Gypsum Centre of Excellence

Beyond Board:How Nova Scotia can Add Value to its Gypsum ResourcesKent Ward Gypsum Consulting Services Inc. In cooperation with Innogyps Inc.Thank Dianne Webber

Thank DNR ERDT1About GCSI and MyselfBased in Halifax

Honors BSc in Applied Chemistry from Guelph

13 years in the gypsum Industry

North America, Europe, Middle East & Asia

Support for business start-ups, operational improvement, product and process development, people development

2About Innogyps & Bob BruceBased in Hamilton, ON

PhD in Sulphur Chemistry

35 years in the gypsum industry world wide

Global Leader in gypsum technology and business development

3The problem!Reasons:

US housing crisis

Increased use of synthetic gypsum4The Effect!Gypsum production drop at an alarming rateOperations reduce/suspend productionImpact:Direct and indirect employment droppingRoyalty / tax revenue droppingFuture business development is being stifled

Employment form > 500 to < 100

2 companies put quarries on care and maintenance5But.Gypsum is growing globallyDemographicsGrowing middle class AffordabilityStandard of housing

Credit availabilityGlobal standardsRenovation

Why?Primarily in construction, but also agriculture and other areas6The opportunity!The gypsum industry is growing globally at a rate faster than population or GDP

Growth is driven by market demand

Growth is constrained by access to expertise, low cost energy and usable gypsum

Nova Scotia is in a good position to lead this business development globally

7The ActionMRB initiates strategy session (Feb 2012)

Re-examine the future of gypsum industry in NS

Participants are MRB, ERDT, NS Ag, Producers/Users, GCSI and Innogyps

8The OutcomeConviction to develop a long-term, sustainable gypsum industry over 5 10 years

Develop value-added gypsum businesses in NS capable to export products to the rest of the world

Move from selling rocks to selling products/expertise

9Potential BusinessesAgricultural Soil Additives

Gypsum Based Absorbents (oil absorbents and pet litter)

Architectural Products (floor screeds, plasters, decorative products)

Ground Control Applications (slope stability, erosion control, subsidence prevention)

10Applications of Gypsum in AgricultureResearch has demonstrated that gypsum has the potential to significantly improve crop yields and quality by addressing several issues that face the agriculture industry.Soil AcidityThe high content of Ca2+ in gypsum buffers the pH of the soil Alkali SoilThe high content of Ca2+ in gypsum can increase the cation exchange capacity, reducing high salt levels in the soilExchangeable Aluminum & Magnesium ToxicityGypsum provides SO42- to neutralize Al3+ and Mg2+ (along with other toxic substances)Alters soil chemistry

Beneficial impact on soil structure and characteristics

Improved drainage and water and air infiltration

Provides Ca and S to plants

Aids in the uptake of micronutrients11Applications of Gypsum in AgricultureSoil StructureReduced run-off and erosion by clay flocculationInfiltration & SaturationCa2+ and S are fundamental for positive crop growth

Nutrient AvailabilityFacilitates active transport pathways12

Effect on Soil StructureWith GypsumWithout GypsumReference - Norton, 2008Loosens and opens up soil for better water and air penetration

Improves plant emergence13Remediation of Sodic Soils

Gypsum 26t/acNo TreatmentReference - Xu, 2006Calcium ions displace sodium ions that are detrimental to plant growth14Improved Yield (Tomato)July 2005August 2005Gypsum TreatmentT/acre0202Yieldlb/10 ft row404828340.460.67Skin Ca%0.560.71Reference - Summer & Larrimore, 2006Improvement in yield has been demonstrated in many crops as a result of improved soil characteristics and better nutrient availability15Improved Shelf Life

No GypsumGypsum 1100 lbs./acCantaloupe stored for 4 weeks @ 40 FReference - Summer & Larrimore, 2006Provides calcium which is important for cell wall development in skin and rinds16Potential Market

Ag Gyp Producers

USGS Data

ACAA for FGD

Estimates are low. Reporting is not Mandatory17CompetitionClosest competing locations are: West of Mississippi in USASouthern Ontario in CanadaSpain, Morocco

FGD Gypsum Hazardous ??? EPAPhosphogypsum radioactive

Nova Scotia is lowest cost natural product!

Natural product is desirable

EPA yet to rule on classification of FGD as a hazardous waste

Access to year round deep water ports makes NS gypsum the lowest cost natural product available to US eastern seaboard18Gypsum CalciningThe price of conventional gypsum can range from $5-10/tonGypsum calcining can significantly raise the value of gypsum products. Most value added is through calcination into stucco/plaster

Allows us to easily change the form and transform gypsum into many useful products

19AbsorbentsHigh value-added productsNatural Calcined gypsum is naturally absorbent and clumpsCan engineer to maximize absorbencyCan control density (light weight products)Can modify surface for specific applications (carriers)Use alone or blend with existing products

One range of products are absorbents

Give out sample bottles20Absorbents

Oil absorbents

Pet litter/animal bedding products

Carriers and delivery vehicles for other chemicals (pesticides, animal feed additives)21

Employees - 856One example revenues of $260 million on 850,000 tons of clay22Architectural ApplicationsGypsum plasters, gypsum cements, decorative stoneHigh value-added products Natural Fire resistant Breathable and regulate humidity in interior applicationsCan formulate to impart desirable propertiesMoldable (can produce intricate designs)

Use the ability to change the form of gypsum23Floor Screed (Gypsum Cement)25% to 40% lighter than concrete based productsBetter fire resistanceNuetral pHQuick cure (can build the next day)Can incorporate NS aggregate

Used more in Europe (currently) >1,000,000 tons in Germany & Austria

Currently use expensive to produce alpha plaster because of low water demand and high strength

Patented technology has been developed in Canada that allows production of low water demand high strength products to be produced from inexpensive beta plasters

Take advantage of this technology to produce products that can be exported to the rest of the world (Gypsum and aggregate)

24Decorative ApplicationsDecorative StonePlaster Castings

Alabaster can be quite beautiful when polished and articles made from it can bring thousands of dollars from the right buyer

Low volume extremely high margins

Special plasters can be used to mould many useful and decorative items

Very intricate designs

25Ground Control ApplicationsErosion control/slope stabiltyEase of applicationSets to form crust/stays where you put it/steep slopesCan blend in seed/nutrients/absorbentsImproves drainage of soil

Subsidence prevention (fill underground voids)PumpableControl set time to ensure even distribution in void

26Ground Control Applications

HydroseedingSubsidence27The Nova Scotia Advantage

What advantages does NS have?28Extensive High Quality Gypsum Reserves

High quality deposits close to deep water ports

Estimates are 450,000,000 Tonnes29Low Cost Energy

Off shore gas 1/3 the price of that in Europe

Heritage gas $3.53/GJ30Educated, Talented Workforce

Nova Scotia has well educated skilled work force and world class educational institutions .

Provide opportunities for them here so they dont have to go elsewhere to find employment to take advantage of their skills and training31Transportation

Access to year round deep water ports

Easy access to Eastern Canada and US by rail and truck

International airport with routes to major hubs in the US and Europe32Government & Industry Partners

Government and industry that can work together to achieve common goals

Grow the Economy of NS

Jobs Here33Benefits to Nova ScotiaPotential OpportunityAgricultural GypsumAbsorbentsArchitectural ApplicationsGround ControlMarketsLocal/US EastGlobalLocal/US EastGlobalVolume (t/yr.)1,000,000200,000500,000700,000Gypsum Value (Million $/yr.)20205035GDP Value (Million $/yr.)80807595Jobs500500500630Note: 75K/yr. Jobs based on 50% labour content of GDP valueThese numbers represent GDP and employment estimates based on full development of the opportunities

$330 million in GDP and 2200 Jobs

5 to 10 years out.

Significant progress could be made in the next 2 to 3 years34Jobs are:MiningMineral processing, manufacturing, Quality, DevelopmentTruckingPackaging, DesignMarketing, Advertising, Selling, Field SupportExport, Dock workers, Marine shippingMaintenance, Personnel, Finance, Legal

Multiplier effect jobs in NS economy

Estimate of 3 indirect jobs for every direct job35Path ForwardDevelop Agricultural Gypsum and Absorbents Businesses

3 Stage proposal to government to take these forward.36Stage I Market Study$100K to develop detailed 5 year business plans

Stakeholder participationExisting producersExisting businessesIndustry associationsResearch institutions

4 month timeframe

Engage stakeholders to determine interest and future participation37Stage II - DemonstrationBusiness Financed (express interest)

Demonstration and test market development

Set up operating businesses

Led by industry

Technical, operational and market support as required

Timeframe 14 months from implementation38Stage III - Gypsum Centre of ExcellenceSupport & promote gypsum use worldwide.

Develop new applications.

Develop intellectual and human capacity in NS to support and expand the gypsum industry.

Make NS the leader in gypsum technology and expertise.

Leverage the resources of industry, government and academia to further the use of gypsum on a global basis

Act as engine for the development of technology, market info and human resource development39Future (6 Months)Market studies and business plans complete

Clear picture of investment required to move forward

Interested business partners

Initial steps to establish The Gypsum Centre of Excellence

40Nova Scotia

Why Not Here!Thank You for your attention41