Kaolin and Ball Clay

SIC 1455

Companies in this industry

Industry report:

This category covers establishments primarily engaged in mining, milling, or otherwise preparing kaolin or ball clay, including china clay, paper clay, and slip clay. Establishments primarily engaged in grinding, pulverizing, or otherwise treating clay, ceramic, and refractory minerals not in conjunction with mining or quarrying operations are classified in SIC 3295: Minerals and Earths, Ground or Otherwise Treated.

Industry Snapshot

In 2009, about 190 U.S. firms operating 830 clay pits or quarries produced an estimated 25.3 million metric tons of clay. Of that total, kaolin and ball clay accounted for about 5.2 million and 820,000 tons, respectively. The top 20 companies produced about 50 percent of all clay by tonnage and accounted for about 80 percent of the total clay industry by revenues, which were $1.4 billion in 2009.

Kaolin is used for paper coating and filling (62 percent) as well as other uses (38 percent). Ball clay, which makes up a much smaller segment of the industry, is used for floor and wall tile (38 percent), sanitaryware (24 percent), and other applications (38 percent).

In the late 2000s, almost all kaolin was produced in Georgia. Known as kaolin because it is primarily found near Kao-Ling, Jianxi, China, this type of clay is Georgia's largest mineral resource. The deposits run across the middle of Georgia, left there as the result of erosion of crystalline rocks in the Piedmont Plateau, which were deposited along Georgia's Fall Line. Minor deposits of kaolin were also produced in South Carolina and five other states.

Organization and Structure

Clays are classified according to their relative plasticity or malleability, their strength when moist (green strength), their strength after drying (dry strength), their air shrinkage properties, and their vitrification range. Vitrification refers to the process by which clay molecules begin to fuse when exposed to heat. A clay's vitrification range, therefore, describes the temperature levels between which the clay begins to fuse and achieves its final fusion or hardness. Clays are often mixed or blended to achieve the desired properties required for their end use.

Kaolin.
Whiteware ceramic consists of kaolin, ball clay, feldspar, and ground silica. Kaolin, or china clay, derived its name from the hill where it was first extracted in Kao-Ling, China. Historically, more than half the annual U.S. production of kaolin was used as filler and coating material in high-quality paper. Along with wood pulp, kaolin traditionally constituted a large percentage of the paper's content. The properties that recommend kaolin as a paper clay include natural brightness, ink absorption characteristics, chemical inertness, and superior dispersability when introduced into the water solutions from which the final paper mixture is derived.

There are no commercial substitutes for kaolin as an ingredient in coated paper. However, the increasing scarcity of wood pulp and the high costs of transporting kaolin outside the southeastern United States spurred the papermaking industry to develop alternatives to kaolin as a paper filler in the 1980s. The invention of lime- and calcium carbonate-based alkaline paper manufacturing techniques meant that papermakers would require less wood pulp for paper production. It also meant that they could avoid the high transportation costs associated with kaolin paper fillers, which resulted in a potentially long-term loss of demand for the industry's kaolin mining firms.

However, in addition to its uses in papermaking, kaolin is also favored as a filler in rubber production for its low cost and stiffening or reinforcing characteristics, as well as for the properties that recommended it for papermaking. Comparatively small amounts of kaolin have been used as extenders and fillers in the manufacture of paint, linoleum, leather, wallpaper, textiles, and fertilizers. Other uses of kaolin include the production of fungicides and insecticides and the manufacturing of porcelain, chinaware, and other ceramic products. Highly refined kaolin has also been used in cosmetics and pharmaceutical products.

Kaolin is a relatively inexpensive commodity, but it has a higher unit price than clays that are more common, and producers report slim profit margins because of the low per ton price, unless it was extracted and processed in greater bulk without added cost or offered to the market in a refined, higher-priced form. For example, in the late 1980s, Georgia-based Nord Kaolin Company introduced a line of customized kaolin-based pigments to act as "opacifiers" to reduce the transparency of paper and to augment the printing quality and whiteness of premium or "glossy" magazine paper, lightweight periodicals paper, and uncoated copier paper.

Ball Clay.
Ball clay, a light-burning, high-grade ceramic clay, derived its name from the shape it took when it was removed from open pit mines in the early days of the clay mining industry in Great Britain. About 90 percent of U.S. ball clay was found in western Tennessee and Kentucky, but other mined deposits existed in California, Maryland, Mississippi, and New Jersey. Ball clays differ in color, plasticity, strength, and firing properties, but almost all their uses are ceramic. High-grade ball clay is used in the manufacture of dinnerware, porcelain, and ceramic-based bathroom fixtures. Ball clay is also used to produce "wad" and "sagger" clays used in ceramic kilns to protect and support the clay being baked. Ball clay is shipped in bags and bulk carload lots--in ground, "air floated," lump, or shredded form. Like kaolin, ball clays are produced in relatively small quantities compared to other clays and thus have a generally higher unit price.

Background and Development

Kaolin and ball clays were most often mined by directing hydraulic high-pressure jets of water on the clay faces of open pits, loosening the soft clay from the deposit. The liquefied clay mixture or "slip" was then raised by bucket elevator to a flume or chute that transported it to the preparation plant. In other methods, the clay was mined by removing the overburden (or overlay of soil or rock) by power shovel or dredging "dragline" machine. The exposed clay was then mined by a power shovel and delivered to the preparation plant by conveyer belt, truck, or rail.

At the preparation plant, the clay mixture was refined and "de-watered" by mechanical drying equipment and filter presses. The undesired grit minerals, such as sand, rutile, or mica, were separated from the clay by such processes as grinding, washing, screening, settling, or flotation (in which the extracted mixture was immersed in a solution that caused the undesired elements to sink to the bottom while the clay rose to the surface).

The mining industry as a whole has traditionally faced very high capital costs associated with exposure to weather-related work interruptions, as well as the cost of exploration activities and preparation of feasibility studies. Other costs included the expense of acquiring and holding rights to mineral properties, purchasing and maintaining equipment, and developing and operating the mines and preparation plants. The mining operations of kaolin and ball clay producers were also governed by environmental regulations that required them to control dust emissions, reclaim strip-mined sites, and purify production waste materials.

Kaolin.
The United States remained the world leader in kaolin production in the early 2000s. In 2002, 78 quarries in ten states produced 8.01 million metric tons of kaolin, down from 9.45 million metric tons produced in 1998. About half the kaolin produced was water washed. According to the U.S. Geological Survey, the United States exported about 3.4 million metric tons of kaolin in 2003 and imported approximately 275,000 metric tons from foreign sources. The primary supplier of kaolin imports was Brazil, which supplied 61 percent of the total despite the fact that it was not a major supplier of kaolin until the late 1990s. In fact, imports from Brazil accounted for nearly all the 117,000 metric ton increase in imports realized by the United States between 2002 and 2003. In 2003, total world production of kaolin was estimated at 45.1 million metric tons, with the Commonwealth of Independent States ranking as the leading producer worldwide behind the United States.

Demand for kaolin, which was used primarily for paper coating and filler, was challenged by competition from calcium carbonate, which lessened demand for kaolin-based paper coating and filler products. Kaolin was also undermined by waning demand for paper, which had increased dramatically in price throughout the late 1990s and early 2000s as a result of the shift toward paperless transactions in the business world.

By the mid-2000s, production of kaolin fell to 7.8 million metric tons valued at $860 million. Despite a decline in kaolin production of 7.47 million metric tons, the value increased to $980 million in 2006, due in part to energy surcharges on kaolin end uses, significantly affecting production cost of this energy intensive substance.

Of the 7.47 million metric tons of kaolin produced, 3.61 million metric tons was water washed. Georgia accounted for the production of 6.92 million metric tons of kaolin valued at $945 million in 2006, down from 7.19 million metric tons produced in 2005. Overall paper sales decreased from 4.75 million metric tons to 4.61 million metric tons in 2006. Kaolin produced in the United States in 2007 and 2008 totaled 7.11 million tons and 6.28 million tons, respectively.

Ball Clay.
In 2002, the U.S. ball clay mining industry produced an estimated 1.12 million metric tons, up slightly from 1.11 million metric tons in 2001. The largest increase in demand and consumption was for sanitaryware. Sales growth for ball clay was attributed primarily to the steady growth in commercial and residential construction, as well as in home renovations. The construction segment provided consistent demand for sanitaryware, tile, and whiteware. However, competition from clay-based ceramic imports began to weaken this demand in the early 2000s. Ball clay exports in 2003 were 139,000 tons, according to the U.S. Geological Survey.

In 2006, the U.S. ball clay industry produced 1.19 million metric tons, down slightly from 1.21 million metric tons in 2005. Tennessee was the leading producer of ball clay, followed by Texas, Mississippi, and Kentucky. The major ball clay markets in the United States were floor and wall tile (41 percent), sanitaryware (31 percent), and other uses (28 percent). The U.S. Census Bureau reported that 95,000 tons of ball clay were exported in 2007, compared to 140,000 tons in 2006. Production of ball clay totaled 1.07 million tons and 1.11 million tons in 2007 and 2008, respectively.

Current Conditions

Kaolin.
Between the late 1990s and late 2000s, kaolin suffered first from a push in the marketplace to replace kaolin in products with less expensive materials (primarily calcium carbonate) then from a downturn in the economy that depressed paper sales. As a result, kaolin domestic production declined steadily through the second half of the 2000s, from 7.8 million tons in 2005 to 5.2 million tons in 2009. Exports also declined, from 3.58 million tons in 2005 to 2.15 million tons in 2009. Price per ton, however, rose each year, increasing from an average of $110 per ton in 2005 to $143 per ton in 2009.

However, the worst years were likely behind the kaolin industry as most practical substitutions of calcium carbonate for kaolin had already taken place. In addition, global demand for kaolin was expected to grow slowly during the early 2010s as the world economy began to improve, especially as the demand for paper products returned. China, in particular, was expected to drive demand and, in fact, overtake the United States as the largest consumer of kaolin. In addition, Brazil was expected to overtake the United States as the world's largest exporter by 2013.

Ball Clay.
Like kaolin, production of ball clay declined every year between 2005 and 2009, from 1.21 million tons to 820,000 tons, primarily due to a severely depression construction industry. In 2008, the U.S. housing market collapsed, and by 2009, new housing starts hit a 50-year low, thus limiting demand for all construction-related supplies. Average price per ton increased from $44 to $48 between 2005 and 2009. Exports of ball clay fell off significantly, from 141,000 tons in 2005 to just 45,000 tons in 2009. Although some signs of an improved economy boded well for ball clay producers by 2010, the industry was expected to remain suppressed until the housing and construction sectors rebounded and consumer spending increased.

Industry Leaders

Among the top kaolin and ball clay producers in the late 2000s were BASF, who purchased Engelhard Corp. (bentonite, fuller's earth, and kaolin) in 2006 for $5 billion in a hostile takeover; Imerys Minerals LTD (ball clay and kaolin); KaMin LLC (formerly J.M. Huber Corp., kaolin); Thiele Kaolin Co. (kaolin); and Unimin Corp. (ball clay and kaolin).

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