Vermiculite is a natural mineral that expands with the application of heat. The expansion process is called exfoliation and it is routinely accomplished in purpose-designed commercial furnaces. Vermiculite is formed by hydration of certain basaltic minerals. Large commercial vermiculite mines currently exist in South Africa, China, Brazil and several other countries.
In 2005, South Africa was the top producer of vermiculite with about 40% world share followed by the USA and China, reports the British Geological Survey.
While some exfoliators focus on only a few of the possible applications, others can provide vermiculite products for all its applications. It is common for vermiculite exfoliators to also exfoliate perlite, as both are often sold together. To set up a new exfoliation process, it is possible to find expert consultants to advise in the design and construction of the desired facilities. Vermiculite exfoliators have an international trade association called The Vermiculite Association to represent the industry's interests and to exchange information. Many of its members also maintain memberships in The Perlite Institute.
Although not all vermiculite contains asbestos, some products were made with vermiculite that contained asbestos until the early 1990s. Vermiculite mines throughout the world are now regularly tested for it and are supposed to sell products that contain no asbestos. The former vermiculite mine in Libby, Montana did have asbestos — in fact, it was found to have developed underground with and to be co-mingled with significant amounts of asbestos.
Pure vermiculite does not contain asbestos and is non-toxic, but it can become contaminated over long periods if there is a presence of a secondary mineral called diopside. After millions of years of weatherization, the biotite turns into vermiculite and the diopside turns into asbestos. This appears to have happened to the vermiculite deposit at the Libby, Montana mine, and numerous people were unknowingly exposed to the harmful dust of vermiculite that contained asbestos. Unfortunately, the mine had been operating since the 1920s, and environmental and industrial controls were virtually non-existent until the mine was purchased by the W.R. Grace Company in 1963. Yet, knowing the potential for human health risks, the mining company still continued to operate there until 1990. Consequently, many of the former miners and residents of Libby had been affected and continue to suffer health problems. Over 200 people in the town died from asbestos-related disease due to contamination from vermiculite mining from nearby Zonolite Mountain, where soil samples were found to be loaded with fibrous tremolite (known to be a very toxic form of asbestos), and countless others there who insulated their homes with Zonolite have succumbed to asbestos-related diseases, most of whom never were employed in environments where asbestos was an issue.
After a 1999 Seattle Post-Intelligencer story claimed that asbestos-related disease was common in the town, the EPA, in response to political pressure, made cleanup of the site a priority and called Libby the worst case of community-wide exposure to a toxic substance in U.S. history. The EPA has spent $120 million in Superfund money on cleanup. In October 2006, W. R. Grace Company tried to appeal the fines levied on them from the EPA, but the Supreme Court rejected the appeal. The United States government is also pursuing criminal charges against several former executives and managers of the mine for allegedly disregarding and covering up health risks to employees. They are also accused of obstructing the government's cleanup efforts and wire fraud. To date, according to the indictment, approximately 1,200 residents of the Libby area have been identified as suffering from some kind of asbestos-related abnormality. The criminal proceedings are ongoing as of July 2007.
Since the 1920s, vermiculite had been extracted from the Libby deposit under the commercial name Zonolite. The Zonolite brand was acquired by the W.R. Grace Company in 1963. Mining operations on the Libby site stopped in 1990 in response to asbestos contamination. While in operation, the Libby mine may have produced 80% of the world's supply of vermiculite. The United States government estimates that vermiculite was used in more than 35 million homes but does not recommend its removal. Nevertheless, homes or structures containing vermiculite or vermiculite insulation dating from before the mid 1990s, and especially those known to contain the "Zonolite" brand, may contain asbestos, and therefore may be a health concern.