This year’s Industrial Minerals Congress, its
23rd year running, was once again well attended despite the
current market downturn.
Delegates travelled to Prague in the Czech Republic to drum
up new business and listen to presentations from an array of
speakers including producers, consultants and processing
companies.
Much of the conversation circling IM23 centred on the need
for innovation no matter the industry, as well as the necessity
to reflect on and re-evaluate current production processes in
the downcycle. Speakers focused predominantly on cost and
energy savings, as well as technology that is able to "do more
with less" particularly as mineral grades decline and prices
remain weak.
In positive news overall, however, the ever-expanding
proportion of the global population categorised as "middle
class" will ensure strong demand for industrial minerals over
the coming decades.
Speaking at the Congress, Steven Fortier, director of the
National Mineral Information Centre of the US Geological Survey
(USGS), told delegates that increased consumption driven by the
growth of this population segment would ensure sustained
mineral demand.
"Movement into the middle class requires more material for
everyone," he said, predicting a net increase in the
demographic of 3m by 2030.
Growth will be driven by Asia Pacific, where the middle
class is expected to increase by a factor of six during the
same time period.
The Middle East and North Africa (MENA) region, meanwhile,
will likely double from a relatively small base level. Europe
and North America, conversely, will remain relatively flat in
terms of absolute numbers.
Fortier noted with concern the concentration of the
production of some minerals in a limited number of countries,
notably China, which dominates a number of industrial minerals
markets including phosphate, with 45% of 66.3m tonnes produced
in 2014; graphite, with 66% of 1.19m tonnes produced in 2014;
and rare earths, with a 55% share of 123,000 tonnes produced in
2014.
"It’s nothing against China politically, but it
has a very large domestic population and demand of its own
(…) and assuming we’ll be able to get
resources from there [indefinitely] is a little risky," he
said.
Fortier also emphasised that it is difficult to predict the
future when it comes to industrial minerals markets.
Citing the rapid increase in demand for silica (frac) sand
in recent years and latterly its drop off, he noted that market
movements have a tendency to catch people off guard.
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This year’s IM Congress
was held in Prague, Czech Republic, where
industrial
minerals output is stabilising. (Source: Jorge
Royan)
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Logistics opportunities
However, the downturn of the oil and gas industry due to
falling prices has opened up opportunities for the shipping
industry to expand into other industrial minerals.
"The fact that oil and gas prices have gone down, it is seen
as an opportunity for Oman," Erwin Mortelmans, commercial
director of the port of Duqm, told delegates.
Up to 80% of Oman’s exports are oil and gas,
and the middle-eastern country has ambitions to open up dry
bulk shipping. Oman’s energy ministry has also
urged the country to move away from its main energy industry,
said Mortelmans.
With an increasing number of European countries moving away
from oil and gas-powered energy production, renewables are
expected to rise over the coming years, which would lift the
related industrial minerals used in the sector.
Due to the economic crisis and the drop in shipping volume
over the past years, there is an overcapacity of shipping
vessels and freight rates have fallen as a result.
"The oversupply of shipping vessels will be a favour to the
shippers, there is lots of opportunities to move material
around," said Wilfred Knegt from shipping agency LBH
Netherlands.
Meanwhile, European fertiliser producers are expanding into
warehousing in order to hold stock for quick delivery when
agrimineral prices rise, a shipping source told
IM on the sidelines of the event.
"Producers are taking a position in warehouses to keep
stock. In order to keep up high production rates, they are
going to need more storage space," a source from one
Europe-based shipping company said.
"There is huge growth in storage, especially in fertiliser,"
he added.
Cutting dependence on China
Europe is attempting to cut its dependence on Chinese rare
earths supply by finding ways to replace the material in the
end-user chain and through new mine development, delegates
heard during IM23.
China is the world’s biggest producer of rare
earth minerals and has an annual output of 150,000 tonnes.
Beijing has imposed policies to safeguard production methods
and limit the export of this strategically important
mineral.
European and Japanese consumers are trying to engineer rare
earths out of their products by changing from technologies such
as magnetic drive in hybrid electric vehicles (EV) to the
induction motor, said Damien Krebs, metallurgy manager of
Greenland Minerals and Energy, which is developing a 20,000 tpa
mine in Greenland.
There are two large rare earth deposits in Greenland,
Kvanefjeld and Kringlerne. The Kvanefjeld site contains the
largest rare earth deposit in the western world and the project
has received €9m ($10.1m*) in funding from the EU from
over the past five years.
If production is successful, Greenland would be the biggest
producer outside China, with the potential to meet 20% of
global demand, which would diversify rare earth supply in
Europe.
Greenland rare earth prices would also compete with Chinese
material, with pre-taxed cost estimated at $8.22/kg, compared
to Chinese producers Longnan at $30.88/kg, Xunwu at $19.50/kg
and MYRE at $27.63/kg.
However, Europe faces the challenge of isolating individual
rare earth material as the production technique is a
closely-guarded industry secret in China, said Thymis
Balomenos, metallurgical engineer at the European rare earth
research organisation EURARE.
The process to separate rare earth material is
labour-intensive, and while EURARE is attempting to optimise
the process through research, Europe does not have the capacity
for large scale rare earth production.
With most European high-tech companies moving their
production to Asia, which is closer to the rare earth supply
source, many are also questioning the need to produce the
material in Europe.
Czech mineral industry stabilising
With the Congress held in Prague this year, delegates heard
that production of a number of significant industrial minerals
has stabilised in the Czech Republic including kaolin,
bentonite and feldspar output.
According to Pavel Kavina, director of raw material policy
at the Ministry of Industry and Trade, industrial minerals in
the Czech Republic account for 16.7% of the
country’s total mineral reserve base and make up
13.7% of the country’s mining sector.
"The Czech Republic has a long history of mining, mainly
gold and silver, but also industries like Czech glass and
porcelain are well-known and built on the resources of
industrial minerals," Kavina outlined.
The country was also a past producer of graphite, although
mining halted in 2008 as producers were pushed out of the
market by competition from Chinese producers and low prices.
Now, however, Kavina said the Czech Republic was looking at
re-starting production as the market improves and graphite has
achieved critical mineral status.
The stabilisation of mineral output is positive news for the
prosperity of the country, according to Kavina who also noted
that that environmentally-friendly and sustainable mining
methods in addition to comprehensive use of all raw materials
and subsequent reclamation minimise the environmental impact of
the Czech Republic’s mining industry and secure
its future.
"Most of the industrial minerals cannot be recycled nor
substituted. Only several products are recyclable such as glass
and ceramic fragments. Production of prospective and
traditional industry minerals should be supported," Kavina
added.
While the largest slice of the Czech Republic’s
mineral resources are mineral fuels, the country is an
important producer and exporter of kaolin, producing 3-3.5m
tpa, accounting for 5% of world total crude kaolin production
and 3% of global beneficiated production.
Bentonite production has also remained stable at
200,000-250,000 tpa for use as a binding agent, filler and
sealant in addition to consumption by the refractory and
building industries. However, general clay production decreased
to around 450,000-500,000 tpa, Kavina said.
Production of feldspar and silica sand has stabilised
meanwhile at 400,000-450,000 tonnes and 1.3m tonnes
respectively. Other important resources include carbornates,
with the Czech Republic producing 4.5m tonnes high purity
limestone and 5-6m tonnes other carbonates and dolomite and
diatomite, which was produced at a rate of 30,000-40,000
tonnes.
Although the country hosts 14.2m tonnes of geological
reserves and 1.1m tonnes exploitable resources of graphite, no
graphite has been produced for the last seven years, instead
5,000 tonnes have been imported. While Kavina described Czech
graphite reserves as limited, he said that there were
"promising resources".
Zeolite looks to new markets
Niche minerals were also discussed at the Congress, and
speakers noted that finding new end markets is growing in
importance to the zeolite industry as producers look to expand
the usage of the minerals.
Dan Eyde, president of the largest US producer, St Cloud
Mining, cited a variety of potential market opportunities for
natural zeolites, including lightweight cements for oil and
gas; high strength cements and concrete for building materials;
speciality sorbents, exchangers and catalysts; municipal water
treatment; and effluent treatment.
The current applications for the mineral grouping –
produced mainly in China – are animal feed, water
treatment and radioactive waste treatment.
But now producers must look to new uses to drive growth in
the zeolite market.
"Like in other industrial minerals, to get a spot in the
market you have to kick somebody out, either by having a
performance edge or through pricing," said Eyde, noting that
with price cuts not a viable option, the goal must always be
outperforming the competition through innovation.
Borates to remain steady
While there are some bright spots in the 3.8m tonne borate
market, there is no expectation of a significant expansion in
demand in the coming years, Bayram Ankarali, General
Manager of Etimine SA, the European subsidiary of Turkish
borates giant Eti Maden, told Congress participants.
"If there are no innovations at the moment, we are not
expecting a boom," Ankarali said.
He said he expects some increase in borate demand in the
Americas, fuelled by agricultural usage as a micronutrient in
Latin America, while he noted that Africa represents a "good
chance" for some market growth.
The oilfield industry is another area that holds promise,
according to Ankarali. Use of borates in fracking could see
some uptick as the market improves, notably in the US where the
practise is widespread.
In Europe, however, fracking restrictions mean that this
potential end market remains nascent.
Conversely, the slowdown in China, which has for the past
decade been a strong market for borates, is taking its toll.
Asia still remains the largest consuming region for borates,
however, a position it has grown to hold since the turn of the
century, today accounting for 59% of geographic demand.