British Geological Survey: wars main driver to changes in minerals supply and demand

By Nilima Choudhury
Published: Friday, 02 May 2014

A new BGS report offers businesses and policymakers information on where to find the minerals needed to guarantee economic growth of their markets and countries in order to ensure commercial growth and mitigate supply risk to maintain mineral independence.

Wars have both helped as well as hindered the development of the industrial minerals sector, finds the British Geological Survey’s (BGS) latest world mineral production data report.

Celebrating 100 years of its annual publication, the BGS says the First World War emphasised the importance of collecting mineral production data.

The BGS is driven by mineral supply security concerns, said Andrew Bloodworth, director of science minerals and waste, BGS, at an event at the Geological Society in London on Wednesday.

He said “mineral intelligence” in a “resource constrained world” was paramount to “improve the understanding of the resource consequences of our consumption”.

World War One interrupted supplies of key minerals from overseas, such as manganese, tungsten and phosphates leading to the urgent search for resources in the UK and the British Empire.

However, the Second World War resulted in no data being published for eight years, between 1939 and 1947, as well as creating complications as a result of changing territories.

The introductory note to the 1948 edition highlighted some of the difficulties in acquiring meaningful data. It said: “Some of the trade statistics for European countries are, however, not strictly comparable owing to the ‘annexation’ of certain territories by Germany.”

It also said: “Trade statistics for Japan as published in the official returns do not include trade between that country and the rest of the Japanese Empire,” which at that time, included most of the countries in South East Asia.

The idea of countries becoming mineral independent gained popularity during the Cold War between 1947 and 1991, as the US and Soviet Union looked to source commodities locally, and where that was not possible, from allies.

Supply and demand

Over the last 100 years, the minerals included in and removed from the BGS report mirrors, not only geopolitical issues, but also technological advancements.

The production of commodities such as antimony, cobalt and lithium, which are essential to a range of green technologies have grown rapidly in the last 30 years and were added to the publication in 1925.

Speaking to IM, Bloodworth said understanding where resources are, in what quantities they are produced, and where they are supplied is important in order to assess the long term supply of minerals for end-markets.

“It’s important from a sort of resource security perspective that we know and understand the risks of supply of certain minerals from certain places,” said Bloodworth.

For example, China’s dominant position in the rare earths market has raised concerns within the international community.

Last month, the World Trade Organization ruled against China’s rare earths export restrictions, which China said were in place to protect its natural resources and the environment.

China was the leading producer of 14 of the commodities in 1995 and by 2012, it was the leading producer of 44 commodities in addition to being a top three producer of a further 12 commodities.

China produces more than 90% of global rare earths production, or 95,000 tpa, and it also has a near monopoly on the technology for their extraction and refining.

This verdict was welcomed by the US, EU and Japan, which complained about China’s rare earths exports restrictions in 2012, following a surge in the mineral’s prices as a result of the Chinese quotas.

However, Bloodworth does not believe China’s monopoly over rare earths will change, but “if they become reluctant to export then obviously that has implications for other countries.”

“I think inevitably patterns of supply change. [In terms of] threats to supply – I think physical depletion is the least of our worries. We’re not going to literally run out of many things,” Bloodworth told IM.

Top minerals

Alumina and bauxite: Since 1962, the distribution of world production has changed, where Jamaica had the largest market share, whereas in 2012, Australian bauxite made up 31% of the sector.

Global production remained at 248m tonnes between 2011 and 2012, having increased from 227m in 2010. On the other hand, between 2008 and 2012, alumina has seen a steady rise in production from 82.8m tonnes in 2008 to 95.6m in 2012, respectively.

Chromite: The BGS said that the leading producer of chromite in 2012 was South Africa with 11.3m tonnes, followed by Kazakhstan with 5.2m tonnes, and in third place India with just over 3m tonnes.

Fluorspar: China is the leading producer of the mineral, holding 62% of the market, followed by Mexico with 17% and Mongolia with 6%.

Production of fluorspar has grown since the 1920s, with a huge spike just after 1970, as a result of the wide-spread commercial application of chlorofluorocarbons.

Graphite: Used in refractory and foundry applications, most types of batteries, lubricants in industrial processes and automotive parts, China is one of the leading producers holding 86% of the total world market share.

In 2012, the world total reached 2.1m tonnes, which fell from 2.4m tonnes in 2008.

Lithium: Growth has dramatically increased since the 2000s, as a result of the growing green technology market, having been steadily produced between the 1950s and 1990s.

Phosphate: Despite supplies of minerals like phosphate, along with manganese, tungsten and petroleum, being interrupted during the First World War, production picked up just after the Second World War.

In 1962, the US was the dominant producer, which moved to China by 2012, producing 95.3m in that year. The US is currently producing around 29.2m.

Zircon: Australia is currently the largest producer of the mineral with 605,000 tonnes in 2012, although this is a 20% decrease from the previous year when the country produced 762,000 tonnes.

World Mineral Production is an annual publication based on data held in a comprehensive database maintained by the BGS and provided by official bodies in individual countries. To find out more click here