Industrial Minerals Inside Edge - 30 November 2012

By Mike O'Driscoll
Published: Friday, 30 November 2012

Rio Tinto, Vesuvius stake out strategy; new barite and fluorspar sources emerge

Welcome to approximately 60 seconds of reading Mike O’Driscoll’s take on this week’s news highlights in the industrial minerals world.

As we hit the last month of 2012 some of the primary players in the industry are keen to get their New Year/new look messages out before the year’s end.

It’s a bit like trying to beat the Christmas shopping rush.

Meanwhile news on some interesting new source project developments are also seeing the light of day.

Rio Tinto

It is always good to hear clarification on Rio Tinto’s industrial minerals strategy, if not only because it has always been a bit of a mystery, as anyone who has tracked the group’s activities in this sector in recent years will attest.

Yesterday’s investor briefing in Sydney led by CEO Tom Albanese underlined China “to remain the key driver until the mid-2020s” for long term market demand.  And as forecast in last week’sIM Inside Edge, Albanese noted a pick-up in China’s markets in Q4 2012 as a harbinger of positive outlook for the group’s minerals portfolio.

However, the title “A clear and consistent strategy” on one of the presentation slide titles will have brought a wry smile to some industry observers.

Regarding Rio Tinto’s industrial minerals business, the group appears to have nailed its colours to the mast with its titanium dioxide pigment feedstock minerals, zircon, borates, and salt operations and exploration activity in lithium and potash...for now anyway.

It was only as recently as 2008 when Rio Tinto was trying to sell its borates and talc business to raise $1.2bn to help pay off its monster Alcan acquisition. In the end the group decided to hang on to borates, and its talc business, world leader Luzenac Group based in France, finally went to Imerys in 2011.

But then in August 2012, Rio Tinto sold its 50-year old Borax Argentina SA business (35,000 tpa borates products, $23m revenue 2011) to lithium developer Orocobre Ltd.   Yesterday, Rio Tinto forecast a near term squeeze on borates supply.

Meanwhile, Rio Tinto is reminding the market of its progressing development at the group’s Jadar lithium-borate deposit in Serbia, claimed to have the potential to supply more than 20% of global lithium demand.

Other current development strategy focuses on Rio Tinto’s potash exploration joint venture with North Atlantic Potash Inc., a subsidiary of JSC Acron. Acron is a world leader in fertiliser production and holds multiple potash exploration permits in Saskatchewan, Canada.

Hang on a minute, didn’t Rio Tinto sell a load of potash assets to Vale as the Brazilian miner looked to strengthen its position in fertiliser minerals? Yes – February 2009 saw Rio Tinto let go of its Potasio Rio Colorado potash project in Argentina and Regina exploration assets in Canada.

But now Rio Tinto seems to be wanting to get back into potash, and develop new borates and lithium sources.

Maybe it’s all a timing thing, but one could be forgiven for being a little vexed over Rio Tinto’s long term industrial minerals strategy.

Earlier this year Rio Tinto divested its speciality aluminas business, now Alteo.   Look out next for a new home for the world’s largest vermiculite producer, Palabora Mining Co. Ltd (around 200,000 tpa vermiculite), also amid Rio Tinto’s portfolio but kept in low profile within its copper division awaiting a buyer along with the Palabora copper operation.

Vesuvius

From a major industrial minerals producer to a major industrial minerals end user. Yesterday also saw UK’s Cookson Plc unveil plans and strategy for its new look Vesuvius Plc following its recently announced demerger.  After RHI, Vesuvius is the world’s second largest refractories manufacturer.

Anyone in the refractories business knows Vesuvius and its position, but until now it had been somewhat hidden on a corporate level as Cookson’s “Engineering Ceramics Division”. Does this mean it’s being groomed for sale? There are many that feel there is still a way to go for consolidation in the world refractories market.

Steel refractories and foundry materials are Vesuvius’s primary markets, representing 56% and 31% of revenue, respectively. But the emerging solar power market is contributing 2% of revenue and didn’t get much of a mention in the briefing.

Vesuvius is one of the few world producers, albeit captive, of fused silica, used to make crucibles and rollers for the photovoltaic manufacturing industry and the company has expanded operations in China and central and eastern Europe in recent years.

However, it seems the solar cell market dip in Europe has made a casualty of Vesuvius’s Polish solar crucible plant. Otherwise, the outlook in Asia Pacific would appear to be holding up.

Barite, fluorspar sources emerge

Just time to report in from the successful and most enjoyable IM Roundtable: Moving Minerals 101, held in Amsterdam this week, with its focus on mineral logistics.

Among the excellent presentations underlining just how crucial it is to get the logistics aspect of any mineral project absolutely nailed down, was news of some interesting new sources of barite and fluorspar.

Yasheya Ltd has established a new subsidiary, DrillCo, to develop the Konola barite deposit in Liberia, aiming at 50,000 tpa over the next five years as well as developing other barite sources in Safi, Morocco. All oilfield markets are being considered, but initially it looks like the Middle East oilfield markets are to be served first.

Tertiary Minerals Plc has just completed three months due diligence on a fluorspar project in Eureka, Nevada, claimed as having “world class potential”. This joins the company's other fluorspar developments at Storuman, Sweden, and Lassedalen, Norway.

Mike O’Driscoll is Global Head of Research and Consultant Editor at Industrial Minerals, previously he was Editor of IM 1995-2012.

For the latest trends and developments in oilfield mineral supply and demand don’t miss  Oilfield Minerals Outlook: Middle East, 21-23 January 2013, Dubai.