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36 March 2006

THE GLOBAL GARNET market isdominated by supply from Australia andIndia, while the consumption hotspotsremain North America, the Middle Eastand Europe. The continued growth oflow cost Indian supply in recent yearshas put pressure on the margins of the

Australian and US producers, and as aresult, most suppliers now also offerIndian material, particularly in theblasting sector.

Leading US supplier, Barton Mines, forexample, imports both Indian and

Australian garnet, while continuing tofocus its own New York material on highvalue waterjet and other markets. The

global garnet leader, GMA, also sellsIndian garnet in addition to its own mainsupply from Australia.

Sandblasting and waterjet cutting arethe two large volume garnet users, butthere are also a number of other usesincluding glass polishing (eg. CRTscreens), pool filtration, coated /bondedabrasives (eg. sandpapers), waterfiltration and textile stonewashing.

In general, the Middle East and Asiaare the main markets for sandblastinggarnet (ship repair/ship building/oil rigmaintenance and repair), while the USAand Europe are the largest waterjetcutting consuming regions. The maindifference between the two markets is thatin waterjet cutting, garnet dominates,

while in sandblasting there are a numberof cheaper competing materials.

Given the market structure, new projectsor sources of supply are thin on theground. Olympia Resources still plans toget its Harts Range mine in Australia intoproduction by 2006, while in Ukraine,Black Sea Minerals is aiming to developgarnet supply from a tailings deposit (seeEurope section). In North America,Freeport Resources is continuing work onthe Hutton Garnet deposit in Labrador,with a bulk sample already taken and anextensive drilling programme completed in2005. There is also thought to be somegarnet being exported from Mexico, but

according to a leading importer thematerial has tended to be of low grade.

Garnet qualityMost of the garnet produced worldwideis either alluvial almandine in beachdeposits (Indian and Australian product)or almandine contained in hard rockdeposits (such as Barton in New York).

Almandine is used as it is the strongestof the garnet varieties. One of the keyproperties is the impact strength of thegarnet crystals, which is reflected in thespecific gravity and hardness of thematerial. Low purity can cause thegarnet to explode on impact when usedfor blasting, which means it cannot berecycled an obvious cost factor.

Hard rock garnet is often used forwaterjet cutting, particularly for cuttinghard and thick alloys, because of itshardness and sharp edged grains thatallow for a higher cutting speed. Alluvialgarnet tends to be sub-angular so ismore suited to blasting markets. As theparticles have not been crushed, theycontain fewer stress fractures so do notbreak down as easily during blastingand are more recyclable.

LogisticsMost garnet around the world is shippedin big bags, including 1 or 2 tonne bagsand smaller bags (eg. paper, PP 25kg

bags wrapped in pallets or sometimesinside bulk bags themselves). Shipmentsto North America are mostly 2 tonne(4,400lb) and 25kg (55lb) bags.

Loose bulk shipments are also madeto the key warehouses in the largestconsumption areas such as the MiddleEast. As with most other specialityindustrial minerals, the shipments formpart of a larger shipment of othercommodities rather than a vesselshipping garnet only.

Both bulk shipping of bags andcontainer shipping of bags is donedepending on the destination. FromIndia and Australia the garnet is shippedto a network of warehouses for onwarddelivery.

The GMA garnet mine at PortGregory in Western Australia

Courtesy GMA Garnet Group

India and Australia continue to dominate global garnet supply while the market

has become ever more competitive, particularly in the waterjet cutting sector

by Paul Moore, Deputy Editor

Joining the jetset

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All of the GMA garnet produced inAustralia is shipped from the port ofGeraldton, where bagged and bulkgarnet is stockpiled in large storagesheds. There are two main routes forshipping of garnet from Australia toEurope. For the UK and most of westernand central Europe, the garnet isshipped in bulk bags or bags inbreakbulk to a warehouse in Antwerp,and from there distributed to customers.If the demand is large enough, 3,000tonne coasters may be used to onwardship material within Europe somedeliveries to Scandinavia have beenconducted in this way. This method maybe used more in the future as demandin certain areas increases. Russia andeastern Europe (particularly Poland and

the Czech Republic) are some of thefastest growing regional markets forgarnet. Germany and Scandinavia arethe prominent blasting garnet users.

One of the largest waterjet cuttingmarkets for garnet in Europe is in Italy, toserve the needs of the dimension stonemarket, such as the marble industry. Thismaterial is shipped direct to Italy from

Australia in containers, either in big bagsor 25kg bags. The aerospace industrysuch as Airbus in France is also a largewaterjet garnet user.

From India, almost all of the garnet isshipped from the port of Tuticorin inTamil Nadu, where the main garnetproducers have their warehousingfacilities. Vetri Vel Mineral (VVM) deliversfinished garnet from its processing plantsto a 90,000ft2 warehouse by truck. Thecompany operates four wetconcentration plants with an ore feedcapacity of 600 tph, however, this isbeing increased to a level of 750 tph.

For the North American market, garnetis shipped into whatever port is mostcost effective and as close to the major

consumption areas as possible. Nearlyall garnet is then onward shipped fromthe ports to warehouses and ultimately,

into the major consumption areas bytruck. Barton, for example, maintainsgarnet stocks at Chesapeake, Virginia;New Orleans, Louisiana; San Diego,California and Olympia, Washington.

The other main market is the MiddleEast, where there are also largewarehouses to handle Australian andIndian alluvial garnet shipments.

Waterjet versus sandblastingWhile these are the two largest marketsfor garnet worldwide, they are also verydifferent. Garnet totally dominates thewaterjet cutting market, with 99% or moreof the market, while in sandblasting, itonly accounts for 1% or less.

The reason for this is that insandblasting, there are a whole host of

materials on the market, with their useby country depending on availability,silica legislation variations, the materialbeing blasted and customer preference.Materials used include silica sand,various slags (copper, nickel, coal,aluminium), olivine, staurolite, crushedglass, aluminium oxide and iron oxide.Baking soda is even used for moredelicate substrates.

In Germany, for example, there arelarge wastepiles of copper slag, and insome cases the German government payscompanies to use up the material. Slagmaterials are also widely used in China inplace of natural mineral products.

In sandblasting, blasting of steel shiphulls and oil rigs/tanks is now the largestconsuming market. Blasting tends to usecoarser garnet, such as the 30/60grade, which is the workhorse productfor general purpose blasting, but coarsermaterials are also used for very heavyduty coating removal. Finer grades suchas 80 mesh are used for delicate blastingwork on aluminium and stainless steel.As shipbuilding and ship repair have

moved to the Middle East and Asia, therehave been major account losses.Danyard in Frederikshavn, Denmark, for

example, used to use as much as 11,000tpa of garnet but closed in 1999. SouthKorea and Singapore with their largeshipbuilding and ship repair industry arenow large garnet markets, with users suchas the Hyundai yard in Ulsan andSingapore Technologies Marine.

The Middle East and the United ArabEmirates (UAE) are still the largest usersof blasting garnet, from shipbuilderssuch as Dubai Drydocks and Abu DhabiShip Building Co., and oil servicecompanies such as the Gulf MarineMaintenance & Offshore Service Co.(GMMOS). In Saudi Arabia, the

ARAMCO oil company is a major user.GMA has dedicated bulk handling and

warehouse facilities in both Dubai andthe UAE. VVMs distributor in the UAE is

the Abu Dhabi Construction Co. Chinais likely to be a larger user of blastinggarnet in the future as the worldslargest shipyard is under construction onShanghais Changxing Island. Areas ofincreased oil and gas activity are alsofocus markets, including the Caspianregion and Far East Russia.A key component of the waterjet

market is the waterjet equipment itself.Several large companies manufactureand supply the equipment together withthe servicing aftermarket that comes withit, and it is through these companies thata lot of the garnet abrasive orders areplaced. These orders are then passed onto the garnet producers/distributors.Major global waterjet companies includeFlow International Corp. and OMAX.

Different garnet sizes are also used indifferent waterjet systems 120 mesh fora very smooth surface, 80 mesh forgeneral purpose uses, and 50 mesh,which cuts faster than 80, but gives aslightly rougher surface. Flow Internationalcites delivered US waterjet garnet costs atbetween $0.16/lb to $0.40/lb delivered

(roughly $350-880/tonne), dependingon the type and quantity you purchase.Barton occupies the upper end of this

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The GMA wet plant at Port Gregory Courtesy GMA Garnet Group

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market with its high qualityhardrock grades, where it isdifficult for others to compete.

Large users of waterjet abrasivesinclude the aerospace andautomotive industries, whereprecision parts are cut from highstrength materials such astitanium, special steels, aluminiumand carbon composites. Thedimension stone industry also useswaterjet systems, eg. for cuttingslabs for kitchen countertops.

The rise of GMAGarnetIn the space of 15 years, theGMA Garnet distributors in

Europe, Middle East and Asia

(owned and operated byKetelsen Enterprise and Jebsen& Jessen Group) have gonefrom being regional salescompanies to 100% owners ofthe largest garnet mining,processing and distributionnetwork in the world.

The core asset is the mine,located near Port Gregory, 150kmnorth of the port of Geraldton inWestern Australia. The garnet ismined and concentrated in a wetprocess using spirals, hydrosizersand fresh water washing and

dewatering.Prior to April 2002, the GMA

Garnet operations in Australiawere 50% held by US garnetgroup Barton Mines LLC, and50% by Australian investmentgroup Hancock and Gore Ltd(HGL). In 2001, HGLannounced the sale of its stakefor $18m. to GarnetInternational Resources Pty Ltd,a company established by the

shareholders of GMA Garnet(Europe) GmbH (Ketelsen/J&J).

The sale went ahead despiteBarton having preemptive rights toacquire the stake within a 90 dayperiod. Barton continued to holdits 50% stake from April 2002 toMarch 2005, when GarnetInternational Resources Pty Ltdtook 100% control of GMAGarnet Pty Ltd. However, Bartoncontinues to be a buyer of GMAgarnet for the North Americanmarket (as it was before, duringand after the partnership withGarnet International Resources).GMA also has its own distributionoffice in Houston.

The GMA Garnet Group (comprisingGMA Garnet Pty Ltd, Australia plus thedistribution companies in Europe, theMiddle East, Asia and the USA)distributes and sells GMA Garnetworldwide through a well establishednetwork of distributors with strategicstockpiles of product throughout thoseregions. Other areas are serviceddirectly from the Perth head office. GMAalso distributes Indian garnet under itsGMI brand for the sandblasting market,though it is unclear which Indianproducers this is sourced from.

GMA has continued to invest in globalgarnet facilities. In March 2004, GMAGarnet Middle East FZE established afully integrated garnet processing facilityin the Jebel Ali Free Zone, United Arab

Emirates (UAE), with a design capacity of50,000 tpa, to service its customers inthe UAE and throughout the Middle Eastand Caspian Region. This operationadded to existing bulk handling facilitiesin Saudi Arabia and Antwerp.

China gathering paceWith the rapid growth in the Chineseeconomy, the production capacity anddemand for garnet have also beenincreasing in recent years. Leadingdomestic producer and supplier, WuxiDing-Long Trading Co. Ltd (Sinogarnet),now estimates the total productionquantity of garnet in China to be in theregion of 90-100,000 tpa. Some estimatethat the Chinese garnet market is nowincreasing at a rate of 10-15,000 tpa.

There are two major domesticproducers Sinogarnet with miningoperations in Liang Cheng City, InnerMongolia, a hardrock deposit with morethan 1m. tonnes of reserves, and LeshanCarborundum Natural Abrasives Co inSichuan province. The Inner Mongolia

XL Abrasives Processing Co. Ltd (XL

Garnet) also produces some materialfrom the same area as Sinogarnet buton a small scale.

Sinogarnet has increased its productioncapacity to 20,000 tpa in 2006, with90% destined for overseas exportmarkets. According to managing director,Raymond Ding, broadly speaking,Chinese local production can meetChinese garnet demand currently. But thecompany also imports 2,000-3,000 tpaof alluvial garnet from GMA in Australiaand some Indian beach garnet.

Some of the best Chinese garnet isexported for waterjet markets, adding toother exports of blasting grades. K.Chockalingam, CEO at Indian OceanGarnet Sands (IOGS) commented,

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The Sinogarnet hardrock garnet mine, pre-crushedand crushed garnet stockpiles and finished baggedproduct in ChinaCourtesy Sinogarnet


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Chinese garnet is filling up the extrademand where there is not enough Indiangarnet, especially the coarse grades like20/40. The coarse grades are exportedto Japan and the Gulf countries andChina has its own demand. But they alsoimport waterjet grades from India , theUSA and Australia.

China domestic market demand hasbeen increasing for two main applications garnet powder for cathode ray tube(CRT) and other glass polishing, andwaterjet cutting. The sandblasting marketfor garnet in China is very small, as copperslag is mostly used due to its much lowercost. The CRT market has been boosted asplant capacity has been shut in North

America and Europe, and new plants havebeen constructed in China.

With electricity prices so high, thereare also reportedly some brown fusedalumina (BFA) producers that have beenmixing garnet powder into BFA powderto cut costs.

Imported garnet still has to competeagainst local Chinese material,especially 60 and 80 mesh product fromnumerous small suppliers in Hebeis

Xingtai area for the waterjet cutting andglass polishing markets. But while theprice from these producers is lower thanthat for the imported products, thequality also tends to be not as good.

India a garnet powerhouseHaving begun as a small producer ofpowder garnet grades for CRT polishing inJapan in the early 1980s, India is nowwell established as the largest singlesource of alluvial garnet in the world, andgarnet from the main deposits in TamilNadu now reaches all of the worlds mainareas of consumption.

Total production of garnet in India ismuch higher than in China probably inthe region of 260,000 tpa. The key to the

importance of India is the sheerabundance of garnet in the beachdeposits, the relatively simple and low costmining, basic processing route and verylow labour costs. Both VVM and BeachMineral Co. (BMC) mine garnet aroundKuttam, near Tuticorin, while IOGS minesgarnet at Karaichittupudur on the tip ofsouthern India.

Some estimate that as much as 50%of Indias total garnet production is nowconsumed by Gulf countries forsandblasting oil tanks and rigs or shipcleaning. Another 25% market is used in

Asian countries and with the balanceexported to Europe and the USA.

There is often confusion about theIndian market as over the years different

producers have emerged, whiledistribution relationships with westernimporters have changed. The largestproducer in India remains VVM (SuperGarnet grades). VVM has large miningareas and six processing plants forproducing garnet and ilmenite products.The main warehouse is in nearby Tuticorinport, from where major competitors alsoship their material.

The company claims to produce about135,000 tpa of the Indian total. Like theproduction in Australia, Indianproduction is largely for export, whichaccounts for 90% of sales. There has notbeen a significant increase in domesticIndian demand, where steel sandblastingand other abrasive markets remain thelargest users. Indian labour costs remain

very low, so the gas cutting is used tocut steel instead of waterjet systems. Inaddition, the water jet cutting machinecapital cost is very high as are the spareparts costs. Silica sand is still dominantin the domestic blasting market.

The other main Indian producers areIOGS (Power Garnet grades), whichproduces about 36,000 tpa and BMC,also based in Tamil Nadu. Like VVM,both of these companies also very activeon the European and US markets. Allthree have a global network ofdistributors to handle their products (seeUSA and Europe sections forinternational trade). Other suppliersinclude Indian Rare Earths and IndustrialMineral Co. (IMC) with its SupremeGarnet grades.

The main export markets for Indiangarnet remain the UAE, South Korea,

Australia, USA, Japan and Europe. Themarket advantage of Indian garnet hasbeen the availability of large volumesand its low cost. Estimates for the FOBIndia price for garnet are as low as$70/tonne in some cases, thought by the

time the product reaches Europe or theUSA this rises to about $250-300/tonne.

Transworld Garnet India Pvt Ltd has aunique position, as it is majority owned byWGI Heavy Minerals, one of the main USsuppliers. Transworld operates a plantabout 18km from Tuticorin, supplied fromsubsidiary Bengal Bay Garnet and hasbuilt up an important export trade to theUS waterjet market. Flow Industries haspurchased Indian garnet from WGI,marketing it worldwide as 80 mesh PaserPlus for use in waterjets. It has not beenan easy ride for WGI in India morerecently, however, and in 2005/2006 thecompany has been trying to resolvelicensing and permitting issues with theIndian government.

North American marketThe US market, like Europe, hasbecome more and more dominated byimports from India and Australia.

According to USGS figures, importshave increased from 23,000 to 32,200tonnes between 2001 and 2005, whileproduction over the same period hasdeclined from 52,700 to 28,400tonnes. However, market players say theactual import figure is much higher thanthis, and the overall market for garnet inthe USA is over 100,000 tpa.

The imported garnet satisfies much ofthe demand in the filtration and blastingmarkets, as well as some of the mid-range waterjet market. The high endmarkets premium waterjet grades andlapping polishing grades are dominated

by crushed hard rock supply from BartonMines, which is much too expensive forthe blasting market.

Consumption of garnet for blasting in theUS is approximately 50-60,000 tpa. Thishas been overtaken by consumption ofgarnet for waterjet cutting, which is nowapproximately 60-70,000 tpa. Consumptionof garnet for water filtration in the US is nowapproximately 20-30,000 tpa.

There are only three actual producersof garnet in the USA Barton Mines LLCin New York, WGI Heavy Minerals inIdaho (through subsidiary EmeraldCreek Garnet), and NYCO Minerals inNew York (produces garnet as abyproduct). NYCOs material is truckedto a processing plant in nearby Keesville,operated by International Garnet, whichis now part of Canadas Opta Minerals.

According to Opta sales and marketingmanager, Jacques Decarie, the Keesvilleplant is currently sold out. Opta, like allthe other players is also an importerfrom India, but also from China.

Barton produces garnet products formany diverse applications but its

specialities are high value grades forwaterjet cutting, bonded and coatedabrasives and specialty lapping andgrinding medias. It owns and operatesmining and milling operations in the

Adirondack mountains of upstate NewYork. Barton was unwilling to commenton its market position but is listed by VVMas one of its two main distributors in theUSA. However, according to industrysources, the company has more recentlybeen importing garnet from BMC. Bartonalso purchases garnet from AustraliasGMA for the North American market.

The other main importer in the USA ofIndian garnet is California-based S2K

Abrasives, which is a major distributor ofVVM garnet throughout North America. It

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also supplies garnet to another distributor,Universal Minerals Inc. based in Texas.

The issue of whether more Chinesegarnet will be imported to the lucrative USwaterjet cutting market is a matter ofdebate. One source commented,Chinese garnet may have the potential toplay a role in the waterjet market, howeverconsistent quality needs to be achievedbefore that will happen. It is thoughtunlikely that Chinese garnet will makemuch of an impact in the US blastingmarket, as the current material sent to theUSA for blasting is not recyclable. It couldpotentially still be used for blasting if theprice was competitive with slag products,however the cost of shipping the materialfrom China to the US negates that benefit.

Consumption of garnet in Mexico and

South America is negligible compared tothe US market and is mostly suppliedfrom Australia.

European marketLike the USA, the European market isdominated by Australian and Indianproduct, and indeed even more so giventhe complete lack of European garnetproduction. All the main Indianproducers VVM, BMC and IOGS have distributors in Europe.VVMs material is handled by

Germanys specialist abrasive supplierAsikos Strahlmittel GmbH, based inDinslaken and part of the Steag Group.

Asikos has processing and warehousingsites in Duisberg and Herne.

The sole distributor in Europe for IOGSis Power Garnet, based in Denmark. It hasits main warehouse in Denmark, with

smaller warehouses in the UK, Ireland andFinland. Beach Minerals garnet is also inthe European market, but is thought to sellthrough several different channels asopposed to a single distributor.

GMA has a number of sales offices inEurope, with the head office, GMAGarnet (Europe) GmbH, located inHamburg. Further sales sites areelsewhere in Germany, as well asSweden, Denmark, and the UK.Distributors are used in other Europeanmarkets. Warehouse stocks of garnet arelocated in Poland, Finland, Sweden, theUK, Spain, Italy, Belgium and Germany.

The garnet market worldwide is quitefragmented, and Europe is not exception,with many small users buying a few tonnesof material as needed. GMAs managing

director, Torsten Ketelsen commented,garnet is not sold as a commodityproduct but requires extensive marketingand distribution effort and investment interms of technical promotion and strategicstock holdings to satisfy on the spotrequirements. The individual sales lot sizesare extremely small compared to otherindustrial minerals, commonly no morethan two to four metric tons per sale.Success is more related to understandingthe end user market and providing thenecessary distribution infrastructure.

For many years, Ukraine has beentouted as an imminent new garnetsource for Europe. US company BlackSea Minerals Inc. (BSM), headed byWalter Stunder, has spent a number ofyears trying to get the Ivaniv garnetdeposit into production. Ivaniv is locatedin the west central part of the country.

However, BSM has to date beenunable to raise the $5m. plus ofinvestment that would have beenrequired and the project is currently onhold, though the quarry is producingsome aggregate. Some toll processing orgarnet was done from ore supplied bythe Zavaloye Graphite Combine, and ajoint venture project was considered,however, the Zavaloye garnet had highlevels of impurities and thereforedisintegrated more easily than the pureralmandine at Ivaniv. It is thought thatBarton also looked at the Ivaniv projectbut at the time exports of Indian garnethad begun to increase and the companychose to concentrate on premiumproducts from its home mine in New Yorkin combination with lower cost imports.

BSM is currently looking at a tailingsdeposit in Ukraine, which could be broughtinto production for a much lower cost. Thecompany has standing orders for 11-12,000 tonnes of garnet if it gets intoproduction, and the target production forthe tailings deposit (which would alsoproduce rare earth minerals) would be inthe region of 15-20,000 tpa of garnet. Thecurrent plan is to list BSM on the VancouverStock Exchange in 2006 with a view toincreasing the profile of the new project.

Stunder told IM that the marketadvantage for BSM would be the shortdelivery time to consumers in central andeastern Europe. The Austrian market couldbe reached in only a day by truck or railmeaning just in time deliveries could besatisfied. The material would also be welllocated to supply markets in Poland,Czech Republic and Italy.

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Bulk sampling at one of the Hutton Garnet beach deposits inLabrador, eastern Canada Courtesy Freeport Resources

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