The Great Occasion

By Siobhan Lismore-Scott, Kasia Patel, Emma Hughes, Antonio Torrisi
Published: Friday, 21 March 2014

The Industrial Minerals Congress launched 40 years ago, in 1974, and was attended by over 400 delegates from 36 different countries. As we prepare for the 22nd Congress, which will be held in Vancouver this month, IM approached several industry leaders and asked each of them the same five questions to get their perspectives on how the market has changed. Siobhan Lismore-Scott, Editor



In 1974, when IM held its first Congress at the Royal Lancaster Hotel in London between 8-9 July, it was lauded as a “Great Occasion” by the publication, then in journal form, with editor Dick Fleming enthusiastically announcing in his editorial comment that there was scope for a second, and possibly more, IM Congresses in future.

“The question was whether, as Professor [Robert] Bates put it, ‘the IM Congress of 1974 will become the first of a series - or go down in a blaze of glory as a one-time operation,’” the coverage of the first Congress mused.

Over 400 people from 36 countries attended the first Congress. There were six field trips held around the UK and West Germany, which ran over two days.

The idea of the IM Congress was conceived by the then chief geologist of English China Clays (now Imerys’ operation in St Austell), Colin Bristow, who also served as one of four chairman at the event.

Fast forward 40 years and as we embark on the 22nd IM Congress, we notice that while many industry trends (though not always fashions!) have shifted and the way the industrial minerals world does business has changed, a lot of the issues facing the industry are familiar to those experienced four decades ago.

The oil crisis of 1973 and the attendant hike in prices meant that there was renewed interest in drilling, which was exemplified by the inclusion on two papers on drilling technologies. This year, a paper on drilling-grade barite (barytes) is being given, as well as several other papers on oilfield mineral demand, as the quest for new conventional oil and gas sources remains as keen as ever while hydraulic fracturing (fracking) continues to boom.

Two years of woe

More recently, there has been a sentiment shift in the market towards the need for spending discipline as rising costs have begun to bite deeper. This time two years ago, as IM delegates convened in Budapest, Hungary, most could be forgiven for thinking the industry was over the worst of the recession.

However, the last two years have been hard on the industry. Refractory usage of minerals is down, energy prices are up. Freight costs and taxes have increased in most countries, and labour costs have climbed in Australia and China. Resource nationalism has caused problems in Africa and slowing investment has seen many developers struggle to raise funds for new projects.

But what has this meant for the industry? Rather than pass comment, this year IM decided to hand over the voice of the magazine to its readers, contributors and good friends, for this issue. We asked each representative overleaf the same five questions Ñ not all of which were answered, unsurprisingly Ñ but what we got back was candid and illuminating.

Lower prices, weaker economics and adverse weather were named as the main headwinds faced by companies over the next two years, while most companies urged juniors to be ready for longer wait times on mines and stiffer competition.

Finally, we wouldn’t expect our readers to answer questions that we would refuse to broach ourselves - so with this in mind, we asked IM’s managing director, Rick Russell, the same five questions we asked of our contributors.



Richard Russell, Managing Director, Industrial Minerals



Have you modified output in response to market conditions?

All businesses have been affected by the global recession and we’re no different from anyone else. It has reinforced the need to ensure the services offered are of the highest possible quality. We understand that our customers have had to cast a critical eye over all their spending and ensuring our services remain indispensable has been our primary focus.

We have also invested in two new business lines in recent times and have added IM Data and IM Research to our portfolio. We appreciated it was a difficult time to take new services to market, but from consistently good customer feedback, we decided to take the plunge. The old maxim about launching new businesses in recessionary times applies. We need to be lean and efficient at all times. We hope to maintain this philosophy as we develop more services that will be valued by our clients when the economic shackles loosen.

Have you seen any new end markets, or an increase in interest in a specific region?

IM has developed its coverage to address the evolving nature of our markets. We have added content from China as this represents such an important market in many ways. Rising domestic consumption and export taxes have altered both the Chinese and the global supply situations for many of the minerals IM covers. We have also developed new content in areas of great interest.

The boom in shale oil and gas has created growth opportunities for minerals used in the unconventional energy market to complement conventional oil and gas extraction and the minerals used there. The growth of batteries for electric vehicles (EVs) creates opportunities for those minerals and is very exciting. The markets for other minerals remain of interest as they are used so widely in many industries. The great beauty of working with such a diverse set of minerals is that there is never a time when nothing happens. Our challenge is to report and then analyse the consequences of all these activities to a global audience.

What headwinds are you expecting to face in the next two years?

We are optimistic that the industrial mineral markets will start to improve from now on and that we’ve seen the worst of the recession. It will take time for confidence to return to a number of markets and sectors, but we hope that the financial wheels will start to turn which will help support new business growth for the future. IM will continue to follow the financial results of our customers very closely and hope that there are no major crises that will damage the fragile growth we’re noticing.

What advice would you give anyone coming into your market?

The trick when entering any new market is to ensure that what you produce is of the highest quality and is required by the end users. It is certainly more difficult getting finance and investment these days, so your business case needs to be stronger than ever. There is also greater pressure on providing an almost immediate return on any investment. The businesses that are successful will have really understood the needs of their markets intimately and will work closely with their customers to ensure they are superior in every way to their competitors.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

In our market, the quality of service offering over the last two years has needed to improve to ensure people continue to see the value it provides and that they continue to view it as indispensable. The markets are slowly improving, but it looks like it’s going to be a slow road back to full recovery. As long as the product quality remains high, the market need remains.

The foreseeable future represents more of the same in terms of investment into improvements in service that IM is confident will add further value to our coverage. If we get this right and deliver new and improved services, the future looks very positive indeed. However, the one note of caution I would sound is that the volatility and fragility of the markets in recent years mean that there is no room at all for complacency.



Andrey Ilyin, Chief Financial Officer, EuroChem



Have you modified output in response to market conditions?

Yes, slightly. While the last 12 months were somewhat challenging for the fertiliser industry, EuroChem managed to safely navigate through the weak market environment of 2013.

We had good growth on account of our Western European assets, which helped fertiliser sales volumes for nitrogen and phosphate segments, excluding sales of mining co-products, increase 8% year-on-year (y-o-y) to 10.6m tonnes.

Stronger-than-expected demand from China helped support our mining raw material sales volumes, which include iron ore and baddeleyite. As a result, sales of our phosphate rock mining co-products grew 11% y-o-y to 5.9m tonnes.

The softness in the market mainly affected overall pricing levels and, to a lesser extent, volumes, although phosphate fertiliser demand proved particularly vulnerable to India’s lack of market activity.

The Indian rupee’s devaluation, coupled with a subsidy system skewed to nitrogen, significantly cut back buying activity from the world’s largest phosphate buyer. Despite healthy soybean pricing and additional acreage in South America, India’s absence from the market resulted in lower operating rates for phosphate producers.

To illustrate, the capacity utilisation at our phosphate facilities went from an average of 90% in 2012 to 79% in 2013. Nonetheless, fertiliser demand began improving from the fourth quarter with most major markets showing healthy demand levels coming into 2014. The encouraging start to the year is likely to allow volumes to finish the year flat to up as compared to 2013.

Have you seen any new end markets, or an increase in interest in a specific region?

In 2013, our nitrogen sales showed good growth in Europe and a modest gain in Russia. Sales to Europe increased to represent 31% of the group’s nitrogen sales compared to 26% in 2012. The sales growth registered in Europe was spurred by the expansion of our distribution network and asset base in Western Europe and the diluting effects of slightly more challenging conditions in the Americas.

In 2013, our largest phosphate markets remained Asia and Europe, with 30% and 29% of total segment sales, respectively. The share of sales to Asia reflected the relative strength and importance of iron ore within the phosphate segment, while our Lifosa assets allowed us to retain a strong presence in the European phosphates market.

Overall, additional soybean and corn acreage in South America and South East Asia continued to drive market growth and helped mitigate some of the weakness attributable to India’s absence. With the need to replenish the nutrient balance in soils following more than two years of under application, there is a strong probability that India will be looking at coming back to the market as Kharif season approaches.

What headwinds are you expecting to face in the next two years?

In nitrogen, new capacity additions in countries with relatively low natural gas prices, including China, will continue to weigh on prices, making the “delivered to” cost position very important.

However, the nitrogen market is stable as farmers need a steady supply of nitrogen fertilisers to ensure good plant growth and yield. This makes demand for nitrogen fertilisers somewhat more predictable, relative to phosphate and potash, and consensus expectations currently see 2% demand growth per annum over the next few years.

Some new capacity is also expected in phosphates, although not on the same scale as in nitrogen. A key theme in phosphates is India, and demand from that region, which remains a major wildcard.

Today’s lower pricing levels (vs. Q1 2013) have partially alleviated the effects of a weaker rupee and the upcoming parliamentary elections in May are expected to help provide further visibility on the future of the country’s subsidy system.

A major threat to fertiliser demand, and ultimately prices, remains adverse weather. 2013 started off slowly as a result of lingering cold across key markets and this year looks similar. Logistics are being put to the test with record low temperatures in North America.

This winter’s record snowfalls are likely lead to challenging conditions on the waterways as spring moves in. That said, despite fertiliser market volatility and broader global imbalances, the industry continues to steadily grow, driven by a rising global population, increasing food demand and dietary shifts.

While we have limited control on external market factors, we can nevertheless ensure that we continue to drive long-term shareholder value. EuroChem is well positioned today, thanks to its deep vertical integration and competitive cost advantage, which will only be further boosted as we start mining and producing potash.

What advice would you give anyone coming into your market?

Location and input costs are key. The distance to market remains crucial to competitiveness no matter how good the assets are or how low the cost the operations are. While some products do command a premium, for most fertilisers, the costs of shipping to port, transhipment and freight to the markets and customers, make up a considerable portion of the final price.

Inland distribution capabilities are more than ever crucial for reaching customers with the right product at the right time.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

Despite continued growth in Latin America, lower demand from key markets, such as India, coupled with increasing exports from China, on account of lower feedstock prices, all applied pressure on fertiliser prices for most of 2013.

Nitrogen prices rallied significantly following the close of the Chinese export window and in the run-up to peak planting season in developed markets, prices are now at comfortable levels.

The quick revival of demand in phosphates caught some producers off-guard and drove substantial price increases in the first weeks of 2014 as logistics issues in Morocco and ill-timed maintenance at some phosphate facilities tightened supply.

As a result of the pricing appreciation we expect to see margin expansion as run rates increase at integrated producer levels, especially for MAP/DAP producers with both upstream rock and ammonia capacity, such as EuroChem.

Given its rather low inventory levels and recent market absence, we would expect to see India coming back to the market and helping mitigate the effects of the opening of the lower-tax phosphates export season in China.



Adrian Wood, Director UK, Ireland and European Distribution, Metso



Have you modified output in response to market conditions?

We are manufacturing equipment based on market activity. Recently we have increased production based on global demand.

Have you seen any new end markets, or an increase in interest in a specific region?

Metso is selling equipment in every part of the globe. At the moment, in Africa and the Far East, we see potential for growth.

What headwinds are you expecting to face in the next two years?

We expect good results with our new more productive stationary and mobile equipment. The main benefits of the new products are reliability and continuous productivity.

Additionally, in mobile equipment, the development focus has been on the environment (up to 35% lower fuel consumption) and ease of transportation. Together, these ensure the most cost competitive operation.

A great example of this development is the LT220D, which combines a mobile cone crusher and mobile screen on the same easily transportable chassis. This means, in practice, that there is only one form of transport needed, instead of the two previously used, generating significant cost savings. On top of that, customers achieve cost savings in fuel consumption and maintenance, offering the average contractor massive annual savings.

The new crushers are engineered to be 10-30% more productive in terms of capacity whilst maintaining the overall size and footprint of the previous crusher, which was roughly the same size. This provides great opportunities to replace existing crushers out on the field with new significantly more productive equipment. This allows us to help our customers improve their operations profitability.

When developing our new equipment, we have listened to our customers and used our 100 years of experience to achieve results.

In process optimisation, it is possible to achieve great benefits in certain amounts of valuable key end product fractions coming out of the process and the shape of those products. This optimisation is based on Metso’s extensive know-how of the crushing and screening processes and utilisation of automation.

What advice would you give anyone coming into your market?

Competition is always welcome, though the market is very competitive already. Customers in general have high expectations of the equipment and understanding the process.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

Metso is a high-quality manufacturer and the prices have remained consistent, despite the competitive nature of the market. The market is in an extremely volatile state so it is difficult to see the short to mid-term development.



Eila Paatela, Director, Corporate Communications, Outotec

Have you modified output in response to market conditions?

Outotec has a flexible business model and is using a global network of suppliers for the projects delivered to the customers. 90% of Outotec’s manufacturing is outsourced. However, we have reduced our own workforce in certain locations due to uncertain market conditions.

Have you seen any new end markets, or an increase in interest in a specific region?

Not very sudden changes, and we are doing business globally. In the past few years we have had many large projects in the Middle East. Last year, we won larger projects in Turkey and Russia, and the service business generally has been growing despite the slow capex market.

What headwinds are you expecting to face in the next two years?

We estimate that the capex market will continue to be slow whilst the demand for various other services is expected to grow.

What advice would you give anyone coming into your market?

Developing new sustainable technologies is a long process and requires wide expertise, comprehensive R&D facilities and close cooperation with customers, universities and research centres. The returns of new technology may come decades later.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

As Outotec is selling large tailored solutions, the price is always dependent on a number of different factors.

Competition is fierce, with fewer projects, and this naturally puts some pressure on prices. However, it is possible to capture value far into the future with industry benchmark technologies that meet the environmental standards.



Gokhan Yazici, President and CEO, Etimine USA

Have you modified output in response to market conditions?

To provide enough supply to customers, we are looking at the long term. We are increasing our capacity. We don’t want to be behind demand.

Have you seen any new end markets, or an increase in interest in a specific region?

Our company sales from Turkey have expanded to include Mexico through Central America and we are looking for sales opportunities over there. The US by itself is strong and there is growing demand for our products

What headwinds are you expecting to face in the next two years?

We don’t want any kind of recession like 2008/2009. If any kind of financial crisis happens, it will affect global demand.

The financial situation is still fragile and in Europe they haven’t fully recovered since the crisis.

What advice would you give anyone coming into your market?

I would say that quality is really important. New producers should produce a quality product.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

Prices are quite stable. I believe this will continue - I don’t think there will be any softening - the price has been more or less stable. I think it will remain the same, or we will see a slight increase.



Michael Le Page, Chief Commercial Officer, Rio Tinto Minerals



Have you modified output in response to market conditions?

We always seek to optimise our output to satisfy customer demand and to meet our contractual obligations.

Have you seen any new end markets, or an increase in interest in a specific region?

Borates are used in numerous end markets and these end uses go through a product life cycle so there are always end uses which are new or emerging and some which are ending. One newer end use is where borates are used as micro nutrients in more crops. Borates

have been used in some crops for many years and now more crops are finding that the addition of boron improves yield and product quality.

What headwinds are you expecting to face in the next two years?

Economic uncertainty is always an issue which we watch carefully and the continuing economic recovery in Europe and the US are very important. Economic growth in China has recently slowed but is still very healthy. A further slowdown in China’s economic growth has been predicted by some analysts so this could reduce the increase in demand if it occurs. Our current view is that the economic growth in China will remain relatively stable.

What advice would you give anyone coming into your market?

It is important to invest capital wisely in the business for the long term, so supply to the customers can be very reliable at a quality which is suited to the customers’ needs. A global approach can reduce the business risks, so having access to a geographically diverse range of customers and end users via a strong logistics network is important.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

Prices are a feature of supply and demand dynamics: in the past two years, demand has been variable depending on the economic growth in the regions around the world and in the various end uses; and this has impacted on prices. We do not comment on future pricing forecasts.



Leonardo Curimbaba Ferreira, General Manager, US Electrofused Minerals/Electro Abrasives LLC, Grupo Curimbaba

Have you modified output in response to market conditions?

Proppant consumption is expected to increase until 2016, due in part to technological improvements and multi-stage horizontal drilling techniques. Proppant consumption will be driven by the US, Russia, Canada, Australia, China and Latin America.

Mineracac Curimbaba and its sales and distribution centres - Sintex North America and Sintex International - have made necessary improvements to attend the market trends.

Have you seen any new end markets, or an increase in interest in a specific region?

As we have said, proppant consumption is expected to increase as several countries are developing their shale plays. This consumption will be driven by the regions previously mentioned.

What headwinds are you expecting to face in the next two years?

The supply chain is the main headwind in the proppants market; the challenge is delivering the product at reasonable costs. This problem affects the entire shale and has supply chain. The Curimbaba Group has its own foreign trade specialists that work constantly for quality delivery focused on the customers’ needs.

What advice would you give anyone coming into your market?

Anyone who wants to come into the proppant market should get ready as the market is becoming more and more competitive.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

The prices are down and competitive in the proppants market. And we expect the prices will remain flat for the next two years.



Anne Williams, Vice President, Washington Mills

Have you modified output in response to market conditions?

Washington Mills is a diversified company that sells products into a variety of markets. While some of our markets have experienced stable or growth conditions, others, such as refractories, experienced lower demand versus forecasts in 2013. In cases where we can and do see slower market conditions, we respond with lower production.

Have you seen any new end markets or an increase in interest in a specific region?

We have seen a renewed interest in bringing manufacturing back to the US. So far, we have not seen that such behaviour has had a noticeable impact on our business, but we expect that if the trend continues that we will see an increased demand for our products.

What advice would you give anyone coming into your market?

Customer forecasts can be uncertain and difficult to predict with any degree of certainty.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

We don’t comment on prices.

Felipe Smith, Commercial VP, Iodine, Lithium & Industrial Chemicals, SQM

Have you modified output in response to market conditions?

During 2013, demand for lithium chemicals increased by around 5%, reaching above 130,000 tonnes lithium carbonate equivalent (LCE). We estimate that demand will grow at a slightly higher rate during 2014, driven mainly by batteries, potentially exceeding 140,000 tonnes LCE.

At the same time, during 2013, we observed an increase in the supply of lithium compared to 2012, mainly coming from both existing and new lithium producers in China.

Our current production capacity is 48,000 tpa LCE and we can run it at different levels of production depending on market conditions. Last year we produced less than during 2012, though this year we are planning to increase our production level again.

Have you seen any new end markets, or an increase in interest in a specific region?

There is some interesting R&D going on in various different industries, but as yet we have not detected a new end market for lithium that is of any substantial relevance.

The demand for lithium in the manufacturing of cathode material continues to grow at 10-15% pa, concentrated mainly in Asia. This demand growth is still driven by lithium-ion (Li-ion) batteries for portable devices. The penetration of Li-ion batteries into the EV market is going on but at a slower pace than was expected by the industry a couple of years ago.

What headwinds are you expecting to face in the next two years?

We foresee the total lithium chemicals demand growing at healthy rates of 5-10% pa over the next two years.

Depending on the success of new lithium production projects under consideration, we could also expect an increased demand for lithium.

What advice would you give anyone coming into your market?

We have been producing lithium for almost 20 years, developing a consistent quality, in close collaboration with our customers. To have a consistent quality should be the goal for anyone coming into the market. Also, it is very important to be realistic about the balance of future demand and supply.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

Lithium prices have proven to respond quickly to the prevailing balance of supply and demand and this will remain as the key factor determining price fluctuations.



Stephen Riddle, CEO, Asbury Carbons



Have you modified output in response to market conditions?

Modifying output is an ongoing process at Asbury. With the amorphous graphite markets currently experiencing excess capacity, Asbury has had to adjust its amorphous graphite supply based on current demand.

Asbury operates as both a trader and a stocking warehouse provider by supplying all five different types of natural graphite direct from various selective partner mine sources, both within and outside of China, either directly to end use customers or by offering graphite out of existing warehouse stocks.

We have seen that, as demand for natural graphite remains flat, demand for the other types of graphite and carbon has grown; so Asbury has been adding additional capacity.

Have you seen any new end markets, or an increase in specific region?

Asbury continues to invest in assisting companies worldwide through innovation and offering sustainable solutions for new products or new end use markets, whilst at the same time continuing to strive to increase its worldwide market share. So yes, Asbury continues to see new products and markets develop for natural graphite worldwide.

The two major markets that can, and will affect demand, are still the worldwide refractory markets and the natural graphite anode market, where the natural graphite is processed and coated before being used in Li-ion batteries.

What headwinds are you expecting to face in the next two years?

Potential excess in supply is an issue that stands out. With the worldwide plan for many new junior graphite mining companies, new natural flake graphite mines outside of China and new crystalline vein graphite mines starting up, my concern is whether demand will keep growing at a rate equal to the added supply of natural flake and crystalline vein graphite.

Another consideration is that 70% of the worldwide supply comes from China and China is not a democracy, so anything could happen any day. I refer to this as the “China Factor”; if something major were to happen with the natural flake or natural amorphous graphite supply over the next two years, that would change everything.

What advice would you give anyone coming into your market?

This is a very good question. We have two different types of companies coming into the natural graphite market. The first and most publicised type is the junior public graphite mining companies and then the second type is a few privately owned junior graphite mining companies.

My advice to both types is that big is not better. Yes, being bigger reduces average production costs, but it also adds a much greater risk factor for the investor.

Operating graphite mines takes time and investors have to be in it for the long term. Most graphite mines take years to become profitable after they have been built. An investor needs to understand that a new graphite mine is not a guaranteed profitable business. Management has to work to make it profitable and this can take years of making additional investments and working out all the issues.

Selling natural graphite is not easy, especially when selling a new graphite mine’s full capacity of all the different qualities it produces. Asbury signed an exclusive sales and marketing agreement in 1988 with the original investors of the ‘Stratmin Graphite Mine’ in Lac-des-lles, Quebec, Canada and closed our smaller graphite mine ‘Graphite Asbury Quebec’.

Asbury was successful, early on, in selling the full capacity once the mine got to full capacity, but the issue at the time was that the market prices were too close to cost of production to bring a fair return to the original investors and over time the original investors sold the mine and flotation factory.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

We have seen a downward price trend in the last two years for all five types of natural graphite, and as new natural graphite mines open up and increase additional supply, the question the industry must ask itself is whether demand will grow as fast as the new additional supply.

As for the foreseeable future, prices will increase or decrease based on supply versus demand.



Haibo Mo, Deputy General Manager, Qingdao Hensen Graphite Co. Ltd

Have you modified output in response to market conditions?

The current market situation is not good and so we decreased the output of the normal products.

Have you seen any new end markets, or an increase in interest in a specific region?

In the next few years anode material in EV batteries will increase, therefore spherical graphite used in power batteries will increase accordingly.

What headwinds are you expecting to face in the next two years?

Economic upturn is slow, affected by economic depression and automobile and real estate increase slowdowns, and graphite consumption for steel companies is still low. In the meantime, many graphite users are compressing cost, which has an impact on the market price as well.

The Chinese government will strengthen management and control of the markets for the sake of protecting resources in terms of environmental protection issues, and there is still a high risk that production will stop altogether, or at the very least be limited.

Competition among Chinese graphite producers is still fierce, causing prices to keep falling and bringing chaos to market prices that have an impact on profits.

What advice would you give anyone coming into your market?

Before actually entering this market, complete research and analysis of resources and markets would need to be done in order to establish that any product would have some competitive advantage. For example, if a large flake resource was under consideration, there might be an opportunity in the market for this product, but as for small flake graphite, its price can hardly be a competitor against China.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

Certainly prices have fallen greatly over the past two years, though in the foreseeable future prices are expected to steadily increase, however the speed of the increase is not likely to be too quick.



Ricardo Campoy, Managing Director, Headwaters MB

Have you modified output in response to market conditions?

We really haven’t, other than for the fact that we normally adapt ourselves to the circumstances in the market - and by that I mean that you can only pursue the opportunities in the market that are attractive and are doable. That is quite different from the way our competitors operate because they might be very focused on project finance or equity raisings. For a good part of my career, I was a mining banker at large commercial banks and we focused on project finance. What we found was when the cycle turned, as it has, and there is no project finance, you were sitting around tending a long portfolio and waiting for the cycle to change. And all it really required was just the opportunity to shift gears and pursue the other opportunities.

Have you seen any new end markets, or an increase in interest in a specific region?

You could arguably say that there is renewed interest in rare earths, which in no small measure has been negatively affected by the downturn in the economy and the fact that you have China controlling 95% of the production output - they have what you call pricing power. But that sector is opening up. There are many new rare earths companies and they are all waiting for Molycorp and Lynas to make their projects work and demonstrate that they are profitable. Until that happens, everyone else is going to have to live under that cloud. Which is going to make it very difficult to raise the kind of capital these projects will need to develop their projects.

What headwinds are you expecting to face in the next two years?

The most significant is market sentiment. And the constraints that have been imposed on commercial banks - not only commercial banks but the traditional lenders to the mining industry. The major mining companies have as good access to the market as companies like Seimens or Ford. It is the middle-tier markets and juniors who find it more challenging.

What advice would you give anyone coming into your market?

Brace yourself for the fact that it is going to cost you infinitely more and take you longer than you ever imagined to accomplish whatever it is you are pursuing.

This is largely because the process of advancing your project and getting a permit is such a laborious and incidentally - in some countries more than others - such a political exercise. You can get your permits and there is always someone ready to sue the regulators for giving you the permit. The objective is not always to stop you, but to make it as expensive for you and to raise their own funds and profile.



Richard Knight, Business Manager, Palabora Europe Ltd

Have you modified output in response to market conditions?

Yes - aligning production with sales is a good practice and ensures we optimise the deposit and our cost base. We continue to target high grade vermiculite and ensure the entire value chain is aligned to customer needs.

Have you seen any new end markets, or an increase in interest in a specific region?

The vermiculite market is a mature market but we are seeing an increase in interest in developing markets like Africa.

What headwinds are you expecting to face in the next two years?

A possible tightening of industrial mineral regulations on end use markets could impact the business. We will defend vermiculite’s current position by further lobbying and educating through the industry associations.

What advice would you give anyone coming into your market?

Speak to experts - like Palabora Vermiculite. We have over 50 years of mining, distribution and sales experience in this industry. We can service global customers with the widest range of grades.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

Prices have now stabilised and anticipate inflationary price increases for the finer grades.



John Sisay, CEO, Sierra Rutile



Have you modified output in response to market conditions?

In November last year, Sierra Rutile reassessed its production targets for 2013, slightly decreasing its target rutile production to 120,000 tonnes of rutile (vs. 125,000 tonnes), a 4% reduction on previous guidance. Final 2013 production was 120,349 tonnes of rutile and 32,349 tonnes of ilmenite, respectively, 27% and 47% ahead of 2012 volumes (2012: 94,493 tonnes of rutile and 22,008 tonnes of ilmenite). These figures were in line with the updated guidance.

Have you seen any new end markets, or an increase in interest in a specific region?

We have not seen any new end markets as such but three years ago we made a conscious effort to leverage the high quality nature of our rutile by diversifying our sales portfolio to encompass the titanium sponge sector and this has certainly paid dividends.

In terms of regional interest, we feel that the emergence of the Chinese chloride pigment sector will be a game-changer for the industry as it develops and expands over the next few years and we intend to position ourselves to take full advantage of this.

What headwinds are you expecting to face in the next two years?

2013 was a year of headwinds brought about by high inventories and declining pricing in the pigment sector, which impacted on feedstock demand and pricing. It is refreshing that pigment inventories have normalised as we move in to Q2 2014 and we expect this to translate, firstly, to increases in pigment prices, followed closely by a firming of feedstock prices. Therefore we feel these headwinds will recede during H2 2014 and, with demand recovery coupled with expected supply constraints going forward, we expect significant tail winds in 2015 and beyond.

What advice would you give to anyone coming into your market?

Control your costs to ensure viability throughout the business cycle. This is within your control, the market is not! Many projects were brought off the shelves during 2011/12 due to the high pricing environment, but they have now been firmly put back.

Be a good corporate citizen and engage with all stake holders. This is particularly important in the mineral sands sector as many existing and potential operations are in “immature” jurisdictions from a mining perspective.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future.

Going back to 2006 when we restarted Sierra Rutile, we saw very flat pricing until 2010 brought about by legacy contracts. By the end of 2011, prices had more than doubled compared to 2010 and at the start of 2012 they doubled again. Prices continued to appreciate until mid-2012 and then gradually drifted down to the levels we see today. However these levels are still considerably higher than those seen at the end of the legacy contract “era”.

As I alluded to in an earlier question, we expect to see prices gathering momentum in H2 2014 followed by significant upticks as we move into and through 2015.

However, I think it is fair to say that we do not expect to see pricing going back to the H1 2012 levels. In fact, it is evident that these elevated levels caused temporary demand destruction for high-grade feedstocks that is only just returning now.



Kristen Randall, Marketing Manager, Haver & Tyler

Have you modified output in response to market conditions?

The most common conversation we have with our customers is in respect to service. Especially in mining and industrial minerals, the decision does not necessarily come down to price, but more importantly, we need to be able to service our customers efficiently. In response to this demand, Haver & Tyler opened three new sales and service centres in 2013: Haver & Tyler Rocky Mountains, located just outside Vancouver in Chilliwack, British Columbia; Haver & Tyler Appalachians, located just outside Atlanta in Conyers, Georgia; and Haver & Tyler Grand Canyon, located just outside Phoenix, Arizona. In addition to W.S. Tyler manufacturing facilities in St Catharines, Ontario and Edmonton, Alberta, these additional facilities now provide service capabilities in all four quadrants of North America.

Capital expenditures are also a concern among customers. Haver & Tyler has established several leasing programmes in order to not only ease the expense of capital equipment, but also to provide ongoing parts and service support.

With Haver & Tyler’s new washing technology, the Hydro-Clean, our company has also just completed our Hydro-Clean Mobile Test Plant. Mounted on a 53’ chassis, the Mobile Test Plant is available for customers to test the feasibility of washing material at their site before committing to investment in new technology. This goes far beyond traditional lab testing, as a customer can now take part in the testing process and experience first hand how the equipment can benefit their plant.

Have you seen any new end markets, or an increase in interest in a specific region?

We are seeing an increased demand in washing material with our Hydro-Clean washing technology. This is especially growing in the western states and provinces of North America where water is a concern and drought conditions are ongoing. Haver & Tyler’s Hydro-Clean uses considerably less water than traditional systems, and operates within a smaller footprint.

Mineral processing technology is gaining importance within the Haver Group. With increasing demand for mineral processing technology and the decreasing quality of mineral deposits and reserves worldwide, Haver & Boecker is responding by bundling the expertise from its various subsidiary companies - for the benefit of the customers.

The newly formed Haver Niagara GmbH, in MŸnster, Haver & Boecker Latinoamericana, Brazil, and W.S. Tyler, Canada have joined together since mid-March, 2012 under the new brand name of Haver & Tyler. The alliance replaces the name of the Haver Screening Group.

The product range of Haver & Tyler accommodates the processes of the mining, industrial minerals and aggregates sectors. At the start of the chain we have mineral processing and washing of materials. While the good materials can be processed directly, the fine share, for example, can be made marketable by the pelletising process. Decades of experience combined with the latest research results that come from the cooperation between Haver Engineering in Mei§en and the Technical University Bergakademie Freiberg provide customers with the latest technologies and best results.

The screening, washing and pelletising technologies are also used in the coal, ore, diamond, gems and gold industries. They are also right at home in the sand, gravel, natural stone and recycling industries. Other areas of application include the cement, lime and gypsum industries.

What headwinds are you expecting to face in the next two years?

More and more each day we see customers are doing more with less. They are constantly looking to improve efficiencies and profitability. Haver & Tyler works closely with our customers to develop the programmes and services required to help them stay competitive and profitable in their markets. We expect this trend to continue and will continue to work as a partner with customers to help them solve their everyday challenges.

How have prices in your markets been affected over the last two years, and where do you see them going in the foreseeable future?

Prices dropped in the last quarter of 2013 and we are still affected by the crisis of 2009. We see that producers in our markets are proceeding with caution. We would expect prices to be on the rise again, but at a conservative pace.

What advice would you give anyone coming into your market?

While Haver & Tyler prides itself on being a technology company, the trust and relationships we build with our customers are the most important key to success. In this industry you must absolutely understand your customers’ requirements and daily headaches in order to be a valuable partner to them and to help them be successful.