Assessment of Potential for Transformational Market Growth amongst the Critical Metals - Sykes et al...
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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
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
‘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
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
The common solution to ‘criticality’ is
to “Reduce, Reuse and Recycle”
4th Nov 2015 AusIMM Third International Future Mining Conference
Source: USDOE (2011)
Geopolitics
Environment
Shortage
Sustainability
Slide 4 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
But their markets are often small and
thus they may outgrow their ‘criticality’
1
10
100
1,000
10,000
100,000
Co
pp
er
Go
ld
Alu
mn
ium
Zin
c
Ma
ng
an
es
e
Nic
ke
l
Ch
rom
ium
Silic
on
(m
eta
l)
Silv
er
Lead
PG
Ms
Tin
Mo
lyb
den
um
Ura
niu
m
Ma
gn
esiu
m
Tu
ng
ste
n
Co
ba
lt
Lit
hiu
m
Bo
ron
(B
ora
te)
RE
Ms
Van
ad
ium
Tit
an
ium
(M
S)
An
tim
on
y
Bari
um
(B
ari
te)
Nio
biu
m
Ind
ium
Germ
an
ium
Tan
talu
m
Th
ori
um
Gall
ium
Str
on
tiu
m
Bis
mu
th
Rh
en
ium
Bery
lliu
m
Me
rcu
ry
Cad
miu
m
Ars
en
ic
Tellu
riu
m
Metals market by size (US$ 2013 millions)
4th Nov 2015 AusIMM Third International Future Mining Conference
Source: Sykes et al., (2015, in press); USGS (2014)
Slide 5 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
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%
4th Nov 2015 AusIMM Third International Future Mining Conference
0
100
200
300
400
500
600
700
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Growth of metal market groups 2004-13 (US$ billions)
Industrial Non-Ferrous Precious Critical
Source: Sykes et al., (2015, in press); USGS (2014)
Slide 6 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
But aluminium is an example of
previous transformational growth
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
50
100
150
200
250
300
190
0
190
3
190
6
190
9
191
2
191
5
191
8
192
1
192
4
192
7
193
0
193
3
193
6
193
9
194
2
194
5
194
8
195
1
195
4
195
7
196
0
196
3
196
6
196
9
197
2
197
5
197
8
198
1
198
4
198
7
199
0
199
3
199
6
199
9
200
2
200
5
200
8
201
1
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)
4th Nov 2015 AusIMM Third International Future Mining Conference
Source: Sykes et al., (2015, in press); USGS (2014)
Slide 7 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
Nickel and uranium are other good
examples of rapid market growth
0
50
100
150
200
250
300
190
0
190
6
191
2
191
8
192
4
193
0
193
6
194
2
194
8
195
4
196
0
196
6
197
2
197
8
198
4
199
0
199
6
200
2
200
8
Growth in market size indices of copper and nickel (1900 = 1)
Cu Index Ni Index
4th Nov 2015 AusIMM Third International Future Mining Conference
0
5
10
15
20
25
195
0
195
4
195
8
196
2
196
6
197
0
197
4
197
8
198
2
198
6
199
0
199
4
199
8
200
2
200
6
201
0
Growth in market size indices of copper and uranium (1950 = 1)
Cu Index U Index
Source: Sykes et al., (2015, in press); USGS (2014)
Slide 8 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
Aluminium benefitted from each of
discovery, supply and demand factors
4th Nov 2015 AusIMM Third International Future Mining Conference
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
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
Nickel and uranium also saw key
discovery, supply and demand changes
4th Nov 2015 AusIMM Third International Future Mining Conference
Images: Canadian Mining Review (nickel smelting) & shutterstock Source: Sykes et al., (2015, in press)
Slide 10 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
Some ‘critical metals’ are too rare and
some too difficult to find A
bu
nd
an
ce i
n t
he c
rust
> H
igh
(>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
Lo
w
(<1p
pm
) 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 >
4th Nov 2015 AusIMM Third International Future Mining Conference
Source: Sykes et al., (2015, in press)
Slide 11 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
Some ‘critical metals’ are too difficult to
mine and/or process
Min
ing
co
nstr
ain
ts >
(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 >
4th Nov 2015 AusIMM Third International Future Mining Conference
Source: Sykes et al., (2015, in press)
Slide 12 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
Some ‘critical metals’ lack important or
sufficiently varied uses
Cri
ticality
of
use >
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 >
4th Nov 2015 AusIMM Third International Future Mining Conference
Source: Sykes et al., (2015, in press)
Slide 13 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
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
4th Nov 2015 AusIMM Third International Future Mining Conference
Source: Sykes et al., (2015, in press)
Slide 14 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
But only a few critical metals can have a
major impact on the wider economy
4th Nov 2015 AusIMM Third International Future Mining Conference
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
Po
ten
tia
l e
co
no
mic
im
pa
ct
of
tran
sfo
rma
tio
nal m
ark
et
gro
wth
>
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
Source: Sykes et al., (2015, in press)
Slide 15 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
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.
4th Nov 2015 AusIMM Third International Future Mining Conference Slide 16 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
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.
4th Nov 2015 AusIMM Third International Future Mining Conference Slide 17 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
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
4th Nov 2015 AusIMM Third International Future Mining Conference Slide 18 of 21
An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’
Thank you
AusIMM Third International Future Mining Conference 4th Nov 2015
Contact information:
John P. Sykes:
Joshua Wright:
Allan Trench:
Paul Miller:
Slide 19 of 21