transformational market growth amongst the ‘critical …€¦ · november 2015 . an assessment of...

An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’ John P. Sykes123 Joshua P. Wright4 Allan Trench567 Paul Miller8 1. Centre for Exploration Targeting, Department of Mineral and Energy Economics, Curtin Graduate School of Business, Perth, Australia 2. Centre for Exploration Targeting, School of Earth and Environment, The University of Western Australia, Perth, Australia. 3. Greenfields Research, Harrogate, UK. Email: [email protected] 4. Rowton Consolidated, Chester, UK. Email: [email protected] 5. Centre for Exploration Targeting, School of Earth and Environment, The University of Western Australia, Perth, Australia 6. Department of Mineral and Energy Economics, Curtin Graduate School of Business, Perth, Australia 7. CRU Group, London, UK. Email: [email protected] 8. Sulphide Resource Processing, Perth, Australia. Email: [email protected]

AusIMM Third International Future Mining Conference Sydney, Australia: 4th November 2015

An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’

Key questions • What is a critical metal and what are the common solutions for resolving

‘criticality’?

• Is growing the market instead a plausible way to reduce ‘criticality’?

• Has such transformational metal market growth occurred before?

• What causes this transformational metals market growth?

• Do any ‘critical metals’ have the potential for such growth?

• What are the implications for governments, consumers and suppliers involved in the critical metals markets?

4th Nov 2015 AusIMM Third International Future Mining Conference Slide 2 of 21


‘Critical metals’ have important uses but are exposed to supply risks

4th Nov 2015 AusIMM Third International Future Mining Conference

Source: USDOE (2011)

Transportation

Communications

Electronics Batteries

Military

Renewables

Slide 3 of 21


The common solution to ‘criticality’ is to “Reduce, Reuse and Recycle”


Source: USDOE (2011)

Geopolitics

Environment

Shortage

Sustainability

Slide 4 of 21


But their markets are often small and thus they may outgrow their ‘criticality’

1

10

100

1,000

10,000

100,000

Cop

per

Gol

dA

lum

nium Zinc

Man

gane

seN

icke

lC

hrom

ium

Silic

on (m

etal

)Si

lver

Lead

PGM

sTi

nM

olyb

denu

mU

rani

umM

agne

sium

Tung

sten

Cob

alt

Lith

ium

Bor

on (B

orat

e)R

EMs

Vana

dium

Tita

nium

(MS)

Ant

imon

yB

ariu

m (B

arite

)N

iobi

umIn

dium

Ger

man

ium

Tant

alum

Thor

ium

Gal

lium

Stro

ntiu

mB

ism

uth

Rhe

nium

Ber

ylliu

mM

ercu

ryC

adm

ium

Ars

enic

Tellu

rium

Metals market by size (US$ 2013 millions)


Source: Sykes et al., (2015, in press); USGS (2014)

Slide 5 of 21


However critical metals market growth has been limited in the last decade

Critical Metal

2004-13 Market Growth

Lithium 388%

Antimony 211%

Chromium 144%

Rare earths 93%

Vanadium 24%

Cobalt -5%

Strontium -57%


0100200300400500600700

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Growth of metal market groups 2004-13 (US$ billions)

Industrial Non-Ferrous Precious Critical


Slide 6 of 21


But aluminium is an example of previous transformational growth

05,00010,00015,00020,00025,00030,00035,000

050

100150200250300

1900

1903

1906

1909

1912

1915

1918

1921

1924

1927

1930

1933

1936

1939

1942

1945

1948

1951

1954

1957

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

Growth in aluminium and copper markets and prices in 2013 US$ Cu Market Size ($B) Al Market Size ($B) Cu Price ($/t) Al Price ($/t)



Slide 7 of 21


Nickel and uranium are other good examples of rapid market growth

050

100150200250300

1900

1906

1912

1918

1924

1930

1936

1942

1948

1954

1960

1966

1972

1978

1984

1990

1996

2002

2008

Growth in market size indices of copper and nickel (1900 = 1)

Cu Index Ni Index


0

5

10

15

20

25

1950

1954

1958

1962

1966

1970

1974

1978

1982

1986

1990

1994

1998

2002

2006

2010

Growth in market size indices of copper and uranium (1950 = 1)

Cu Index U Index


Slide 8 of 21


Aluminium benefitted from each of discovery, supply and demand factors


Images: sandatlas.org; earlham.edu; tempraturedetectors.com & shutterstock

ABUNDANCE

CONCENTRATION

8.2%

Factors in place prior to 20th century

MINING

PROCESSING

DEMAND

Solved in late 19th & early 20th century

Source: Sykes et al., 2015, in press

Slide 9 of 21


Nickel and uranium also saw key discovery, supply and demand changes


Images: Canadian Mining Review (nickel smelting) & shutterstock Source: Sykes et al., (2015, in press)

Slide 10 of 21


Some ‘critical metals’ are too rare and some too difficult to find Ab

unda

nce

in th

e cr

ust >

Hig

h (>

100p

pm)

Aluminium, Barium, Chromium, Magnesium, Manganese, Silicon, Strontium, Titanium,

Vanadium n/a

n/a

(theoretically the most amenable to discovery)

Med

ium

(1-

100p

pm)

Beryllium, Boron, Cerium (REM), Dysprosium (REM), Erbium (REM), Europium (REM),

Gadolinium (REM), Lanthanum (REM), Lithium, Neodymium (REM), Niobium, Praseodymium (REM), Samarium (REM), Scandium (REM), Thorium, Tungsten, Ytterbium (REM), Yttrium

(REM)

Cobalt, Copper, Gallium, Germanium, Nickel, Tin, Zinc Arsenic, Lead

Low

(<

1ppm

) Holmium (REM), Lutetium (REM), Tantalum, Terbium (REM), Thulium (REM)

(theoretically the least

amenable to discovery)

n/a

Antimony, Bismuth, Cadmium, Gold, Indium, Iridium (PGM), Mercury, Molybdenum, Osmium

(PGM), Palladium (PGM), Platinum (PGM), Rhenium, Rhodium (PGM), Ruthenium (PGM),

Silver, Tellurium

Lithophile Chalcophile / siderophile and lithophile Chalcophile / siderophile

Ability to concentrate in the crust >


Source: Sykes et al., (2015, in press)

Slide 11 of 21


Some ‘critical metals’ are too difficult to mine and/or process

Min

ing

cons

trai

nts

>

(Mining constrained) n/a

Extraction (mining and processing) constrained:

Dysprosium (REM), Erbium (REM), Holmium (REM), Lutetium (REM), Tantalum, Terbium

(REM), Thorium, Thulium (REM), Tin, Ytterbium (REM), Yttrium (REM)

Boron (Borate) Gold, Lithium, Magnesium, Mercury, Nickel, Silicon (metal), Tungsten

Arsenic, Beryllium, Bismuth, Cerium (REM), Cobalt, Europium (REM), Gadolinium (REM),

Iridium (PGM), Lanthanum (REM), Lead, Manganese, Neodymium (REM), Osmium (PGM),

Palladium (PGM), Platinum (PGM), Praseodymium (REM), Rhodium (PGM),

Ruthenium (PGM), Samarium (REM), Titanium, Zinc

Not extraction constrained:

Antimony, Barium (Barite), Copper, Niobium n/a

Processing constrained:

Cadmium, Gallium, Germanium, Indium, Rhenium, Scandium (REM), Silver, Tellurium, Vanadium

Processing constraints >



Slide 12 of 21


Some ‘critical metals’ lack important or sufficiently varied uses C

ritic

ality

of u

se >

Critically demanded metal:

Dysprosium (REM), Erbium (REM), Europium (REM), Gadolinium (REM), Gallium, Holmium (REM), Lutetium (REM), Neodymium (REM),

Palladium (PGM), Praseodymium (REM), Rhodium (PGM), Samarium (REM), Terbium (REM), Thulium

(REM), Ytterbium (REM)

Cobalt, Germanium, Indium, Iridium (PGM), Lanthanum (REM), Lithium, Osmium (PGM),

Platinum (PGM), Ruthenium (PGM), Scandium (REM), Tellurium, Yttrium (REM)

Metal with critical and diverse demand:

Cerium (REM)

Barium (Barite), Chromium, Molybdenum, Niobium, Rhenium, Strontium

Antimony, Arsenic, Bismuth, Boron (Borate), Magnesium, Mercury, Silicon (metal), Tantalum,

Thorium, Tungsten Beryllium, Silver

Metal with limited demand:

Cadmium, Lead

Gold, Nickel, Tin, Titanium, Vanadium, Zinc

Broadly demanded metal:

Aluminium, Copper

Breadth of use >



Slide 13 of 21


Some ‘critical metals’ have the potential for transformational market growth

Rank Metal Score 1 Antimony 4

n/a Copper 4

n/a Aluminium 3.5

2 Barium (Barite) 3.5

- Germanium 3.5

- Indium 3.5

n/a Silver 3.5

- Tellurium 3.5

- - -

6 Dysprosium (REM) 1.5

- Erbium (REM) 1.5

- Ytterbium (REM) 1.5

- Thorium 1.5

n/a Tin 1

7 Holmium (REM) 1

- Lutetium (REM) 1

- Terbium (REM) 1

- Thulium (REM) 1

- Tantalum 1



Slide 14 of 21


But only a few critical metals can have a major impact on the wider economy


Ba B

Cr Co Ga Li

Mg

Ce Sc

Si

Sr La V

Sb Ge

In

Te

As Hg Mo Nb

Ir

Os

Pt

Ru

Be Bi

Pd

Rh

Re

W

Mn

Nd Y

Cd Eu Gd Pr Sm Dy Er

Yb Th Ho Lu

Tb Tm Ta

1

10

100

0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

Pote

ntia

l eco

nom

ic im

pact

of

tran

sfor

mat

iona

l mar

ket g

row

th >

Potential for transformational market growth >

Potential for transformational market growth versus the potential economic impact of transformational market growth

High Potential High Impact

Low Potential Limited Impact

Low Potential High Impact

High Potential Low Impact


Slide 15 of 21


In Summary • ‘Critical metals’ have important uses but are exposed to supply risks, for

which the common solution is to “Reduce, Reuse and Recycle”;

• But their markets are often small and thus they may outgrow their ‘criticality’;

• Despite this ‘critical metals’ market growth has been limited in the last decade;

• However, aluminium, nickel and uranium are all examples of transformational market growth at various points in their history;

• Each of these metals benefitted from key mineral discoveries, and supply and demand breakthroughs to instigate transformational market growth.



The Implications • For transformational market growth to occur amongst a critical metal it likely will be:

– Discoverable: Abundant in the crust & concentrate into discrete deposits;

– Extractable: Simple to mine and to process;

– Useable: Important and broad economic uses;

• All these factors need to be in place for transformational growth to occur;

• Most ‘critical metals’ are discovery and/or supply and/or demand constrained;

• But some critical metals may be nearer economically significant transformational market growth, than others (Si, Mg, Ba, B, Ga, Co, Sc, Sr, Li, Ce, Cr, V, La)

• For these ‘critical metals’ efforts to reduce ‘criticality’ may be better focused on growing the supply and market size, rather than trying to reduce demand exposure.



Upcoming publications • Sykes, J.P., Wright, J.P., & Trench, A., (2015), Discovery,

Supply and Demand: From Metals of Antiquity to Critical Metals, Applied Earth Science (TIMM B), in press

• Sykes, J.P., Wright, J.P., Trench, A., & Miller, P., (2015), An assessment of the potential for transformational market growth amongst the critical metals, Applied Earth Science (TIMM B), in press



Thank you

AusIMM Third International Future Mining Conference 4th Nov 2015

Contact information:

John P. Sykes: [email protected] Joshua Wright: [email protected] Allan Trench: [email protected] Paul Miller: [email protected]

Slide 19 of 21

mailto:[email protected]




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