenario Gypsum Unit Market Price, US$/tonne US$30

Annual Production Rate, tonnes 1000000

% Increase (+) or Decrease (-) from 1983 figures

Capital Costs 300%

Operating Costs 50%

Resultant NPV at Year 15, US$000 (US$65083)

Resultant IRR at Year 15, % -5.88%

Assuming there is a market for gypsum in the food and pharmaceutical industry to absorb

one million tonnes of Malden gypsum a year, and assuming also that capital and operating

costs have increased by 300% and 50%, the resultant NPV is still negative 58 million US

dollars and the resultant internal rate of return is negative 5.88, indicating that the gypsum will

be mined at a loss. The project breaks even at about US$37 per tonne gypsum with the same

parameters. An investor will begin to show interest when the price reaches US$56 per tonne,

assuming that the rest of the parameters remain constant. That is when the resultant IRR is

about 20%.

Table 2 - Pessimistic scenario Gypsum Unit Market Price, US$/tonne US$4



Capital Costs 300%

Operating Costs 50%


Resultant IRR at Year 15, % #DIV/0!

Under the pessimistic case, mining 400000 tonnes gypsum at a price of US $4 per tonne, and

with capital cost increasing by 300% and operating cost increasing by 50%, the resultant NPV

at year 15 is negative 3.63 million US dollars and the IRR is so negative that it is not

registering a number. In this scenario, the price of gypsum needs to be over US $90 just to

break even.

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Table 3 - Realistic scenario Gypsum Unit Market Price, US$/tonne US$7



Capital Costs 300%

Operating Costs 50%


Resultant IRR at Year 15, % #DIV/0!

Under the realistic scenario, using the gypsum price of US$7, the current price of gypsum, an

annual production rate of 1 million tonnes per year, and with capital and operating costs

increasing by 300% and 50%, the resultant NPV is negative 3.16 million US dollars with the

IRR so negative that it is not registering a value. Just to break even the price of gypsum needs

to be over US$36 per tonne mining at 1 million tonnes per year. In order to attract a company,

the price of gypsum needs to be over US$50 per tonne. Even with a zero percent increase in

capital and operating costs, the NPV and IRR are still very negative.

The assessor may choose other scenarios by changing variables in the simulation sheet of

the program KIRIGYP1.XLS observing the resultant NPV and IRR.

As a note of warning, this analysis must be viewed as a preliminary assessment of the

project because information is based on data provided that are at least over a decade old.

Discretion and good judgement is required if such an assessment is to be used for

investment planning purposes.

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MARKETING

World Production

World production is listed in Table 4.

Table 4 - Gypsum: World Production by Country

(Thousand metric tons)

Country 1989 1991 1992 1993 Afghanistan 3 3 3 3 Algeria 275 152 150 150 Angola 57 57 57 50 Argentina 402 78 567 570 Australia 1 800 2 000 2 000 2 000 Austria 806 655 792 800 Bolivia 4 6 Azerbaijan - - 100 75 Bhutan 22 22 20 20 Bosnia and Herzegovina - - 50 30 Brazil 861 967 970 970 Bulgaria 32 34 36 35 Canada 9 179 6 830 7 566 8 097 Chile 277 336 424 400 China 9 020 10 500 11 000 10 600 Colombia 553 639 671 640 Croatia - - 50 50 Cuba 130 130 125 125 Cyprus 34 37 35 90 Czech Republic - - - 650 Czechoslovakia 796 624 600 - Dominican Republic 171 118 83 85 Ecuador 11 24 24 24 Egypt 1 309 1 239 1 200 1 200 El Salvador 5 5 5 5 Ethiopia 2 2 3 25 France 5 684 5 600 5 160 5 000

Germany (marketable)

- Eastern states 2 678 - - - - Western states 2 201 - - -

Total 4 879 4 211 4 353 4 300 Greece 541 450 400 400 Guatemala 57 52 68 60 Honduras 25 27 26 26 Hungary 113 110 110 110

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India 1 564 1 553 1 550 1 900 Indonesia 404 400 400 Iran 7 858 8 050 8 716 8 600 Iraq 450 190 380 400 Ireland 300 400 350 350 Israel 31 26 26 26 Italy 1 231 1 285 1 300 1 200 Jamaica 78 136 145 144 Japan 6 300 5 400 5 400 5 500 Jordan 132 55 83 83 Kenya 36 36 36 36 Laos 104 77 80 80 Latvia - - 350 300 Lebanon 2 2 2 2 Libya 180 180 180 180 Luxembourg Macedonia - - 30 30 Mali 6 3 3 3 Mexico 5 390 4 774 5 158 5 828 Moldova - - 300 250 Mongolia 30 25 25 25 Morocco 450 450 450 450 Namibia - - Nicaragua 12 16 9 11 Niger 3 1 2 2 Pakistan 467 522 462 540 Paraguay 5 5 5 5 Peru 160 160 35 35 Philippines 117 28 25 25 Poland 1 416 788 843 800 Portugal 300 300 417 459 Romania 1 400 800 800 800 Russia - - 1 800 1 500 Saudi Arabia 375 375 375 375 Serbia and Montenegro - - 48 45 Sierra Leone 4 4 4 4 Slovakia - - - 75 Slovenia - - 10 10 Somalia 4 1 2 2 South Africa Republic of 407 420 334 250 Spain 5 500 8 054 7 750 7 500 Sudan 10 7 10 10 Switzerland 230 230 200 200 Syria 180 175 234 235 Taiwan 4 4 2 3 Tanzania - - 500 400 Thailand 5 477 7 196 7 111 7 000 Turkey 214 307 278 280 Turkmenistan - - 300 200 USSR 4 900 4 500 - - United Arab Emirates 87 95 95 95

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United Kingdom 4 000 3 500 3 000 3 500 United States of America 15 988 14 021 14 759 15 812 Uruguay 145 145 145 145 Venezuela 332 244 175 180 Vietnam 25 30 30 30 Yemen 63 100 80 80 Yugoslavia 546 450 - - Zambia 15 14 13 13 Total 000’ tonnes 104 216 100 141 101 671 103 203 Total 000’ tons 114 879 110 386 112 073 113 761

Source US Dept of the Interior, Bureau of Mines Dec 1994

Production and Consumption

The United States of America is by far the largest producer of gypsum in the world

contributing 15% of the world total. This is then followed by Canada, China and Iran who each

produce roughly 8 million tonnes a year. Total production for 1994 was 106 million tonnes

(1995 Annual Review). Total world production has averaged 103 million tonnes per year since

1989.

By region, North America is the largest producing and consuming region for crude gypsum

and plasterboard. Despite the United States of America being the largest producer, the

country still imports a considerable amount to satisfy its own need. The United States of

America also produces a considerable amount of byproduct gypsum but only a small

proportion is used. This is mainly due to logistic problems, or because some products are

unsuitable for construction purposes. Canada produces a large amount of gypsum (4th

largest producers of gypsum in the world), of which a large portion is exported to the United

States pf America for plasterboard. In North America, the United States of America’s total

consumption of gypsum for 1994 was 25.8 Mt. 1994 was the third consecutive year of

increases in gypsum production and consumption(1995 Annual Review). The growth in the

market was due to the relatively early emergence of the country from recession. This

reflected in demand in the housing market but it is predicted that growth may not last due to

increased interest rates.

In Europe, there are three main producers of gypsum and plasterboard. BPB is based in the

United Kingdom with approximately 50% of the plasterboard market, Lafarge of France and

Knauf of Germany roughly equally sharing the remainder. In Europe, consumption of gypsum

is in the same order of magnitude as that of the United States of America . Like in the United

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States of America , consumption has recovered from the recession. The United Kingdom

was the first to show an increase in consumption when the plasterboard market picked up by

8-10% in 1994 (1995 Annual Review). German consumption has remained high throughout

the recession due to reconstruction in the former East Germany.

In Asia, Thailand has emerged as the main supplier of gypsum, despite producing less than

China. All of China’s production is consumed internally. Thailand exports primarily to Japan,

Taiwan, Malaysia and Indonesia. In 1993 Thailand produced 7000000 t (Metal Mining Agency

of Japan, 1994).

Japanese production of 5000000 t is based on by-products, and all is consumed locally.

Substantial amounts of phosphogypsum are imported from Korea, Philippines and Indonesia.

A further 3 Mt of natural gypsum is imported from Thailand and Australia (1995 Annual

Review).

Australia produced about 2 Mt of gypsum (largest Pacific producer) in 1994 (see Table 4).

Gypsum deposits occur in South Australia, Western Australia, New South Wales and Victoria.

Gypsum is mined from coastal salinas, inland playa lakes and dunes. Production is

dominated by South Australia which accounts for about 80% of the country’s production. The

Western Australia industry has declined sharply since 1984 due to competition from

producers in Thailand which resulted in the loss of export markets in Southeast Asia (Barnes

1990).

New Zealand imports approximately 130000 t/y, principally from South Australia, China, United

Kingdom, Hong Kong, Thailand and United States of America (Appendix 3), while Fiji imports

roughly 4000 t/y for the cement industry from Mexico or South Australia at F$14/t

(pers.comm. Fiji Industries). Hawaii imports roughly 20000 t/y for the cement industry.

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Pricing in US$ per tonne.

The representative price is the company-reported value per tonne, FOB mine or plant. The

price of calcined gypsum (hemihydrite calcium sulphate CaSO4.1/2 H2O) is roughly US$20/t;

plaster US$125/t; filler grade US$80-200/t (Lawrence 1993).

Pricing of gypsum products delivered to job sites is cost competitive and hence has enabled

the products to remain competitive with other building materials such as plywood,

particleboard and chipboard. Since the depressed level in the early 1990s, the price of

gypsum has continued its overall improvement . Severe price competition and low profit

margin in the construction industry are the main reasons why prices have been so low.

Year Price/tonne1975 5.051976 5.511977 6.121978 6.871979 7.531980 9.181981 9.411982 9.331983 8.681984 8.751985 8.551986 7.121987 7.551988 7.341989 8.031990 6.691991 6.721992 6.821993 6.74

012

34

56

78

910

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

Source US Dept of the Interior, Bureau of Mines Dec 1994.

Figure 1. Gypsum price 1975-1993

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Production Forecast

Figure 2 illustrates the world production of gypsum from 1973 to 1994. As gypsum is tied

primarily to the building or construction industry (prefabricated products, building and

industrial plaster and cement retarder), the world gypsum consumption and demand trends

are not expected to be erratic. It is safe, however, to assume a growth rate of 2.5%3 for the

end use of gypsum. Therefore, using a growth rate of 2.5%, gypsum production for the year

2000 is predicted to be approximately 122 million tonnes.

50000

60000

70000

80000

90000

100000

110000

120000

130000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

tonn

es

Source Davis, 1993.

Figure 2. World gypsum production 1973-2000

Adequacy of Supply

Resources of gypsum are virtually unlimited and widely distributed in major producing

countries. World reserves are conservatively estimated at 3 billion tons (Pressler 1984).

Canada has extensive gypsum resources in Nova Scotia, New Brunswick, Ontario, Manitoba,

British Colombia and Newfoundland. Reserves are estimated to be some 400 million tonnes.

Nova Scotia has approximately 1500 km2 of gypsiferous rocks (1995 Metals and Minerals

Review).

3 US annual gypsum demand growth rate (Pressller, 1984)

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United Kingdom has large commercial deposits in Cumbria, North Yorkshire, Nottingham,

Staffordshire and Susssex.

France has effectively unlimited reserves of gypsum in the Paris Basin where the gypsum

beds extend over 8000 km2 with a thickness of up to 60 m (1995 Metals and Minerals

Review).

Germany has reserves in the Harz Mountains near Stadtodendorf and in the Werra-Fulda

area.

Mediterranean countries have large to very large gypsum deposits in the eastern part of Spain

and in the Balearic Islands, and also in Italy, Yugoslavia, and Greece. Reserves are also large

in CIS countries. Mexico has high-quality reserves in San Marcos Is land in Baja California Sur.

The Yucatan Peninsula also has large areas of commercial gypsum.

United States of America has reserves in five main areas: the Great Lakes area; the Gulf

Coast embayment of south Texas, Oklahoma, and Mississippi; the Permian Basin of New

Mexico; Rocky Mountains area; and southern California. Texas has gypsum deposits

extending 500 km2 , 50-130 km2 wide and up to 7 m in thickness. In Culberson County,

gypsum extends over 1500 km2, 80 km long, 25 km wide and up to 20 m thick (1995 Metals

and Minerals Review).

Competition

Other construction materials are easily substituted for gypsum especially cement, lime,

lumber and steel. In the manufacture of portland cement there is no practical substitute for

gypsum. Byproduct gypsum is now being substituted for crude gypsum in special agricultural

applications and is also being utilised for cement set-retarding and manufacturing of

wallboards.

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Quality Demands

Wallboards and plasters need gypsum greater than 85%, but producers prefer a minimum of

94-95% CaSO4 .2 H2O; 0.5-2% CaS2, 75-250 ppm Na, 120-400 ppm Cl, 50-250 ppm Mg, 75

ppm K, 10-15% free water (Harben, 1991).

Cement and agricultural requirements are less stringent.

Filler grade gypsum is 97% CaSO4 .2H2O with a brightness of 97%+ (Harben, 1991).

Food and pharmaceutical grades users require grades of 96.75% CaSO4 .2H2O with

maximum levels of As (3 ppm), Se (30 ppm), F (30 ppm), Fe (100 ppm) and Pb (10 ppm)

(Harben, 1991).

Table 5 - Commercial Grade gypsum specifications(Harben, 1991) National

Gypsum Georgia Pacific

US Gypsum

Japan Germany Agriculture grade

Gypsum min % 94 90 95 95 80-90 70 Ca sulphite, max % 0.5 - 20 0.25 0.25 Total Sol, max ppm 600 1000 Sodium max ppm 250 200 75 600 Chloride, max ppm 400 200 120 100 1.0 Magnesium max ppm 250 50 1000 Free water Max % 1 10 10 10 10 10 pH 6-8 3-9 6.5-8 6.5-8 5-9 Inerts 3.0 - 1 - -

Table 6 - Malden Gypsum specification (Geomarex report) Raw Sample% NaCl eliminated (washed)% Free Water 0.02 0.02 SiO2 and Insolubles 0.03 0.03 Gypsum (CaSO4.2H2O) 0.02 0.02 R2O3 (Fe and Al oxides) 96.18 98.20 Anhydrite none none CaCO3 1.29 1.32 MgCO3 0.44 0.45 Chloride as NaCl 2.16 - Brightness 88.4 against BaSO4

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From the two samples analysed by the company, washed Malden gypsum is high-grade

quality gypsum and falls in the food and pharmaceutical-grade category as well as the other

categories as far the CaSO4 content and the absence of metals are concerned. Markets for

the food and pharmaceutical category are very small, and it seems likely that the Malden

gypsum would have its best market niches in the wallboard, plaster industry and cement

industry where the commodity is bought in bulk (see Table 5).

ENVIRONMENTAL CONSTRAINTS

The identified gypsum occurs in the 12 km2 lagoon of the 35 km2 island. The thickness of the

gypsum bed varies from 3.8 m to 8.5 m with an average of 5.8 m extending for over 4 km2 but

probably not more than 6 km2 area, or half of the lagoon (Geomarex report).

If gypsum is to be extracted from the lagoon which represents some 35% of the island, there

will be significant environmental damage to both the island and the lagoon through the loss of

land and loss of fisheries.

A thorough environmental impact assessment needs to be conducted before any gypsum

mining.

GENERAL USES OF GYPSUM

Gypsum is one of the most common building materials used in the world. It is used for interior

walls, partitions and ceilings, either as plaster or in prefabricated products. The development

of wallboards revolutionised the building industry in the 1950s. Gypsum is the preferred

construction material for high-rise apartments and office buildings because of the lesser unit

weight and its fire-resistant qualities.

Crude gypsum is used in cement production, as soil conditioners in agriculture. In portland

cement, gypsum is used as a retarding agent for concrete. In agriculture, gypsum is used to

neutralise alkaline and saline soils, improve the permeability of argillaceous materials, and to

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provide sulphur and catalytic support for maximum fertiliser utilisation and leguminous

productivity.

Small amounts of gypsum are also used as fillers and in glass making, paper making and

pharmaceutical applications.

In developing countries, the largest single use of gypsum is probably as a setting retarder in

cement. While in industrialised nations the largest use is for the production of plasterboards

for dry wall construction methods.

Possible use of Malden gypsum

The sale of crude gypsum for the manufacture of plasterboards, prefabricated products and

cement would be the best use of gypsum because of the distance to markets. Crude

gypsum ore is a low-cost, high-tonnage commodity that requires integrated mine and

respective manufacturing plants and markets strategically located.

The next best use of gypsum is as a soil conditioner for saline soils, and may be used locally.

The amount needed, however, is expected to be extremely small, and the gypsum extraction

from Malden for the use in populated areas such as Tarawa may not be economically viable.

Local production of plasterboard and prefabricated products may not be economically viable

due to the high energy costs involved in the manufacturing process (Appendix 2) and also

because of the availability of cheap local housing material.

CONCLUSIONS

Despite the assumptions that there would be harbour facilities, water and market availability,

all three scenarios, the optimistic, the pessimistic and the realistic scenarios have shown that

the gypsum deposit on Malden Is land is still not economically viable at the current gypsum

price. In order to attract investment for gypsum development, the price of gypsum has to be

as much as US$50/t, seven times the current price, and mining at a rate of 1 million t /y

corresponding to more than 3000 t/d. Harbour facilities and the availability of water are still

limitations.

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The price of gypsum in 1983 when the Geomarex study was undertaken was US$8.68/t,

today it is approximately $7/t, which further worsens the economic viability of the project.

Being a low-cost and high-tonnage commodity ore which is abundant and readily available

throughout the world, it is extremely difficult to market gypsum unless manufacturing plants

and markets are strategically located nearby. Potential markets for Malden gypsum may be

Fiji, Hawaii and New Zealand, but the combined consumption of the three countries (125000 t)

is far below the production rate at which gypsum could be extracted, even at break-even

costs.

With gypsum tied to the construction industry, a slow and steady increase in gypsum

production is expected. Gypsum prices are expected to remain low due to the highly

competitive construction industry and also due to fact that gypsum could easily be substituted

for by plywood, chip and particle boards.

Locally, crude gypsum could be used as a soil conditioner in Kiribati where soil is saline.

However, the use will be limited and it may not be economically viable to extract gypsum on a

commercial basis.

It is worthwhile collecting more samples by augering and sending samples for analysis

whenever there is a visit to Malden Island by staff of the Ministry of Natural Resources.

However, small the food and pharmaceutical markets may be, it is worth pursuing.

REFERENCES

Barnes, L. C. 1990. Gypsum deposits in South Australia and Western Australia. In Geology

of the Mineral Deposits in South Australia and Papua New Guinea (Ed. F.E Hughes)

pp 1651-1654 The Australasian Institute of Mining and Metallurgy: Melbourne.

Bureau of Mines. Gypsum in January 1993, Mineral Industry Surveys,1993. U.S Department

of the Interior.

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Bureau of Mines. Gypsum in January 1994, Mineral Industry Surveys,1994. U.S Department

of the Interior.

Bureau of Mines. Gypsum in October 1994, Mineral Industry Surveys,1994. U.S Department

of the Interior.

Harben, P.W. 1991.The indUS trial Minerals handy book pp 37-39.

Lawrence, L.D. 1993. Gypsum. U.S Department of the Interior, Bureau of Mines.

Metal Mining Agency of Japan 1994. Mining Activity of the Asian Region 1992-1993.

Mineral Resources Information Center, MMAJ.

Mining Journal of London. Mining Annual Review 1993.

Mining Journal of London 1995. Metals and Minerals Review.

Mining Journal of London. 1994 Metals and Minerals Review.



Mining Journal of London.1993 Metals and Minerals Review.

Pressler, J. W. 1984. Gypsum mineral facts and problems. Bulletin 671. U.S Department of

the Interior, Bureau of Mines.

Rossfelder, A. 1983. Gypsum prospect assessment study, Malden Jurisdiction of the

Republic of Kiribati. A report to Kiribati Government.

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APPENDIX 1

Cash flow analysis based on data provided by Geomarex Report

SIMULATION PARAMETERS FOR THE MALDEN GYPSUM PROJECT

REPUBLIC OF KIRIBATI, BASED ON THE GEOMAREX REPORT AUGUST 1983. Gypsum Unit Market Price, US $/tonne $15

Annual Production Rate, tonnes 600,000


Capital Costs 40%

Operating Costs 30%

Resultant NPV at Year 15, US $000 ($54,451)

Resultant IRR at Year 15, % -14.60%

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APPENDIX 2

Other relevant information on gypsum

Terminology

Gypsum is ued as a commercial and generic term for all calcium sulphate minerals. Gypsum

has a chemical composition of CaSO4.2H2O (79% calcium sulphate and 21% water). The

well-formed transparent crystalline variety is selenite, the massive variety which is easily

carved is alabaster and the fibroUS , silky variety is satin spar. Anhydrite is a variety without

water of crystallisation (CaSO4). Plaster of Paris is commercially calcined gypsum

(CaSO4.1/2H2O) produced by heating CaSO4.2H2O to 350° F. Gypsum is also produced as a

byproduct in flue gas desulfurisation (FGD) and in the manufacture of phosphoric acid

(phosphogypsum), titanium dioxide (titanogypsum), and other products such as citric acid,

tartaric acid and lactic acid.

History

Early historical records show that gypsum has been ued by Chinese, Assyrians and Greeks

for artisitic work in carving and decorations. Ancient Egyptians used gypsum as inferior and

badly made plaster and mortar in the construction of pyramids. Plaster of Paris was

mentioned as early as the 13th century. The name came from the deposit of gypsum found in

Montmartre, in Paris. In the 18th century, gypsum was used a soil conditioner in western

Europe. In 1885, a commercial method of retarding the setting of gypsum plaster was

developed, revolutionising the use of plaster in construction.

Occurrence

Gypsum is the most common of the naturally occurring sulphate minerals and occurs in very

extensive, bedded sedimentary deposits associated with limestone, shales and sandstone,

marls and clay.

Gypsum deposits occur in any geological systems, but large deposits are common in the

Permian. They are also frequently found associated with source rocks for petroleum. Most

massive gypsum and anhydrite deposits occur as large, lenticular, statified bodies that were

formed by the evaporation of seawater in basins that had restricted openings to the sea.

These basins could range from a few kilometres to several hundreds of kilometres. Classic

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evaporite deposits were formed by deposition of anhydrite and later hydration of the anhydrite

by meteoric water to gypsum at depths related to topography, structure and climate.

Mining

Physical and chemical properties are important in the exploration of gypsum deposits. The

depth of hydration is important in mining because the presence of anhydrite could render the

gypsum unUS able for making plaster. Deposits at the surface are mined by open-pit mining.

Underground mining is also conducted by sinking shafts or driving adits. Open-pit mining of

gypsum is cheaper and hence much more common. In open-pit methods, gypsum is drilled

and blasted as needed, with broken gypsum rock hauled to crushers for grinding. The

processing of gypsum depends on the end use; for agricultural, filter and plaster and

wallboard products, gypsum is ground to 100 mesh or finer; while for use for cement, gypsum

is crushed to 5 cm.

Processing

To produce plaster and wallboard products, finely ground gypsum is heated in batch kettles to

remove three-quarters of the water of crystallisation and change gypsum CaSO4.2H2O to the

hemihydrate product CaSO4.1/2H2O. Gypsum is usually heated to 250°F for about 2 hours

and temperature allowed to rise to 350°F at which the calcine, called stucco, is dumped into a

hot pit. Various additives, including retarders or accelerators are then mixed in, depending on

the final product. Retarders are usually glue, starch or slaughterhouse by-products.

Accelerators are metal salts, set plaster and anhydrite. Products are then packed and sold

under varioUS trade names. Prefabricated products such as veneer base and wallboards are

produced by continuous automated equipment that can be adjusted for different products.

For wallboards, a slurry of plaster with additives (binders, aggregates, pigments) and

accelerator is spread between two moving sheets of paper. Moving through shaping rolls, the

wallboard is allowed to set. The wallboard is then cut into various shapes and lengths and

dried in a kiln.

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APPENDIX 3

New Zealand Gypsum Imports for 1993, 1994 and 1995

Documents

Gypsum Mining