Bauxite and alumina
A round-up of the year’s main events in the
global bauxite and alumina markets.
The past 12 months were eventful for the global bauxite and
alumina industries, characterised by supply shortages and
Tight supplies of Chinese bauxite and alumina contributed to
price volatility in both markets throughout 2018 and
availability showed no sign of loosening towards the end of the
The supply squeeze was partly attributed to temporary
closures at Chinese mines and processing plants in the main
bauxite and alumina production hubs of Shanxi and Henan
provinces in April and a further round of closures in August
Calcined bauxite and fused alumina output were particularly
affected by the closures in China, with more restrictions on
heavy industrial activity expected through the winter
However, demand for bauxite and alumina on the global stage
was subdued, with buyers taking a relaxed attitude to supply
issues due to already having large inventories.
Speaking at Fastmarkets MB’s Bauxite and
Alumina Conference in Jamaica in March, Norwegian miner Norsk
Hydro said that Chinese imports of bauxite could double to
130-150 million tonnes per year (tpy) in the next decade.
But at Fastmarkets’ IM24 Congress in Barcelona
in June, industry participants highlighted the reliability of
Chinese bauxite and alumina supplies as one of the most
pressing concerns facing the industry in 2018 –
especially if Chinese domestic consumption increases as
Much of the anticipated increase in Chinese demand will be
for metallurgical bauxite and alumina, but market participants
believe that growth would also affect global trade flows of
non-metallurgical forms of the mineral.
In September, alumina was one of the refractory materials
removed from a list of Chinese imports into the United States
earmarked for a 10% import tariff after the industry lobbied
for supplies of this key raw material to remain unrestricted.
Norsk Hydro’s Brazilian alumina refinery
Alunorte in Pará state was hit by flooding in February,
prompting concerns that effluent from the largest alumina
refinery outside China could be polluting nearby watercourses
Norsk Hydro refuted these claims, however, and has been
battling with the Brazilian authorities to allow Alunorte to
resume regular operations.
Since March, the authorities have forced Alunorte to operate
at 50% of capacity and its solid waste disposal deposit (DRS2)
operations were halted after the floods. The company was then
forced to suspend all activity in early October, including its
Paragominas bauxite mine.
The reduction in Alunorte’s output further
exacerbated wavering exports of Brazilian bauxite and helped
contribute to rising prices for alumina during the year.
Also in November, Chinese mining company Bosai Group
acquired 51% of Shandong Qixing Group’s alumina
refinery for 1.2 billion yuan ($1.73 million*).
The Qixing refinery has a capacity of 500,000 tpy of alumina
but has also been idle for more than a year due to financial
Elsewhere, Canadian company First Bauxite began
industrial-scale trial shipments of bauxite-based ceramic
proppants to the US in May, where it hopes to become a supplier
to the fracking industry.
However, French industrial minerals giant, Imerys, which
also produces ceramic proppants, complained of weak demand for
this type of product over the last 12 months.
Australian Bauxite, meanwhile, reported its first sales of
fertiliser-grade bauxite in May, as a separate product line
to its alumina for cement and its planned output of aluminium
fluoride for metallurgical and battery markets.
Refractories continued to be the major end market for
non-metallurgical alumina in 2018, although demand varied as
steel production began to ease around the middle of the
Official figures from China, released in late November,
showed that the country produced 637,400 tonnes of unshaped
refractory materials in October 2018, up 0.87% year-on-year, of
which 572,200 tonnes were alumina-silicon refractory materials,
up by 1.63% compared with October 2017.
China’s total unshaped refractory product
output in the first 10 months of 2018 was 5.78 million tonnes,
up by 3.35% year-on-year, and alumina-silicon refractory
material accounted for 4.88 million tonnes of this, up 9.72% on
the same period in 2017.
Elsewhere, demand for refractories remained reasonably firm
in Europe and North America in 2018, supporting
non-metallurgical alumina consumption.
Strong demand for speciality alumina
In July, Germany-headquartered speciality alumina producer
Almatis announced plans to build a new tabular alumina facility
at Falta in West Bengal, India, expanding an existing site
operated by the company since 1995.
Almatis did not disclose the capacity of the new facility
but said it was increasing production to satisfy growing Asian
demand for tabular alumina in the refractories sector.
In September, French speciality alumina producer Alteo
announced it would raise prices for its entire portfolio of
products because of increasing production costs amid
unrelenting demand for its material.
In June, Germany’s Nabaltec announced plans to
build a new 30,000 tpy refined hydroxide facility in the US
state of Tennessee, due to be commissioned by August 2019.
The facility will use alumina tri-hydrate (ATH) as its main
The company is also planning to build a second facility in
another US location in the near future.
In October, Nabaltec formed a Shanghai-based trading company
to service expanding Chinese for boehmite, which is a type of
aluminium oxide used in battery separator films.
Like other industrial mineral markets, the bauxite and
alumina industry has begun diversifying its application
profile, with speciality aluminas leading the charge into new
high-value markets – a trend that looks likely to
continue in 2019.
For ATH in particular, flame retardants, water treatment
chemicals and aluminium fluoride are all expected to boost
demand in the foreseeable future, keeping prices firm.
Market share growth is being aided by the arrival of new,
non-Chinese supply of bauxite and alumina.
In the meantime, restrictions on Chinese supplies of bauxite
and alumina are expected to continue into 2019, with further
rounds of closures planned for March.
* Conversion made December 2018
A round-up of the year’s main events in the
global graphite market.
The graphite industry enjoyed a year of relatively stable
high prices in 2018, sustained by strong demand from the
refractories and batteries sectors and restricted supplies from
By November, however, market participants were reporting
that the market was starting to loosen, as new capacity in
Africa and Asia began to take pressure off supply at the same
time as demand softened.
Supply generally kept pace with demand in 2018, despite the
curbs on Chinese output and persistent problems at Syrah
Resources’ Balama project in Mozambique, which
struggled to meet guidance throughout the year. And even the
closure of Imerys’ and Gecko
Graphite’s Otjiwarongo mine in Namibia in
October failed to raise supply concerns.
Chinese production remains curtailed
After an eventful 2017, when all significant Chinese
graphite-producing regions were affected by government
inspections and shutdowns, 2018 witnessed further curbs on
Shandong province, China’s largest
graphite-producing region, saw a round of temporary factory
closures in May – the first since 2017 –
ahead of the Shanghai Cooperation Organisation (SCO) Summit
held in Qingdao in June.
At Fastmarkets IM24 Congress in Barcelona, Spain, in June,
the notion that China’s dominance over global
graphite supply is waning was widely dismissed, however.
The country continues to account for between 60% and 70% of
global graphite supplies – a share that has barely
shifted despite the opening of new non-Chinese mines in 2018
– and has the flexibility to ramp up production and
exports at short notice.
New supply stutters
Having become the first new non-Chinese graphite mine to
open in a number of years in December 2017, Syrah
Resources’ 350,000-tonnes per year (tpy) Balama
mine has been plagued with problems during 2018.
Issues with ramping up the mine and processing facility kept
production behind forecasts, yet the company stuck to its
bullish business plan, announcing in May that it would acquire
a site in Louisiana, US, for $1.23 million to build a spherical
However, in October, a fire at the Balama plant forced the
company to halt production for a number of weeks, leaving it
unable to meet orders.
The problems did not prevent the company from lining up more
offtakers to add to its list of Asian customers and, in
November, Syrah signed a binding offtake agreement for 20,000
tpy of graphite with China’s Qingdao Taida-Huarun,
In Canada, Nouveau Monde Graphite successfully commissioned
the wet circuit of its 3.5 tons (3.2 tonnes) per hour
demonstration plant in Saint-Michel-des-Saints, Quebec, for
upgrading material from its Matawinie project.
Although the plant had been due to come online in July,
Matawinie remains one of the most developed new graphite
projects in North America. Nouveau Monde hopes to produce 1,000
tpy of flake graphite, 100 tpy of expandable graphite and 250
tpy of uncoated spherical graphite over the next two years.
Back in Africa, Bass Metals announced in October that it had
achieved the nameplate 500 tonnes per month production at its
Graphmada mine and processing plant in eastern Madagascar,
having commenced production in June. The company sold 274
tonnes flake graphite concentrate in the first three months of
In its third quarter results, released in early November,
France’s Imerys said it had closed its Namibian
Otjiwarongo graphite mine because of low prices and problems
with ramping up production.
The $50 million mine and plant – which is a joint
venture with local company Gecko Graphite and had been
forecast to produce 20,000 tpy of flake graphite –
was put on care and maintenance for the foreseeable future.
The facility started production in May 2017.
Demand for flake graphite for use as anode material in
batteries continued to be hailed as the main growth market for
natural graphite in 2018.
Industry estimates suggest that around 90% of the raw
material used to make battery anodes is graphite –
either natural or synthetic – with anode makers mixing
natural material into synthetic bases to reduce costs.
Natural graphite continues to compete with synthetic for
battery market share as well as use in other applications such
as flame retardants.
Estimates put forward at Fastmarkets IM7 Graphite &
Graphene Conference in London, UK, in September, suggested
that the current market split of natural to synthetic
graphite is 50:50, although demand for synthetic graphite is
reported to be growing more quickly than demand for natural
Elsewhere in the world
While investor interest has rebounded in other battery
minerals, such as lithium and cobalt, graphite companies have
found it harder to regain momentum.
Permit bottlenecks in highly promising regions such as
Madagascar have held back new projects by Tirupati Carbons and
NextSource Materials, while a lack of funding has delayed
progress at a number of North American and European mines.
Consumption of graphite in refractory materials remained
robust in 2018, thanks mainly to strong global steelmaking
In October, graphite, along with other refractory minerals,
was removed from a list of Chinese products due to face an
immediate 10% import tariff, potentially rising to 25% in
Although major Western consumers of graphite have expressed
an interest in establishing 100% non-Chinese supply chains,
they have made it clear they will only shift purchasing
patterns when non-Chinese graphite can be supplied at or near
Chinese price levels.
This is despite risks associated with an over-reliance on
Chinese supplies, plus the widely held view that China may
become a net importer of graphite to support its domestic
battery-making industry within the next 10 years.
Predictions from Chinese graphite companies suggest that a
number of the 147 or so active Chinese graphite mines will
disappear over the coming years, either through consolidation
And Chinese processing capacity is also likely to shrink, as
acid-treatment plants are being phased out in favour of
less-aggressive chemical- and water-based processing under the
government’s environmental legislation.
These factors, coupled with growing demand from battery
anode, graphite foils and flame retardant producers, could
create opportunities for non-Chinese graphite miners if they
can control costs and successfully produce the high-quality
materials required for these applications.
A round-up of the year’s main events in the
global fluorspar market.
The world fluorspar market remained tight in 2018, after
more than 500,000 tpy of fluorspar supply was removed in China
a year earlier as a result of government-ordered shutdowns of
polluting production plants.
More than a million tonnes of fluorspar production has come
offline globally since 2011, while just 280,000 tonnes of new
supply has entered the market over the same period.
Towards the end of the year, stocks of Chinese fluorspar for
export were running seasonally low, exacerbated by ongoing
environmental inspections and factory closures in Northern
China and Inner Mongolia.
There were also unconfirmed reports that producers and
traders were holding back material to further push up prices.
Meanwhile, in Europe, low water levels in the Rhine meant
that inventories began to build up at the river’s
ports towards the end of the year, as suppliers were unable to
ship material to customers.
In North America, new supplies from Canada came too late in
the year to ease pressure on the market. In September,
fluorspar was left off a list of Chinese raw materials
earmarked for import tariffs by the US government.
Dwindling availability of fluorspar was reducing spot buying
towards the end of 2018, with more buyers moving towards
contracts to lock in supplies. Contracts for 2019 deliveries of
South African fluorspar were settled in October this year,
several weeks earlier than usual.
Prices for both acidspar and metspar began to increase in
September and have continued to rise ever since, with acidspar
price growth outstripping metspar.
Strong fluorspar pricing helped contribute to strong
financials at the world’s largest fluorspar
producer, Mexichem, which reported a 35.6% rise in
third-quarter profits in October to $82.4 million.
Chinese squeeze continues
The Chinese government has continued its crackdown on
fluorspar mines and processing facilities that fail to meet its
tough new environmental and safety standards.
In September, the country’s government
announced a fresh round of environmental inspections on
fluorspar mines, in addition to an earlier round of inspections
on heavy industries launched in May.
In October, three fluorspar mines in Qingliu county, Fujian
province – Fujian Yongfu Chemical, Qingliu County
Mingsheng Fluorite Mine and Qiukoutong Fluorite Mine –
were placed under inspection as part of the local
government’s new safety inspection project.
The squeeze on domestic supplies has fuelled suggestions
that China is now a net importer of fluorspar. According to
data compiled by Roskill Information Services, Chinese metspar
imports are expected to reach 233,000 tonnes for the whole of
2018, outstripping projected exports of 204,000 tonnes.
Operating rates at Chinese fluorspar companies were estimated
to be as low as 45-50% of capacity during the middle part of
In April, France’s Arkema completed a 20%
expansion of its fluoropolymer plant in Calvert City, Kentucky,
US. The company said it had increased its capacity to serve the
growing US fluoropolymer market, but did not disclose the
overall capacity of the facility, which makes Kynar-branded
polyvinylidene fluoride (PVDF) products.
According to speakers at Fastmarkets IM’s
Fluorspar 2018 conference in Johannesburg in June, Chinese
domestic consumption of locally-produced fluorspar has
increased by more than 10% in the last decade to 90%.
The growth of fluorspar-based products, such as fluorine
polymers, has helped diversify end markets for fluorspar. In
recent years, demand for acidspar has suffered from
restrictions on the use of certain fluorochemicals in
refrigerants, while metspar has benefited from a resurgence in
global steel production since 2016.
A rebound in the hydrofluoric acid (HF) market, which
consumes about 40% of all fluorspar supply, also supported
both demand and prices in 2018. The Chinese HF market, in
particular, saw strong price appreciation in the first half
of the year.
Some European HF capacity changed hands during the year and
more production has been shifted to Asia.
In June, Alkeemia, a subsidiary of Italian fluorochemicals
company Fluorsid, completed its purchase of Belgian chemicals
producer Solvay’s Porto Marghera-Venice HF
production plant in Italy.
In the US, controversy over the use of hydrofluorocarbons
(HFCs) heated up in 2018. In July, US-based chemicals producers
Chemours and Honeywell International stepped up their appeal
against the removal of a ban on HFCs by petitioning the US
Supreme Court for a review.
Around the same time, the Attorneys General of 10 US states
and of the District of Columbia, also launched a challenge to
the decision by the US Environmental Protection Agency to
cancel regulations that ban the use of HFCs.
Early-stage miner Canada Fluorspar shipped its first
delivery of around 4,700 tonnes of fluorspar from its St
Lawrence project eastern Canada in August. The company, which
suffered numerous delays to its project over the last two
years, is ramping up to a nameplate capacity of around 200,000
In South Africa, Sepfluor made good progress at its Nokeng
project during the year and is confident it will make first
deliveries from the 200,000-tpy capacity mine in early
Elsewhere, SC Mining in Thailand added 12,000 tpy of new
capacity in 2018, while in Mongolia, local producer
Mongoljuyuanli reportedly commenced production at a 10,000-tpy
operation in June and Mongolia International Minerals
reportedly brought an idled 12,000-tpy mine back online in the
In Kenya, the country’s Mining Ministry
announced in August that it was seeking investors to restart
Kenya Fluorspar’s 120,000-tpy mining operations
in the country’s Keiro Valley, which has been
shut for two years. In September, however, local media
reported that the plans had stalled due to a row about
compensation for landowners.
Average demand growth for fluorspar is expected to continue
at a steady 3% per year, driven mostly by refrigeration gases,
aluminium fluoride and fluoropolymers.
Market participants warned that there could be supply
shortages in the near future, however, if new fluorspar sources
fail to ramp up in time and China continues to shut down
Downstream, end-market diversification and strong demand for
high-performance chemicals are expected to underpin robust
manufacturing activity and could see further capacity
expansions in the fluorspar market.
A round-up of the year’s main events in the
global lithium market.
The global lithium sector remained extremely active in 2018,
with established producers and junior companies investing in
additional capacity amid high prices and strong demand driven
by the electric vehicle (EV) battery sector.
Yet despite remaining at historically high levels –
more than $16 per kg compared with $5-6 per kg in 2015
– lithium prices showed some signs of softening
towards the end of the year.
Contract prices fell month-on-month between June and
December, due to lower spot prices in China – mainly
as a consequence of the increased availability of lithium
compounds, and coinciding with the arrival of significant new
Australian spodumene supplies in the second half of the year.
EVs and batteries continue to drive
The faster than expected adoption of EVs caught the lithium
market off-guard two years ago and EV output continued to be
strong in 2018, particularly in China, although lithium
supplies had started to catch up with demand by the end of the
Chinese new energy vehicle output almost doubled in the
first half of 2018, to 413,000 units, government figures
In the meantime, EV and other kinds of battery makers made
more moves to lock in lithium supply over the last 12
In October, China’s Ganfeng Lithium extended
its offtake deal with Korea’s LG Chem for a
further three years, providing battery maker LG with an extra
45,000 tonnes of battery-grade lithium carbonate and hydroxide
from Ganfeng, to give it a total of 92,600 tonnes between 2019
In the same month, Tesla agreed an offtake deal with
Ganfeng, which will see the producer deliver 20% of its lithium
hydroxide production capacity to Tesla between 2018 and the end
Tesla also signed a three-year offtake deal in May with
Australian spodumene junior Kidman Resources. The agreement,
for an undisclosed volume, is expected to commence in 2019.
In October, German car manufacturer BMW signed a three-year
offtake deal with Gangfeng Lithium at market prices, also for
an undisclosed volume.
LG, meanwhile, has a five-year offtake agreement with
Canadian junior Nemaska Lithium for 7,000 tonnes per year
(tpy) of lithium hydroxide, starting in 2020. Nemaska also
secured offtakes with US-based FMC Corp, Japan’s
Hanwa Corp and Swedish battery maker Northvolt.
While a handful of established lithium producers continue to
dominate the market, the arrival of new supply ate further into
their market share in 2018, while the big companies had to deal
with numerous obstacles to their operations.
The world’s largest lithium producer,
Chile’s Sociedad Quimica y Minera de Chile (SQM),
increased its revenues from lithium and derivatives by 7.7% to
$500.9 million in the nine months to the end of September.
Also in September, SQM objected to moves by
China’s Tianqi Lithium to acquire a 24% stake in
the Chilean miner, citing competition concerns.
SQM’s US-based rival Albemarle Corp meanwhile
had an eventful 2018, meanwhile Albemarle was forced to close
its US and Chinese plants for a few weeks in the third quarter,
due to a hurricane and environmental inspections.
In October, Chilean national economic development agency,
Corfo, opened a dispute with Albemarle at the International
Chamber of Commerce over a sales contract.
And in November, Albemarle signed a deal with Australian
miner Mineral Resources (MRL) to develop a 50,000-tpy
battery-grade lithium hydroxide plant, based at the Wodinga
hard rock lithium mine in Western Australia’s
Towards the end of 2018, Albemarle was still negotiating
with Chilean authorities over plans to build a 42,500-tpy
lithium carbonate plant in Chile, which the government claims
is lacking environmental information.
In Argentina, Australian miner Orocobre reported production
and sales were down by more than a third in Q3, due to a
maintenance shutdown of its lithium carbonate production plant
in September and seasonally lower evaporation rates at its
Elsewhere, Livent Lithium, which was spun out of US chemicals
company FMC Corp, listed on the New York Stock Exchange in
October, hoping to cash in on investor enthusiasm for battery
metals and electric vehicles. The company produces lithium in
Argentina and has processing facilities in the US and China.
Australian spodumene producers spurred
Boosted by relatively enthusiastic investor sentiment
towards lithium, several Australian companies accelerated
spodumene production in 2018.
Altura Mining commenced spodumene production at its 220,000
tpy Altura mine in Western Australia in July. In November, it
secured an offtake agreement with Ganfeng Lithium to supply
70,000 tpy of spodumene.
Fellow Australian spodumene miner Tawana Resources also
reported successive increases in spodumene output, although
mining delays towards the end of the year caused the company to
rein back its production target for July-December to
55,000-60,000 tonnes from 60,000-75,000 tonnes.
Meanwhile, Neometals maintained strong spodumene production
levels into the third quarter of the year but reported falling
exports. Neometals’ Kalgoorlie refinery to process
its own spodumene into 10,000 tpy lithium hydroxide in
Australia was on track at the end of the year, for
commissioning in 2021.
In October, Pilbara Minerals shipped its first 8,800 tonnes
of spodumene from its Pilgangoora mine in Western Australia to
customers in North Asia.
Outside Australia, small maiden spodumene shipments came from
AMG Mineração’s Mibra mine in
Brazil in September, while Namibian lithium producer Desert
Lion Energy began shipping lepidolite concentrate in July.
Both companies exported their material to China.
Falling lithium prices towards the end of 2018 indicate that
supply is starting to close the gap on demand, driven partly by
additional Australian spodumene capacity being shipped to
New brine, clay and hard rock projects in South America,
North America, Africa and Europe progressed during 2018 but are
unlikely to add significantly to supplies in 2019.
Battery production looks set to remain the main driver of
lithium demand in 2019.
The establishment of new non-Chinese processing plants could
start to reshape trading patterns for lithium within the next
And, with a range of supply options and the slightly softer
market conditions anticipated over the next year, it is
possible that buyers will be less concerned about locking in
supplies and will start to negotiate tougher deals with
A round-up of the year’s main events in the
global rare earths market.
After a number of rough years characterised by severe
oversupply and low prices, the global rare earths industry had
a relatively steady 2018.
A steep increase in the production of electric vehicles
helped support demand and prices for neodymium, in particular,
which offers significant benefits in electric vehicle motors,
while dysprosium-based magnets used in electronic devices were
also in high demand.
Speculation about China’s rare earths policy
continued amid rising trade tensions between China and the
US, while the few non-Chinese rare earths projects that have
survived the past six years took some notable steps forward.
Chinese dominance continues
China was responsible for more than 80% of global rare
earths output in 2017 and nothing that happened in 2018 has
done anything much to shift this dominance.
However, in June, the Chinese government issued an update to
a previously announced policy to widen access to
China’s raw materials industry, including rare
While still prohibiting foreign investment in rare earths
exploration and mining, the government removed restrictions on
the smelting and separation of rare earths, which were
previously limited to joint ventures and co-operations with
Yet these overtures to international companies have done
little to ease political trade relations, particularly with
In September, the US government said it had excluded rare
earths compounds and magnets from its final list of tariffs
against $200 billion-worth of Chinese imports – due to
face an immediate 10% duty, potentially rising to 25% in
Industry observers noted at the time that finding
alternative sources of these minerals, which are considered
essential to the US defence industry, would be difficult given
the lack of active mines outside China.
China retaliated to the US protectionist measures by
increasing tariffs on many imported US-origin products
– worth about $16 billion – but refrained
from restricting the supply of rare earths products to the
Meanwhile, consolidation of China’s rare earths
industry into state-run conglomerates continued in 2018,
although the expanding government-run businesses have not been
free from problems.
In late June, Chinese state-owned metal company Chinalco
ordered its rare earth unit in Guangxi to suspend operations
after government inspectors found contaminated water sources
near the company’s mines.
Chinalco said it was investigating the issue and would
discipline those responsible. The government’s
rare earths production quota for Guangxi in the first half of
2018 was 1,750 tonnes of heavy rare earth oxides, 14% of
China’s total heavy rare earth quota for the
In late October, Chinese state media refuted claims by
international research groups that China planned to slash its
rare earths output. State media quoted the
country’s Ministry of Industry and Information
Technology as saying that China would in fact raise rare
earth mining quotas for 2018 from 105,000 tonnes to 120,000
tonnes and increase the smelting quota from 100,000 tonnes to
Rare earths production outside China continues to be minimal
and difficult, but some companies did successfully contribute
to global supply.
Rainbow Rare Earths, which operates the Gakara project in
Burundi, said it had sold 475 tonnes or rare earths concentrate
in the year to 30 June 2018 and a further 350 tonnes in the
three months to the end of September.
After riding out a torrid few years, Australian rare earths
miner Lynas Corp revealed in July that it was, for the first
time, stockpiling neodymium and praseodymium (NdPr), in
response to price fluctuations – a move that helped it
increase profits during the year.
In September, the Malaysian government launched an
investigation into Lynas’ Advanced Materials Plant
(LAMP) in Kuantan regarding the facility’s
management of radioactive waste.
The following month, Lynas alleged that the
government’s investigation was neither fair, nor
independent as it was
being led by a politician hostile to Lynas’
operations – Malaysian deputy minister, Fuziah
In late October, the company said it had been granted an
extension of its temporary permission to store waste materials
from its processing operations at the LAMP, while it awaited a
decision on a longer-term application.
Meanwhile, in India, varying volumes of monazite-based rare
earths material continue to be produced, but erratic
government policies and intermittent bans on mining in
regions such as Tamil Nadu have been partly to blame for
India not ramping up its contribution to rare earths output.
Elsewhere in the world
The number of companies exploring for rare earths outside
China has dwindled considerably in the past six years, although
a handful are still progressing projects.
Australian junior Arafura Resources received a
recommendation for approval from the environmental protection
agency of Australia’s Northern Territory for its
Nolan rare earths project in January.
And in November, Arafura said it planned to build a
separation plant at Nolan to produce up to 3,600 tpy NdPr oxide
from material extracted from its 14,000-tpy operation.
Meanwhile, fellow Australian junior miner, Northern
Minerals, produced its first batch of mixed rare-earth
carbonate in October, from a pilot plant at its Browns Range
facility in Western Australia – the first heavy
rare-earth carbonate to be produced from xenotime ore outside
In New South Wales, Australia, Alkane Resources said it is
still committed to using the profits from its Tomingley gold
mine to finance the development of its Dubbo rare earths
In the US, Medallion Resources is building a plant to process
monazite by-product from mineral sands mining at a facility
in Nebraska, and Texas Mineral Resources is developing a rare
earths deposit in Texas.
While the rare earths market continues to be tough and price
volatility still undermines the economics of many early stage
projects, there is significant political will behind getting
more non-Chinese rare earths supply into the market.
Overcapacity is still a problem for many companies who are
relying on price increases for NdPr in particular to offset
likely losses from low-value light rare earths.
But with defence industries, electric vehicles, consumer
electronics and renewable energy generation continuing to
grow, the future for rare earths looks like it will be
brighter in 2019 than it has been for a number of years.
A round-up of the year’s main events in the
global TiO2 feedstocks and zircon markets.
Prices for titanium dioxide (TiO2) declined gradually during
2018, particularly in China, where large-capacity investments
over the past few years have added weight to supply against
Some companies, including US-based Venator, attempted to
introduce price increases in the second half of the year, in an
effort to counter lower prices coming from China.
Meanwhile, zircon prices performed strongly, due to tight
supplies and robust demand from ceramics and other end
In November, leading Australian mineral sands miner Iluka
Resources forecast the zircon market would remain in structural
deficit over the next few years, due to a shortage of new
projects scheduled to come online.
At TZMI’s 2018 congress in Singapore in
mid-November, market participants said that a reliable and
consistent supply of zirconium and titanium minerals remains
a primary concern for pigment, welding and ceramic end users.
Companies face disruption worldwide
In July, global mining firm Rio Tinto declared force majeure
at its Fer et Titane titanium slag business in Quebec, Canada,
due to a problem with one of its furnaces.
Rio Tinto said it would take several months to repair the
furnace and did not expect its slag plant to return to full
operation before the end of the year.
Rio Tinto’s Richards Bay mineral sands mine in
South Africa was also forced to halt production during the
year, with stoppages in April and July.
Irish miner Kenmare Resources reported unplanned outages
during 2018, contributing to production shortfalls.
In September, the 80,000-tpy Armyansk sulfate-route titanium
TiO2 plant in Crimea, in Russia-annexed Ukraine, was forced to
close for two weeks after a large release of sulfur dioxide
In late November, Iluka announced that it had resolved a
labour dispute at its operations in Sierra Leone and would
restart mining imminently. The company has faced industrial
action at its rutile mines in the country since October,
causing intermittent stoppages.
Saudi Arabia’s Cristal, meanwhile, reported
production problems at its operations in Saudi Arabia and
Australia during the year. Technical problems at its
260,000-tpy Saudi ilmenite slag smelter means the facility will
not come online until the second half of 2019.
Australia’s Base Resources had a relatively
problem-free 2018, reporting rising prices for its material and
achieving record-high mineral sands output of 25,125 tonnes
from its Kwale operation in Kenya in the third quarter,
although sales of rutile and zircon both declined.
Australia’s Mineral Commodities also had a
steady year, reporting steady production from its Tormin mine
in South Africa.
Tough conditions for US TiO2
In November, US TiO2 producer Kronos reported prolonged
third-quarter destocking by pigment buyers, pulling down sales
volumes for the three-month period by 19% year on year.
Rival North American producers Chemours, Tronox, and Venator
all reported similar trends in their third-quarter
Towards the end of the year, Tronox reported good progress
towards completing its merger with Saudi Arabian TiO2 producer,
The deal is subject to a number of conditions set by the US
Federal Trade Commission on antitrust grounds, including the
sale of Ashtabula plant in Ohio – for which the
companies said they had found a buyer in November after an
earlier deal with Venator fell through.
Chinese TiO2 capacity still growing
In March, world leading TiO2 producer, China’s
Lomon Billions announced plans to further enhance integration
by purchasing Chinese ilmenite producer, Sichuan Anning. The
deal was scrapped in May, however.
In late November, Lomon Billions signed a multi-year offtake
deal with paint company PPG that included a portion of its
planned 200,000 tonne chloride-route TiO2 pigment expansion in
China’s TiO2 industry rode out 2018 relatively
unscathed by environmental inspections that have slashed
capacity in many of the country’s other
industrial minerals sectors.
In India, Transworld Garnet International, a subsidiary of
VV Mineral (VVM), began exporting ilmenite from Andhra Pradesh
Transworld did not disclose the volume of the shipment,
other than to say it was a bulk cargo. The company expects to
eventually produce around 100,000 tpy of ilmenite.
This year, India has witnessed lengthy disputes about the
safety and environmental impact of domestic mineral sands
mining, while floods in Kerala in August disrupted
Iluka expects to start production at its Cataby ilmenite
mine in Western Australia in the first half of 2019, with
output expected to be approximately 100,000 tonnes of combined
synthetic rutile, rutile and zircon.
Also in Australia, MZI increased mineral sands output at its
Keysbrook mine in Western Australia during the year, although
the company admitted that it had problems achieving target
rutile recovery rates.
Melior Resources began wet commissioning at its Goondicum
deposit in Queensland in the third quarter of 2018, while
Sheffield Resources said its Thunderbird project in Western
Australia would be construction ready by the end of the
In Africa, Australia’s Strandline Resources
secured a binding offtake agreement in October with trader
IMMCO for 100% of future rutile production from its
15,600-tpy Fungoni project in Tanzania. First production from
Fungoni is expected in the first half of 2019.
Despite the declines in TiO2 prices in 2018, expectations for
mineral sands prices remain relatively bullish overall.
Premium zircon sand prices are expected to remain firm in
Europe and China in the first half of 2019, due to a
combination of supply tightness and strong end-market
Plentiful supplies of standard-grade zircon sand in China is
likely to put pressure on prices in this market, however.
Strained rutile supplies are expected to keep prices up into
2019, although some pigment producers are looking at replacing
natural rutile with synthetic feedstock and welding end users
have begun to blend rutile with ilmenite to reduce costs.
Concerns about high inventories of TiO2 pigment are unlikely
to dampen the market for sulfate-route ilmenite significantly
in the early part of 2019. Sulfate-route TiO2 pigment producers
are facing more competition for ilmenite feedstock from
chloride slag producers.
A number of TiO2 companies admitted towards the end of the
year that they were not hopeful of pushing through price
increases in 2019, barring any major unforeseen capacity
A round-up of the year’s main events in the
global antimony trioxide market.
One of the more volatile industrial minerals in terms of its
price trends, antimony trioxide (Sb2O3) had a bumpy year in
2018 as values for antimony metal fluctuated regularly.
Unforeseen incidents, including the seizure in August of a
large shipment of smuggled antimony metal in China, created
sudden gaps in the market and threatened to affect supplies of
antimony feedstock to trioxide producers, thereby leading to
According to reports, more than 3,000 tonnes of antimony
metal were seized by the Chinese authorities in a crackdown on
smuggling, although it is not clear what subsequently became of
the impounded metal.
Hiatuses in Chinese supply during the country’s
Lunar New Year celebrations in February and its Golden Week
holiday at the beginning of October failed to move prices,
however, as buyers had secured material in advance of these
regular and well-advertised breaks in trading.
Towards the end of 2018, spot prices for antimony trioxide
slid on weak demand and a lack of inquiries from buyers amid
seasonal end of year destocking.
As well as purchasers sitting on their hands while sellers
and traders rushed to sell old stock before Christmas, low
demand has been attributed to high inventories among producers
of antimony trioxide-based flame retardants.
Global output of antimony trioxide was expected to remain
fairly stable through 2018 at around 110,000 tonnes, with China
remaining the leading producer.
In September, antimony was removed from a list of
China-origin imports due to face 10% import tariffs in the US,
allaying concerns about market disruption for Chinese
Concerns over US-Chinese trade tensions remain prevalent
among metals and minerals traders, however, and have made
buyers more sensitive to potential changes in their supply
chains and to the need for contingency plans.
In September, the Minor Metals Trade Association (MMTA) said
that China’s dominance of the antimony industry
could be waning, thanks partly to declining reserves and
environmental shutdowns (as well as falling demand), which have
caused output to drop in China.
Chinese mine production declined by 7% per year over between
2010 and 2017, the MMTA said.
End market risk
Calls from chemical safety watchdogs to phase out antimony
trioxide from household flame retardants, due to its intrinsic
toxicity, have increased over the year.
Concerns about the effect of the chemical on human health,
which were first seriously raised in the US by the National
Toxicology Program (NTP) in 2016, centre mainly on its
In October, the NTP concluded that antimony trioxide could
reasonably be anticipated to be a human carcinogen, and in
November, it said it would add the chemical to its list of
In the same month, attendees at the International Antimony
Association Day in Brussels said that despite the minimal
scientific evidence – based only on studies on animals
using powdered forms of the chemical – pressure to
replace antimony trioxide in flame retardants could induce
policy makers to bow to activist demands.
So far, there have been no official calls in Europe for the
substitution of antimony trioxide and demand growth for the
chemical is anticipated to remain steady for the next few
years, due to increasing consumer demand for fire-safe
However, the MMTA said in September that regulatory
evaluations in Europe under the EU’s REACH
chemical safety regulations might drive manufacturers to
As with other industrial minerals, there have been moves to
open up new antimony mines outside China to reduce supply
concentration, and 2018 saw progress at a number of major
In July, the Chinese government confirmed that plans to open
up its mineral industry to foreign investors would not extend
to antimony, which the government wants to protect as a
strategic national resource.
Earlier in the year, in March, Russian miner Polyus said it
had started selling antimony produced from its Olimpiada gold
deposit in Russia.
The company, which is listed in the UK, said that it could
potentially supply up to 15% of global demand for antimony,
with output estimated at 15,000-20,000 tpy.
Polyus also said it had signed sales contracts for all of
its 2018 antimony concentrate production and had plans to ship
material to China.
In the second half of the year, Oman-based Strategic and
Precious Metal Processing (SPMP) said it was nearing first
production at its 20,000-tpy Oman Antimony Roaster
SPMP signed a supply agreement with Luxembourg-based trader,
Traxys, in June, to supply an undisclosed volume of antimony
According to SPMP, once at full capacity, its Omani plant
will supply up to 12% of the world’s current
antimony demand, reducing Chinese dominance in this market.
However, since the OAR relies on third party supplies of
antimony ore (stibnite), its main function will be to diversify
processing capacity, rather than overall net supply of antimony
metal and trioxide.
One of the company’s main investors is
UK-listed Tri-Star Resources, which owns 40% of the project,
with the rest being held by Dubai-based Dutco Group (20%) and
the Oman Investment Fund (OIF), a sovereign wealth fund of the
Sultanate of Oman (40%).
In July, Tri-Star said it was anticipating first antimony
production by the end of October, although it is unclear
whether the company adhered to this schedule.
Following the NTP’s registration of antimony
trioxide as a known carcinogen, the impact on demand for the
chemical remains to be seen. In the near term at least,
rising consumption of flame retardants is expected to support
In September, the MMTA said that, as well as projects in
Russia and Oman that have or were expected to come online in
2018, new developments in China, Russia and Tajikistan are
fundamental to the outlook for antimony supply and demand.
A round-up of the year’s main events in the
global iodine market.
Iodine prices continued to edge up during 2018, having risen
steadily since August 2017.
Global sales were believed to be exceeding production levels
at the end of 2018, indicating tight market conditions and more
promising fundamentals for iodine producers.
Although iodine’s price appreciation began to
slow in the second half of 2018, there was a 28% increase in
both the spot and contract prices in the period between August
2017, when prices were around $21 per kg, and the end of
November 2018 when values were pushing $28 per kg.
Towards the end of 2018, quarterly contract prices for
iodine exceeded spot market prices for the first time in almost
two years, reaching $27.50 per kg for the first quarter of
In September, currency weakness in China and India led to
sell-offs of iodine in these Asian markets, but this failed to
send prices for raw iodine into retreat.
Prices for iodine derivatives have not kept pace with
increases in prices for crude iodine, however.
At the CPhI Worldwide pharmaceutical industry exhibition in
Madrid in October, Fastmarkets IM learned that fierce
competition between iodine chemicals manufacturers had led to
a glut of cheap derivatives in the global market, keeping
In January, the long-running dispute between Chilean
Economic Development Agency, Corfo, and the
world’s biggest iodine producer, Sociedad de
Quimica y Minera de Chile (SQM), came to an end, after both
sides settled their differences over lease arrangements for the
Atacama Desert salt flats, Salar de Atacama.
Salar de Atacama is SQM’s main source of
mineral products and its agreement with Corfo dates back to
1993 and is due to run until 2030. In 2015, Corfo accused SQM
of not paying royalties and taxes due under the terms of the
contract and of abusing its water rights.
SQM denied the allegations but the dispute affected its
A new agreement, reached through an arbitration process,
means that SQM will pay more for its lease but will also be
allowed to expand its mineral extraction operations on the salt
Elsewhere, US iodine producer Iofina had a relatively strong
year in 2018, thanks to improved iodine prices and fewer
technical issues at its iodine extraction facilities in Texas,
Montana, Oklahoma and Kentucky. The company recorded first-half
2018 earnings of $725,000 from revenues of $20 million.
In October, Iofina announced it would focus its efforts on
selling raw iodine, after the iodine derivative hydriodic acid
(an aqueous solution of hydrogen iodide (HI)) imported from the
US to China was hit with a 118.8% anti-dumping tax, making
sales to the country unviable for Iofina – thereby
ending a 15-year trading relationship.
HI imports from Japan, meanwhile, faced a 41.1% tariff.
The tariffs were a consequence of a Chinese company claiming
that there had been sales of HI at prices below market value
from US and Japanese companies.
Iofina, which rejected China’s dumping
accusations, said it was on course to produce around 600 tonnes
of iodine in 2018, although it is not clear how much of this is
derivatives. The loss of its Chinese customers would dock
around $100,000 per year from its profits, Iofina said.
The status of fellow US iodine producers IOCHEM and Woodward
Iodine, which produce lithium from brines in Oklahoma, is
unclear. Both companies are privately owned and therefore do
not publicly report their production rates.
To retain its market-leading position, SQM is expanding
capacity at its Nueva Victoria plant in Iquique, Chile, to
14,000 tpy, up from 11,000 tpy.
The company expects to reach nameplate capacity in the first
half of 2019.
SQM was said to be using aggressive sales tactics, extending
sales volumes above its capacity to secure customers towards
the end of 2018.
There are significant doubts about whether SQM can secure
the water it will need to produce enough iodine to meet demand,
however, market sources told Fastmarkets IM.
Third-quarter earnings from SQM published in November
revealed that the company was on course to sell around 13,500
tonnes of iodine in 2018. But Fastmarkets IM estimates that the
company’s actual iodine output will total just
11,000-12,000 tonnes for the year, implying that the company is
selling from stockpiles. The company sold 12,700 tonnes of
iodine in the whole of 2017.
The status of other Chilean iodine producers, including ACF
Minera, Cosayach and Algorta Norte remains uncertain.
Cosayach is believed to produce around 4,000 tpy of iodine
and has the flexibility to expand, but the
company’s bitter rivalry with SQM has made
Cosayach hesitant about increasing capacity and other companies
are believed to feel the same way about SQM’s
dominance in the iodine market.
Both Cosayach and ACF Minera closed down some production
facilities in 2017 due to low iodine prices, but it has been
suggested that the recent price recovery in iodine could
encourage them to reopen the plants.
After a tough few years in the iodine market, stronger
pricing in 2018 put many iodine companies back in the black.
The rise in contract prices for the first quarter of 2019
indicated that tighter supply conditions are expected to
continue into 2019, further supporting prices.
Both sellers and buyers said they expect spot prices to move
to $30 per kg levels by early 2019.
Rising prices for iodine have raised the prospect of stalled
Chilean developments and idled capacity returning to
production, which could ease tightness in the market next
During 2018, Fastmarkets IM learned that Eloisa
Corp’s 2,000-tpy iodine project in Chile, which
failed to secure funding to complete construction in January,
could be revived in 2019. And a 1,200-1,500-tpy plant owned by
Cosayach, which was idled in 2017, may reopen in the near
In April 2018, Chile’s environmental
authorities gave the go-ahead for construction to begin at the
new Arbiodo iodine and nitrate project in Taltal.
Arbiodo expects the extraction facility, which will include a
60km pipeline and pumping station to supply the plant with
seawater, will cost around $400 million to build and will
have the capacity to produce 3,000 tpy of iodine. It is not
clear when Arbiodo aims to start production.
Pharmaceuticals and X-ray contrast media continue to be the
main growth markets for iodine, with other applications in
dyes, chemicals, food and agriculture. In the supplements
market, industrial iodine is beginning to be challenged by
A round-up of the year’s main events in the
global frac sand market.
North America remained the focus of the global fracking
industry in 2018, as relatively robust oil and gas prices
spurred on shale projects and drove demand for frac sand.
The market started to tip down in the second half of the
year, however, with fracking activity and the number of well
completions beginning to slow down – a trend that had
a knock on effect on frac sand consumption.
Logistics, a perennial bottleneck in the North American frac
sand supply chain, continued to be a problem through 2018, with
a lack of rail cars and trucks exacerbated by shortages of
labor and oil and gas pipeline capacity in the West Texan
Corporate activity remained strong during the year, with
several asset-level M&A deals and some corporate
In June, Unimin’s parent company Sibelco has
boosted its stake in the growing US frac sand market through a
merger with US-based Fairmount Santrol to create sand and
mineral producer, Covia.
The deal means that Sibelco now controls around 8 million
short tons per year of frac sand capacity in the Permian
Outside North America, fracking activity remained fairly
muted, although there was some progress at UK projects, after
years of battling against objections to fracking in the
Other projects in Europe, Africa and Asia also edged
forward, but have so far not begun contributing significantly
to global proppant demand.
Market dips in second half
Speaking at the sixth Fastmarkets IM Frac Sand Conference in
Denver, US, in September 2018, Joel Schneyer, managing
director at Capstone Headwater, suggested that sand intensity
has peaked due to the increase in the number of "child
wells", which are new wells drilled close to existing ones.
Schneyer said that proppant use per well in the US had risen
to more than 14 million lb of sand per well in the Permian
Basin in 2018, compared to around 4 million lbs in 2011.
However, he said the rate of increase had eased over the year
and that in the Eagle Ford basin, where most wells are child
wells, it actually fell in 2018.
France’s Imerys announced in October that it
would wind up its ceramic proppants business, in the face of
sluggish demand for non-sand proppants.
In September, newly formed miner Covia announced plans to
reduce frac sand capacity in Texas due to falling demand in an
oversupplied US market.
The company announced it would take 4.9 million short tons
of capacity out of the frac sand market by the end of January
The decline in proppant demand coincided with a slew of new
frac sand mines coming online, which applied downward pressure
The new capacity included a 4 million short ton per year
projects by Atlas Sand in Texas.
Projects due to come online or be expanded within the next
few months include frac sand mines from Black Mountain, Emerge
Energy, Preferred Sands and Alpine Silica in Oklahoma; Vista
Proppants in Oklahoma and Texas; and Shale Support in
US Silica Holdings’ chief executive Bryan Shinn
said in September that new frac-sand mine developments would
probably be mainly limited to the Permian Basin, due to the
low quality and disparate nature of reserves elsewhere in
Also in September, US fracking company Liberty Oilfield
Services pulled out of a major offtake agreement for around 1
million short tons per year of fine-mesh frac sand from
Canadian supplier Select Sands.
No reason was given for the termination of the contract,
which had been in place since 2017, although indications were
that weaker market conditions were responsible.
In November, fellow US frac-sand miner Hi-Crush signed an
offtake deal to provide an undisclosed volume of Northern White
frac sand to Chesapeake Energy over an unspecified period, for
use in the Marcellus and Powder River basins.
The announcement came after Hi-Crush was forced to
temporarily idle some frac-sand capacity in Wisconsin, due to
competition from in-basin sand supplies in Texas and
Away from the US, Cuadrilla Resources began fracking at its
two UK sites in Lancashire, in north-west England in October,
after several years of gaining various approvals from the
authorities. The company said it would frack for a
three-month period before analysing production results.
Logistics and infrastructure
Despite commitments from US president Donald Trump to
support the US domestic oil and gas industry, the shale sector
remains hamstrung by a lack of rail capacity and infrastructure
to support its expansion.
To date, only a handful of private developers have stepped
up to invest in these areas.
In June, Canadian mid-stream oil company Kinder Morgan
announced it was bringing a major new gas pipeline to West
Along with EagleClaw Midstream Ventures and Apache Corp,
Kinder Morgen signed a letter of intent to develop a $2 billion
pipeline to carry up to 2 billion cubic feet per day of gas to
the US East Coast. The pipeline is expected to be in service in
In October, US short-line railroad operator OmniTrax said it
would upgrade its frac sand handling capacity in a joint
venture (JV) with road-haulage company, 1845 Oil Field
The new JV, called ShaleTECH, will integrate short-line rail
freight and trucking and will heave between 12 and 14 crews
operating across various shale basins over the next year, with
each crew handling around 25,000 short tons per month, or 4.2
million short tons per year, of sand and proppant.
Estimates indicate that around 100 million short tons of sand
are shipped in North America every year.
Despite observing a marked reduction in frac sand
consumption in the second half of 2018, coupled with increased
competition among suppliers, North American frac-sand producers
remain optimistic that demand for the oilfield mineral will
recover in 2019. This assumption is based on plans by several
oil and gas companies to expand fracking activity next
Sharp falls in oil prices in November 2018 could jeopardise
these plans, however, especially if prices fail to recover to
levels economical for fracking operations.
The problem of a lack of pipelines to handle fracked oil and
gas in the Permian Basin is also expected to persist in the
first half of next year, although it is hoped the completion of
new hydrocarbons infrastructure projects will begin to ease
pressure in this area in the second half of 2019.
An oversupply of frac sand could continue to depress prices
over the coming months, although it is likely that price
weakness will result in further capacity being taken out of the
In the ceramic proppants market, this kind of product
continues to be eclipsed by cheaper sand products, especially
at onshore fracking sites, although there is still some
demand for ceramic proppants for offshore operations.