assessment of potential for transformational market growth amongst the critical metals - sykes et al...

An Assessment of the Potential for

Transformational Market Growth

Amongst the ‘Critical Metals’ John P. Sykes123

Joshua P. Wright4

Allan Trench567

Paul Miller8

1. Centre for Exploration Targeting, Department of Mineral and Energy Economics, Curtin

Graduate School of Business, Perth, Australia

2. Centre for Exploration Targeting, School of Earth and Environment, The University of

Western Australia, Perth, Australia.

3. Greenfields Research, Harrogate, UK. Email: [email protected]

4. Rowton Consolidated, Chester, UK. Email: [email protected]

5. Centre for Exploration Targeting, School of Earth and Environment, The University of

Western Australia, Perth, Australia

6. Department of Mineral and Energy Economics, Curtin Graduate School of Business,

Perth, Australia

7. CRU Group, London, UK. Email: [email protected]

8. Sulphide Resource Processing, Perth, Australia. Email: [email protected]

AusIMM Third International Future Mining Conference

Sydney, Australia: 4th November 2015

An Assessment of the Potential for Transformational Market Growth Amongst the ‘Critical Metals’

Key questions

• What is a critical metal and what are the common solutions for resolving

‘criticality’?

• Is growing the market instead a plausible way to reduce ‘criticality’?

• Has such transformational metal market growth occurred before?

• What causes this transformational metals market growth?

• Do any ‘critical metals’ have the potential for such growth?

• What are the implications for governments, consumers and suppliers

involved in the critical metals markets?

4th Nov 2015 AusIMM Third International Future Mining Conference Slide 2 of 21


‘Critical metals’ have important uses

but are exposed to supply risks

4th Nov 2015 AusIMM Third International Future Mining Conference

Source: USDOE (2011)

Transportation

Communications

Electronics

Batteries

Military

Renewables

Slide 3 of 21


The common solution to ‘criticality’ is

to “Reduce, Reuse and Recycle”


Source: USDOE (2011)

Geopolitics

Environment

Shortage

Sustainability

Slide 4 of 21


But their markets are often small and

thus they may outgrow their ‘criticality’

1

10

100

1,000

10,000

100,000

Co

pp

er

Go

ld

Alu

mn

ium

Zin

c

Ma

ng

an

es

e

Nic

ke

l

Ch

rom

ium

Silic

on

(m

eta

l)

Silv

er

Lead

PG

Ms

Tin

Mo

lyb

den

um

Ura

niu

m

Ma

gn

esiu

m

Tu

ng

ste

n

Co

ba

lt

Lit

hiu

m

Bo

ron

(B

ora

te)

RE

Ms

Van

ad

ium

Tit

an

ium

(M

S)

An

tim

on

y

Bari

um

(B

ari

te)

Nio

biu

m

Ind

ium

Germ

an

ium

Tan

talu

m

Th

ori

um

Gall

ium

Str

on

tiu

m

Bis

mu

th

Rh

en

ium

Bery

lliu

m

Me

rcu

ry

Cad

miu

m

Ars

en

ic

Tellu

riu

m

Metals market by size (US$ 2013 millions)


Source: Sykes et al., (2015, in press); USGS (2014)

Slide 5 of 21


However critical metals market growth

has been limited in the last decade Critical

Metal

2004-13 Market

Growth

Lithium 388%

Antimony 211%

Chromium 144%

Rare earths 93%

Vanadium 24%

Cobalt -5%

Strontium -57%


0

100

200

300

400

500

600

700

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Growth of metal market groups 2004-13 (US$ billions)

Industrial Non-Ferrous Precious Critical


Slide 6 of 21


But aluminium is an example of

previous transformational growth

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

0

50

100

150

200

250

300

190

0

190

3

190

6

190

9

191

2

191

5

191

8

192

1

192

4

192

7

193

0

193

3

193

6

193

9

194

2

194

5

194

8

195

1

195

4

195

7

196

0

196

3

196

6

196

9

197

2

197

5

197

8

198

1

198

4

198

7

199

0

199

3

199

6

199

9

200

2

200

5

200

8

201

1

Growth in aluminium and copper markets and prices in 2013 US$

Cu Market Size ($B) Al Market Size ($B) Cu Price ($/t) Al Price ($/t)



Slide 7 of 21


Nickel and uranium are other good

examples of rapid market growth

0

50

100

150

200

250

300

190

0

190

6

191

2

191

8

192

4

193

0

193

6

194

2

194

8

195

4

196

0

196

6

197

2

197

8

198

4

199

0

199

6

200

2

200

8

Growth in market size indices of copper and nickel (1900 = 1)

Cu Index Ni Index


0

5

10

15

20

25

195

0

195

4

195

8

196

2

196

6

197

0

197

4

197

8

198

2

198

6

199

0

199

4

199

8

200

2

200

6

201

0

Growth in market size indices of copper and uranium (1950 = 1)

Cu Index U Index


Slide 8 of 21


Aluminium benefitted from each of

discovery, supply and demand factors


Images: sandatlas.org; earlham.edu; tempraturedetectors.com & shutterstock

ABUNDANCE

CONCENTRATION

8.2%

Factors in place prior to 20th century

MINING

PROCESSING

DEMAND

Solved in late 19th & early 20th century

Source: Sykes et al., 2015, in press

Slide 9 of 21


Nickel and uranium also saw key

discovery, supply and demand changes


Images: Canadian Mining Review (nickel smelting) & shutterstock Source: Sykes et al., (2015, in press)

Slide 10 of 21


Some ‘critical metals’ are too rare and

some too difficult to find A

bu

nd

an

ce i

n t

he c

rust

> H

igh

(>100p

pm

)

Aluminium, Barium, Chromium, Magnesium,

Manganese, Silicon, Strontium, Titanium,

Vanadium

n/a

n/a

(theoretically the most

amenable to discovery)

Med

ium

(1

-

100p

pm

)

Beryllium, Boron, Cerium (REM), Dysprosium

(REM), Erbium (REM), Europium (REM),

Gadolinium (REM), Lanthanum (REM), Lithium,

Neodymium (REM), Niobium, Praseodymium

(REM), Samarium (REM), Scandium (REM),

Thorium, Tungsten, Ytterbium (REM), Yttrium

(REM)

Cobalt, Copper, Gallium, Germanium, Nickel,

Tin, Zinc Arsenic, Lead

Lo

w

(<1p

pm

) Holmium (REM), Lutetium (REM), Tantalum,

Terbium (REM), Thulium (REM)

(theoretically the least

amenable to discovery)

n/a

Antimony, Bismuth, Cadmium, Gold, Indium,

Iridium (PGM), Mercury, Molybdenum, Osmium

(PGM), Palladium (PGM), Platinum (PGM),

Rhenium, Rhodium (PGM), Ruthenium (PGM),

Silver, Tellurium

Lithophile Chalcophile / siderophile and lithophile Chalcophile / siderophile

Ability to concentrate in the crust >


Source: Sykes et al., (2015, in press)

Slide 11 of 21


Some ‘critical metals’ are too difficult to

mine and/or process

Min

ing

co

nstr

ain

ts >

(Mining constrained) n/a

Extraction (mining and processing) constrained:

Dysprosium (REM), Erbium (REM), Holmium

(REM), Lutetium (REM), Tantalum, Terbium

(REM), Thorium, Thulium (REM), Tin, Ytterbium

(REM), Yttrium (REM)

Boron (Borate) Gold, Lithium, Magnesium, Mercury,

Nickel, Silicon (metal), Tungsten

Arsenic, Beryllium, Bismuth, Cerium (REM),

Cobalt, Europium (REM), Gadolinium (REM),

Iridium (PGM), Lanthanum (REM), Lead,

Manganese, Neodymium (REM), Osmium (PGM),

Palladium (PGM), Platinum (PGM),

Praseodymium (REM), Rhodium (PGM),

Ruthenium (PGM), Samarium (REM), Titanium,

Zinc

Not extraction constrained:

Antimony, Barium (Barite), Copper, Niobium

n/a

Processing constrained:

Cadmium, Gallium, Germanium, Indium, Rhenium,

Scandium (REM), Silver, Tellurium, Vanadium

Processing constraints >



Slide 12 of 21


Some ‘critical metals’ lack important or

sufficiently varied uses

Cri

ticality

of

use >

Critically demanded metal:

Dysprosium (REM), Erbium (REM), Europium

(REM), Gadolinium (REM), Gallium, Holmium

(REM), Lutetium (REM), Neodymium (REM),

Palladium (PGM), Praseodymium (REM), Rhodium

(PGM), Samarium (REM), Terbium (REM), Thulium

(REM), Ytterbium (REM)

Cobalt, Germanium, Indium, Iridium (PGM),

Lanthanum (REM), Lithium, Osmium (PGM),

Platinum (PGM), Ruthenium (PGM), Scandium

(REM), Tellurium, Yttrium (REM)

Metal with critical and diverse demand:

Cerium (REM)

Barium (Barite), Chromium, Molybdenum, Niobium,

Rhenium, Strontium

Antimony, Arsenic, Bismuth, Boron (Borate),

Magnesium, Mercury, Silicon (metal), Tantalum,

Thorium, Tungsten

Beryllium, Silver

Metal with limited demand:

Cadmium, Lead

Gold, Nickel, Tin,

Titanium, Vanadium, Zinc

Broadly demanded metal:

Aluminium, Copper

Breadth of use >



Slide 13 of 21


Some ‘critical metals’ have the potential

for transformational market growth Rank Metal Score

1 Antimony 4

n/a Copper 4

n/a Aluminium 3.5

2 Barium (Barite) 3.5

- Germanium 3.5

- Indium 3.5

n/a Silver 3.5

- Tellurium 3.5

- - -

6 Dysprosium (REM) 1.5

- Erbium (REM) 1.5

- Ytterbium (REM) 1.5

- Thorium 1.5

n/a Tin 1

7 Holmium (REM) 1

- Lutetium (REM) 1

- Terbium (REM) 1

- Thulium (REM) 1

- Tantalum 1



Slide 14 of 21


But only a few critical metals can have a

major impact on the wider economy


Ba

B

Cr Co Ga Li

Mg

Ce Sc

Si

Sr La V

Sb

Ge In

Te

As Hg Mo Nb

Ir

Os

Pt

Ru

Be Bi

Pd

Rh

Re

W

Mn

Nd

Y

Cd Eu Gd Pr Sm

Dy

Er Yb Th

Ho Lu Tb Tm Ta

1

10

100

0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

Po

ten

tia

l e

co

no

mic

im

pa

ct

of

tran

sfo

rma

tio

nal m

ark

et

gro

wth

>

Potential for transformational market growth >

Potential for transformational market growth versus the potential economic impact of transformational market growth

High Potential

High Impact

Low Potential

Limited Impact

Low Potential

High Impact

High Potential

Low Impact


Slide 15 of 21


In Summary • ‘Critical metals’ have important uses but are exposed to supply risks, for

which the common solution is to “Reduce, Reuse and Recycle”;

• But their markets are often small and thus they may outgrow their

‘criticality’;

• Despite this ‘critical metals’ market growth has been limited in the last

decade;

• However, aluminium, nickel and uranium are all examples of

transformational market growth at various points in their history;

• Each of these metals benefitted from key mineral discoveries, and supply

and demand breakthroughs to instigate transformational market growth.



The Implications • For transformational market growth to occur amongst a critical metal it likely will be:

– Discoverable: Abundant in the crust & concentrate into discrete deposits;

– Extractable: Simple to mine and to process;

– Useable: Important and broad economic uses;

• All these factors need to be in place for transformational growth to occur;

• Most ‘critical metals’ are discovery and/or supply and/or demand constrained;

• But some critical metals may be nearer economically significant transformational

market growth, than others (Si, Mg, Ba, B, Ga, Co, Sc, Sr, Li, Ce, Cr, V, La)

• For these ‘critical metals’ efforts to reduce ‘criticality’ may be better focused on

growing the supply and market size, rather than trying to reduce demand exposure.



Upcoming publications

• Sykes, J.P., Wright, J.P., & Trench, A., (2015), Discovery,

Supply and Demand: From Metals of Antiquity to Critical

Metals, Applied Earth Science (TIMM B), in press

• Sykes, J.P., Wright, J.P., Trench, A., & Miller, P., (2015), An

assessment of the potential for transformational market

growth amongst the critical metals, Applied Earth Science

(TIMM B), in press



Thank you

AusIMM Third International Future Mining Conference 4th Nov 2015

Contact information:

John P. Sykes:

[email protected]

Joshua Wright:

[email protected]

Allan Trench:

[email protected]

Paul Miller:

[email protected]

Slide 19 of 21

mailto:[email protected]






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