Lack of future aggregate puts construction at risk

The Aggregate Minerals Survey 2023 (AMS2023) report that was published in August compiles data from mineral operators to assess the national supply, demand and reserves of aggregates to inform future mineral planning policy.

AMS2023 reaffirms what the industry has been saying for a number of years. Demand for aggregates is increasing, reserves are continuing to reduce and access is becoming more complicated.

However, the short-term challenges to minerals, which include rising energy costs, rising material costs and labour shortages, all prevent increased production at market selling price, and demonstrate its ability to affect other construction sectors such as cement.

The amount of minerals being processed is dependent on market demand and whether this demand can be met.

Secondary aggregates, which are not extracted from the natural environment, can ease the pressure on landbanks. Mineral planning authorities ensure a steady and adequate supply of minerals for future construction demand through these landbank reserves.

However, secondary aggregates are currently not a substitute for primary aggregates, which are derived from extraction of geologic reserves. Secondary aggregates, typically recycled or produced as a by-product, do not have the consistency, quality and volume needed for certain construction applications. As a result, primary aggregates still need to be extracted to meet short- to medium-term demand.

As well as the government's target to build 1.5m new homes by 2029, the newly created National Infrastructure and Service Transformation Authority's ten-year strategy also sets out a clear ambition for development and growth in both the housing and infrastructure sectors. This includes for instance transport, schools, hospitals and environmental developments.

The RICS Minerals Advisory Group has estimated the tonnage of minerals needed to achieve the 1.5m new homes targets.

These figures exclude transport and energy infrastructure, as well as new schools and services, needed for this level of increased housebuilding, so actual figures may be higher.

The AMS2023 outlines that, following the major decrease in aggregates sales after the 2008 financial crises, sales increased by approximately 20% between 2009 and 2023. The construction sector was beginning to bounce back, but aggregate demand will need to increase rapidly to fulfil the government's housing targets.

The sector is now facing a potential return to reducing demand following the challenging 2025 market period, as outlined above. Government needs to consider where the minerals will come from and how effectively they can be produced.

The Managed Aggregate Supply System (MASS) is the UK's national planning framework responsible for ensuring a steady and adequate supply of aggregate through monitoring and managing extraction rates. MASS has tried to ensure this supply of construction aggregates, such as sand, gravel and crushed rock, across the country despite regional imbalances in natural resources.

MASS does not assess if the system is fit for purpose, but rather replenishment rates – the rate at which sold minerals are replaced by new allocations. These have been falling for a number of years.

The MPA's 11th Annual Mineral Planning Survey Report (11AMPSR) outlined that over a ten-year average from 2014 to 2023, only 33% of crushed rock reserves and 61% of sand and gravel reserves sold have been replenished.

Overcoming this shortfall in replenishment of primary aggregate reserves either requires a reduction in demand or mineral reserves to be topped up. As the long-term strategy is not to reduce demand, new mineral reserves must be provided.

Adding to the reserve pressures is the 2042 expiry date. This deadline originates from the Town & Country Planning (Minerals) Act 1981, which set all planning permissions granted for mineral workings before 22 February 1982 to expire in February 2042. This affects sand, gravel and hard rock reserves, but it is especially relevant to crushed rock. Around 48% of permitted crushed rock reserves in England and Wales are set to expire in 2042.

If you include reserves with planning permissions that will naturally expire before 2042, then the situation looks even worse. According to the MPA, 68% of crushed rock reserves and 85% of sand and gravel reserves across England and Wales will no longer be usable.

The industry is struggling to make up this shortfall before new sites are taken into consideration. These sites are coming forward as proposals because of the need to allocate sites in local development plans before planning permission is submitted because of the way the MASS works.

11AMPSR states that since 1999, of the 141 crushed rock planning applications submitted that provide reserves, only two have been for new sites while the remainder are for extensions to existing sites. The disparity is less acute for sand and gravel planning applications, but extensions still represent most new applications.

The UK's substantial offshore geological deposits of marine sand and gravel can supplement terrestrial reserves. However, the amount of sand and gravel that can be landed depends on the availability of aggregate wharves.

Increasingly, aggregate wharves and their processing facilities face challenges from competing development, primarily residential development of neighbouring brownfield industrial land, which can conflict with 24-hour operations due to amenity issues for the housing. 

These wharves must be safeguarded from competing development through reaffirmed and enforced planning policy protections if marine sand and gravel is to maintain or increase its contribution to reserves.

The main geological processes that create reserves and cause minerals to be available are often the same processes that form the important and enhanced landscapes and ecology that require protection. This raises the question of balance between protecting the environment and the need for economic growth.

According to the MPA, in 2023 it took on average 22.6 months for a sand and gravel application to be approved and issued, and 36.6 months for crushed rock. Most of this delay is in the post-submission phase, partly due to underfunded and understaffed mineral planning departments.

National and regional guidelines for aggregate provision in England have not been updated since 2009, with the guideline on the aggregate provision required only going up to 2020. This is five years out of date. The government focus on critical minerals is welcome but it should not be at the expense of policy and strategy regarding construction aggregates.

Focus is on local development plans to calculate the regional requirement for minerals however, these tend to under-represent national need. Regions such as London and the South East depend heavily on imports from other areas of the UK, but mineral local plans, drafted by the respective mineral planning authority, struggle to properly account for this inter-regional reliance.

Each mineral planning authority uses its own approach to forecasting demand in its locality, often based on local ten-year sales averages. This makes it difficult to establish need over wider areas and across borders. The delay in aggregate need assessments in local plans means that increase in growth or housing expansion often takes a few years to be reflected.

Without strong national minerals guidance on needs, planning decisions are focusing on local interest – such as perceived noise, traffic or landscape impact – even with significant work by applicants to show that the developments have little effect and any impact is temporary, for the life of the operation.

While some mineral reliance may be offset by secondary aggregates, they cannot replace all primary aggregate uses and there will continue to be a shortfall. Of course the reuse of minerals should be encouraged, but secondary aggregates still need a sustainable supply of primary aggregate to fill the shortfall in the medium term.

There are no easy solutions to these problems, but the growing problem requires the government to focus on domestic mineral security, for general construction aggregates as has been done for critical minerals.

The government needs to acknowledge the impact minerals have in other national sectors and realise how vital they are to the UK economy. The construction sector needs continued investment in resourcing and training of planning teams in local authorities to ensure they have the knowledge, skills and capacity to carefully consider complex mineral planning applications in a timely way.

Local decision-making is generally a good idea; however, for minerals a nationally coordinated approach is also necessary. This will ensure that the demand to achieve the planned national infrastructure and housing targets is available and can be implemented in local development plans.