Outlook for Drilling Minerals & API Specifications - Industrial Minerals

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API 13A Barite Specifications. Specific Gravity, g/ml. 4.20. 4.10. Water Soluble Alkaline. Earth metals, mg/kg max 250. 250. >75um residue, maximum 3%. 3%.
Outlook for Drilling Minerals & API Specifications William Miles, Ph.D. Miles Industrial Mineral Research 1244 N Columbine Street Denver, CO 80206

Industrial Minerals for Drilling • Industrial minerals provide desired functions • Barite – weighting agent • Bentonite – viscosity and suspension • Frac sand – proppant increases permeability of producing formation

Barite Physical Properties • • • •

Barite chemistry = BaSO4 Specific Gravity = 4.50 g/ml pure BaSO4 Hardness = 3 – 3.5 Inert and insoluble in water and organic solvents • Solubility Product = 0.87 x 10-10

Beneficiation of Barite Ore • Simple methods - jigging - tabling - washing • More complex methods - flotation - heavy media - magnetic separation

Barite Industrial Markets • Filler, extender, weighting agent in paints, plastics and rubber • Special application in brake and clutch pads • Cement jacket for under water petrol lines • High atomic weight blocks x-rays & gamma rays – hospitals, nuclear power plants. research • Source of barium for other chemicals • In 21st Century, estimated 78,000 metric tons/year

Barite for Drilling • • • •

1926 patent for oil well drilling Used in drilling mud for oil, gas Now major end use In 1970, USA became leading petroleum well drilling country, driving demand for barite and other industrial minerals • Drilling rigs increased dramatically after 2009 recession

Barite Functional Properties • Weights drilling fluid to increase pressure/force at drill bit as it rotates • Low hardness and fine grind minimizes drill string abrasion • Insolubility in water protects formation

Barite Ore Beneficiation • Simple beneficiation -Jigging, tabling, washing • Complex beneficiation -flotation -heavy media separation -magnetic separation

USA Barite Mining & Processing • Nevada has 4 mines near Battle Mountain for gas drilling market • All USA mined barite used in western states of Colorado, Utah and Wyoming • Georgia has 1 mine for industrial markets

World Barite Production 1000 ton units Year 2006 2007 2008 2009 2010 2011

World 7,910 7,910 8,570 6,430 7,850 7,800

USA Imported Barite for Drilling Year USA Production 2006 589 2007 455 2008 648 2009 383 2010 662 2011 640

Total Imports 2,550 2,600 2,620 1,430 2,110 2,200

China 2,388 2,536 2,516 1.328 1,924 NA

Other Import Countries • China provides ~95% of USA imports • India provides 44 to 83 thousand tons/year • Morocco, Mexico, Canada, other import countries

API 13A Barite Specifications Specific Gravity, g/ml Water Soluble Alkaline Earth metals, mg/kg max >75um residue, maximum 75um Residue, max 4% 2.5%

Hydraulic Fracturing Sand • Frac sands injected into pressure induced fractures within producing formation • Pressure reduced • Carrier fluids removed • Remaining frac sand maintains fracture gaps and increases permeability of formation for gas/oil • Gas/oil recovery begins

Frac Sand Characteristics • Rounded quartz grain formed from abrasive action • Source = Glacial sands and river sands • Structural strength of grain maintained • Other bauxite and ceramic beads used at greater depths, and pressures

Frac Sand Processing • • • •

Shaker tables Sieve/screen separation to size range Acid treatment to remove carbonates Magnetic separation

Frac Sand Technology • New application for release of natural gas from shale • In 2009, USA natural gas resources increased to 284 trillion ft3 • Demand for frac sand increasing since 2006

Industrial Sand & Gravel Consumption • Frac sand is 41% of total production • Other drilling uses: - Well packing - Cementing • Proppant competition – Bauxite – Ceramic beads

USA Frac Sand Consumption, million ton units Year 2006 2007 2008 2009 2010 2011

Fracturing 4.21 5.26 7.39 6.53 12.1 16.0

$/ton $44 $49 $49 $49 $48

Major Frac Sand Producers • • • • •

Unimin – Arkansas deposit and plant US Silica – Illinois Preferred Rocks of Genoa (entered in 2010) LaFarge not in this market Several smaller operations

API Frac Sand Specifications • • • • • •

Sphericity >0.6 Roundness >0.6 Solubility in Acid 2% and 3% maximum Silt Test clear of turbidity Xray diffraction mineral composition Crush Resistance:

Frac Sand Crush Resistance 6/12 mesh 8/16 mesh 12/20 mesh 16/30 mesh 20/40 mesh 30/50 mesh 40/70 mesh 70/140 mesh

2000psi 3000psi 3000psi 3000psi 4000psi 4000psi 5000psi 5000PSI

20% fines, max 18% fines, max 16% fines, max 14% fines max 14% fines max 10% fines max 8% fines max 6% fines max

Thanks to Sources • • • • •

T. Dolley at USGS for industrial sand M. M. Miller at USGS for barite R. Virta at USGS for bentonite and clays USGS Annual Minerals Yearbooks USGS Mineral Commodity Summaries