refractory minerals outlook: minerals matter

$: Refractory Minerals Outlook: Minerals Matter$
Minerals Matter

Refractory raw material

supply trends and developments

Networking and knowledge for the industrial minerals business

http://imformed.com/

• Launched in January 2015

Mike O’Driscoll Ismene Clarke

• Extensive experience & reputation

• Specialist conferences

• Market research


AT A GLANCE

A-Z GUIDE

WHICH MINERALS

FOR WHICH

MARKETS

• Leading industrial minerals

• Main raw material feedstock

• Key specified chemical component

• World production

• Main source countries

• Leading consuming markets

For a copy of the Mineral Market Matrix® Wall

Chart, please contact:

Ismene Clarke | [email protected]

+44 (0)7905 771 494 Please note: postage charges will apply


mailto:[email protected]

[email protected] ▪ +44 (0)1372 450 679 ▪ mobile +44 (0)7985 986 255

Upcoming conferences


http://imformed.com/get-imformed/forums/magforum-2016/

http://imformed.com/get-imformed/forums/mineral-logistics-forum-2016/

http://imformed.com/get-imformed/forums/mineral-recycling-forum-2016/

[email protected] ▪ +44 (0)1372 450 679 ▪ mobile +44 (0)7985 986 255

Speakers confirmed so far:

Minerals recovery from secondary raw materials

Nenad Tenasic, Managing Director, Horn GmbH & Co. KG,

Germany

Recycling refractories from an end user’s viewpoint

Werner Odreitz, Purchasing Director, Secondary Raw

Materials, RHI AG, Austria

Recycling of spent refractories

Melvyn Bradley, Technical Director, LKAB Minerals Ltd, UK

Laser-Induced Breakdown Spectroscopy (LIBS) in

recycling of refractory material outbreak

Dr Christian Bohling, Chief Executive Officer, Secopta GmbH,

Germany

Alumina from aluminium salt slag

Howard Epstein, Technical Consultant, RVA, France

Cenospheres from fly ash: development and markets

Erwin Grossman, Head of Sales, Mine Feuerfest GmbH,

Germany

http://imformed.com/get-imformed/forums/mineral-recycling-forum-2016/

Outline

1. Big Picture: industrial minerals and the supply chain

2. Refractory minerals overview

3. Refractory minerals focus: • Magnesia

• Graphite

• Bauxite

• Andalusite

4. Conclusions & Outlook

Minerals Matter Refractory mineral supply & demand

©IMFORMED 2015 | imformed.com



Dr. Andus Buhr, UNITECR 2015 Keynote Speaker

Global Technical Director Refractories, Almatis GmbH

“Refractories are the tools for steelmaking”

“Minerals are the ‘DNA’ or building blocks of refractories”

Mike O’Driscoll, UNITECR 2015 Raw Materials Speaker

Director, IMFORMED



“industrial minerals” = a wide range of natural minerals, rocks,

derivatives, and synthetic minerals, exploited for their non-

metallurgical value.

1. Industrial minerals & the supply chain

Physical and chemical properties make good their application in

a wide variety of industrial and domestic uses – and refractories

is one of the most important.

Without industrial minerals, most of mankind’s material

achievements and products, involving the simplest to the most

sophisticated methods, would not be possible.

In general, industrial minerals are large volume, low value

commodities.

Market driven: “Without a market, a mineral deposit is merely a

geological curiosity” Peter Harben , Consultant

Roofing materials

kaolin, iron oxide,

talc, calcium

carbonate, feldspar

Ceramics

silica sand, talc, calcium

carbonate, feldspar, kaolin,

wollastonite, zircon

Cosmetics/Pharma

talc, diatomite,

silica, magnesia,

bentonite, kaolin,

mica, calcium

carbonate, fluorspar,

soda ash, borates,

iodine, lithium

Solar cells

quartz, fused

silica, silicon

carbide, fluorspar,

wollastonite, talc

Insulation

kaolin, bauxite, alumina, dolomite,

basalt, silica sand, soda ash, borates,

calcium carbonate, vermiculite, perlite,

diatomite

Wallboard

gypsum

Paper

kaolin, talc, calcium

carbonate, TiO2

Computer/IT devices

rare earths, alumina

trihydrate, magnesium

hydroxide, talc, calcium

carbonate, quartz,

lithium, graphite

Source: Original house schematic Pinkpig

Paint

talc, kaolin, calcium carbonate,

barite, TiO2, wollastonite, mica,

iron oxide, diatomite, feldspar,

syenite

Light bulbs

silica sand,

fused silica,

quartz, rare

earths, soda ash,

calcium

carbonate

Cat litter

bentonite, attapulgite,

diatomite, zeolite,

sepiolite

Saucepans – ALL metal/steel items

flux minerals: bauxite, olivine, lime,

wollastonite

refractory minerals: alumina,

bauxite, graphite, andalusite, fused

alumina, magnesia, zircon, spinel,

chromite, silicon carbide, kaolin “White” goods

talc, calcium

carbonate,

kaolin,

wollastonite

Oven/water heater/boiler

refractory minerals

Detergent

soda ash,

borates

Refrigerants

fluorspar

DIY tools

silica sand,

fused alumina,

silicon carbide

Automobile (+ ALL plastics)

plastics/rubber: talc, calcium

carbonate, wollastonite, kaolin,

mica, silica sand, alumina,

barite, trihydrate, magnesium

hydroxide

glass: soda ash, calcium

carbonate, silica sand, borates,

kaolin, lithium

engine: rare earths, graphite,

lithium, talc, borates

Bricks, mortar,

cement

kaolin, gypsum,

silica sand,

calcium carbonate,

bauxite, iron oxide

Carpet backing

barite, talc, calcium

carbonate, kaolin

Glass

silica sand, calcium

carbonate, soda ash,

feldspar, syenite,

borates, fluorspar, lithium

TV/DVD

rare earths, borates,

lithium, graphite, quartz

Lightweight construction

materials

diatomite, perlite,

vermiculite

Garden

potash, phosphates,

sulphur, nitrates,

borates, vermiculite,

perlite

House of Minerals




a fragmented business

each mineral can serve up to 4-20+ different markets

each market can demand a range of different minerals, eg.

Talc Paper

Plastics

Ceramics

Glass

Refractories

Chemicals

Borates

Rare earths

Magnesite

Kaolin

Silica

The World Wide Mineral Web!




C

O

M

P

E

T

I

T

I

O

N



Mineral processing: crude ore desired grade for end user

Simple to sophisticated methods depending on: quality, end use


Screening

Drying

Washing

Crushing

Silica sand

Screening

Grinding

High temp. calcination

Briquetting

Low temp. calcination

Flotation

Washing

Screening

Crushing

Dead burned magnesia




Market structure defined by supply chain of mine to market.

Mined & processed

mineral grade

Intermediate mineral product

Intermediate mineral market

End user market

Ultimate end user market

Silica sand

Glass production

Construction

Abrasive grade bauxite

Brown fused alumina

Refractories production

Steel production

Ship building

In general Basic examples



Supply chain = three key tiers (market sectors)


SUPPLY

LOGISTICS

MARKET

Direction

of supply Direction

of demand

These three tiers host a range of functional sectors.

MARKET

Direct market Intermediate market End market

LOGISTICS

Trading Processing Transport Inspection Stevedoring Storage Distribution

SUPPLY

Exploration Development Engineering Production Processing







Market trends shaped by:

• Economy

• Population

• Development

Primary demand drivers

• Resource-market proximity

• Specific market demand trends

• Limited resource distribution

• Reliance on imports

• China

• Pricing

• Logistics

• World events

Specific influencing factors

Influencing factor example: China

Remains a significant supplier of minerals to world markets,

as well as a growing (stalled!) mineral consumer

Rare earths 97%

Refractory bauxite 95%

Fused magnesia 81%

Mica (scrap/flake) 69%

Flake graphite 61%

Wollastonite 59%

Brown fused alumina 55%

Silicon carbide 55%

Fluorspar 53%

Barytes 48%

Dead burned magnesia 44%

Talc 30%

Vermiculite 22%

Share of global production

© IMFORMED 2015 ▪ www.imformed.com



Influencing factor

example: Pricing

• Opaque; there is no

exchange.

• Apart from a few

minerals, there is no

formal listing of prices.

• Pricing contracts are

often long term

• Prices influenced by a

range of factors

Price

US$/t

Quality

Volume

Processing

Packaging

Inspection

Insurance Logistics

Duties

Currency

Market

Relation-ships




Influencing factor example: Logistics

Vital, and most often overlooked; can make or break a mineral source

Source: Logistics graphic Santini, Barker, & Bentzen 2006

• Mine to market =

many stages,

many modes.

• Costs can account

for up to 70% of

final delivered

mineral price to

market.







39 7%

35 7%

33 6%

32 6%

32 6%

30 6%

25 5%

25 5% 24

5%

24 5%

23 4%

21 4%

19 4%

19 4%

18 3%

17 3%

16 3%

15 3%

13 2%

12 2%

11 2%

10 2%

10 2%

9 2%

8 2%

7 1%

Ceramics

Chemicals

Metallurgy

Agrimarkets

Paint/Pigments

Food/Pharma

Construction

Glass

Plastics/Polymers

REFRACTORIES

Abrasives

Oilfield drilling

Cement

Environment

Paper

Rubber

Cosmetics

Foundry

Welding

Electronics/Electrical

Flame retardants

Detergents

Filtration/Clarification

Absorbents

Friction

Batteries

“Kaleidoscope”

Refractories ranked 10th (of 26) most important market

Consumes 38.7% (24) of main industrial minerals (total 62)

≥30

≥20

REFRACTORIES

Total number

of minerals

used in each

market




Raw materials Refractories Refractory markets

Approx. cost Raw materials 40-50% Refractories <2%

Bricks Steel (58-70%) 10-15kg/t

Ladle

70t 1 month

Nonferrous metal 3kg/t

Copper kiln

150t 3 months

Monolithics

Cement 1kg/t

Rotary kiln

250t 10 months Precast parts

Glass Melt furnace

4kg/t

500-8,500t 10 yr




Iron & steel dominates refractories market

Steel 58%

Cement/Lime 17%

Ferrous 4%

Non-ferrous 4%

Glass 3%

Incineration 2%

Chemical 1%

Ceramics 1%

Others 6%

Unknown 4%

Source: PRE 2014

2013 EU refractory market

2.9m tonnes

Iron/Steel 73% Cement/Lime

13%

Non-ferrous 4.5%

EEC 4%

Glass 2.5%

Ceramics 2%

Other 1.5%

Source: Roskill 2014

EEC environment/energy/chemicals

2013 World refractory market

38.6m tonnes



2. Refractory minerals overview Refractory classification

Industrial mineral (incl. synthetic)

Main chemical component Primary source country

BASIC

Dead burned magnesia 85-99.8% MgO China

Fused magnesia 97-99.8% MgO China

Dead burned dolomite 56-62% MgO, 36-40% CaO USA

Chromite >46% Cr2O3 South Africa

Sintered/fused spinel 66-80% Al2O3, 21-33% MgO China

Olivine 40-50% MgO, 35-45% SiO2 Norway

ACIDIC

High alumina

Low alumina

Silica

Calcined alumina >99.5% Al2O3 China

Fused alumina 94-99.5% Al2O3 China

Calcined bauxite 85-88% Al2O3 China

Sintered/fused mullite 40-75% Al2O3 USA

Andalusite, sillimanite, kyanite 60-65% Al2O3 South Africa

Refractory clays 20-45% Al2O3 China

Pyrophyllite 20-30% Al2O3 South Korea

Quartzite, silica sand >97% SiO2 Regional

Fused silica >99.8% SiO2 USA

SPECIALISED

Zircon 66% ZrO2+HfO2 Australia

Zirconia >99% ZrO2 China

Silicon carbide >93% SiC China

Graphite 75-99% C China

INSULATING

Diatomite >75% SiO2 USA

Perlite 65-80% SiO2 China

Vermiculite 45% SiO2 South Africa

AUSTRALIA

DBM, FM

Zircon

JAPAN

Syn. DBM

CHINA

DBM, FM

Bauxite

Aluminas

SiC

Graphite

Spinel

Mullite

Zirconia

SOUTH AFRICA

Andalusite

Chromite

Zircon

RUSSIA/CIS

DBM, FM

Aluminas

SiC

EUROPE

DBM, FM

Aluminas

Bauxite

SiC

Andalusite

Spinel

Olivine

Dolomite MEXICO

Syn. DBM, FM

GUYANA

Bauxite

BRAZIL

DBM

Graphite

SiC

INDIA

Graphite

USA

Mullite

Spinel

Dolomite



PERU

Andalusite

CANADA

Graphite

Comparison of prices for refractory minerals World distribution of primary established sources of main minerals


Mineral producer (own mine)

Mineral processor/distributor

Refractory manufacturer

End user market

Mineral trader

Trad. Captive Direct Captive Recycling

route processing buy production

Exploration, reserves, mining,

processing

Sourcing, logistics, financing

Sourcing, processing, storage,

logistics

Sourcing, processing, storage,

logistics, formulating, application

End use application eg. steel, glass manufacture



Supply chain options for

raw material supply





Vertical integration: for some, but not others • RHI purchases ~800,000 tpa refractory raw materials

• 80% integration with recent years’ acquisitions

Source: RHI




0 500 1000 1500

Chromite

Bauxite

Andalusite

Kyanite

DBM/FM

Mullite

BFA

WFA

Spinel

Graphite

SiC

Zircon

US$/tonne

Min

era

ls

Comparison of ball-park price ranges for refractory minerals




Trend in refractory mineral price index 2007-15 (2007 = 100)

50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013 2014 Q115 Q215 Q315 Q415

Tabular Alumina

Bauxite

WFA

BFA

SiC

Fused Magnesia

Dead Burned Magnesia

Zircon

Andalusite

Source: RHI




0

2000

4000

6000

8000

10000

12000

14000

16000

18000

'000 t

on

nes

Source: Ted Dickson & Richard Flook 2014

Estimated world consumption of refractory minerals: total ~35m tonnes




Source: Roskill, Richard Flook 2014

Declining specific consumption of refractories in steel production




Japan’s refractory raw material consumption

Source: adapted from Japan Refractories Assoc.

‘000 tonnes ‘000 tonnes

DBM 23%

Fused alumina

12%

Others 8%

Other clay 7%

Recycled bricks

6%

Chinese bauxite

6%

Pyrophyllite 5%

Sintered alumina

5%

FM 5%

Calcined flint clay 4%

SiC 4%

Alumina cement Calcined aluminaBauxite GraphiteSpinel Zircon, ZirconiaMullite Sillimanite, KyaniteSilica ChromiteFused silica

<4%

2014 902,600 tonnes

Mullite +56.6% 11,600 t

Spinel +16.5% 13,400 t

Chinese bauxite +12.0% 54,500 t

Sintered alumina -10.3% 43,600 t

Calcined alumina -26.7% 21,600 t

Zircon -40.0% 13,200 t

Pyrophyllite -11.6% 48,500 t

Brick waste -16.7% 56,700 t

860

870

880

890

900

910

920

930

940

950

1020

1030

1040

1050

1060

1070

1080

1090

1100

1110

1120

2010 2011 2012 2013 2014

Refractories

Refractory minerals



3. Refractory minerals focus: Magnesia supply ~8-10m tpa

Netherlands 36%

USA 16%

Ireland 16%

Mexico 13%

Japan 12%

S. Korea 7%

Synthetic DBM 568,000 t

China (23 >100k tpa) 44%

Russia (2) 17%

Turkey (3) 9%

Slovakia (2) 7%

Brazil 6%

Austria 5%

India (12) 3%

Australia 2%

Natural DBM 6.2m t

Greece N. Korea

Spain Iran

Serbia Saudi Arabia

<1%

Single/few producers

China supply dominant

2014 exports: 663,200 DBM

369,200 FM

Integrated/Captive

Source: Industry sources; USGS data

China 81%

Russia 10%

N. Korea 2%

Turkey 2%

Australia 2%

Norway 2% S. Korea

1% FM

1.9m t

DBM 78%

FM 22%



3. Refractory minerals focus: Magnesia trends

Vertical integration: RHI, Magnesita,

Magnezit, Kumas

Capacity expansions: Magnezit, Kumas

(DBM, FM)

China • Slowdown = declining output, closures, prices at production cost, stockpiles

• Electricity cost cut 0.018RMB(US$0.00283)/kWh

• Overcapacity by >200%: DBM 11m tpa; FM 3.6m tpa

• Consolidation & environmental control of Liaoning industry

• North East Asia Magnesia Materials Trading Center

Magnesitas Navarras new mine at

Borobia, Spain June 2015

Interest in consumers sourcing ex-China alternatives

Interest in producers diversifying eg. Nedmag, Terna Mag



3. Refractory minerals focus: Magnesia trends

New source potential:

Greece: Evia, Terna Mag, (DBM 2016)?

Jordan: Al-Safi, Jormag (DBM)?

Turkey: Kaltun Mining? TurkMag (DBM)?

Saudi Arabia: Zarghat, Ma’aden (DBM?)

Russia: eastern regions Krasnoyarsk Krai, Irkutsk Oblast, Jewish AO

Canada: Driftwood Creek, BC, MGX Minerals (end-2016 DBM/FM?)

Timmins Talc Magnesite Project, Deloro,ON, Globex Mining

Australia: Arthur River, Tasmania, Beacon Hill Resources

Bandalup, WA, BMAG

Huandot, NT, Thessaly Resources (DBM?)

Leigh Creek, SA, Archer Exploration

Winchester, NT, Korab Resources



3. Refractory minerals focus: Graphite supply

Source: Benchmark Mineral Intelligence

Flake 59% Amorphous

40%

Vein 1%

Natural graphite production 650,000 tpa

China 60% Brazil

24%

India 5%

Norway 3%

Russia 3% Other

5%

Flake graphite production 383,500 tpa

Refractories 29%

Foundries & crucibles

22%

Batteries 19%

Specialist 12%

Lubricants 11%

Other 7%

Graphite market



3. Refractory minerals focus: Graphite trends

China • Future supply at risk through

consolidation - Heilongjiang,

Shandong

• 2015 severe winter prolonged

restarts

• Modernisation

• Environmental controls

• Added value industries to consume

more domestically (+ Asia/Japan)

• Reduction of graphite exports

Brazil/India: domestic focus, few if

any new sources/expansions




Future demand conflict: rise of Li-ion battery market using 100# FG

will impact FG demand for refractory and foundry markets

Tesla Motors Inc. Gigafactory, Nevada

500,000 units 2020 = 100,000 t FG

Refractories 29%


22% Batteries 19%

Specialist 12%

Lubricants 11%

Other 7%

2015

Refractories 39%


28%

Specialist 10%

Batteries 9%

Lubricants 9%

Other 5%

2012

Source: Benchmark Mineral Intelligence




New source potential:

High interest in ex-China

sources

Country Company Project

Australia Archer Exploration

Campoona & Wilclo

South

Buxton Resources Yalbra

Lamboo Resources McIntosh

Lincoln Minerals Kookaburra Gully

Valence Industries Uley

Brazil Magnesita Refratarios Almenara

Sayona Mining Itabela

Canada Focus Graphite Lac Knife

Mason Graphite Lac Guéret

Northern Graphite Bissett Creek

Ontario Graphite Kearney

Madagascar Energizer Molo

Stratmin Loharano

Malawi Sovereign Metals Duwi

Mozambique Syrah Resources Balama

Triton Minerals Nicanda Hill

Russia Dalgraphite/Donkarb Soyuznoye

Sweden Flinders Resources Woxna

Talga Resources Nunasvaara

Tanzania IMX Resources Chilalo

Kibaran Resources Epanko

Magnis Resources Nachu

USA Alabama Graphite Coosa

Graphite One Graphite Creek

• Production started

• Aug 2015: TKMet 20,000

tpa refractory graphite

offtake deal with Kibaran;

on stream 2017

• July 2015: Valence signs

3yr US$50m offtake deal

with A-P consumer

• ~150 projects in Canada

& Australia!



3. Refractory minerals focus: Bauxite supply

Refractory consumption • 1.4m t calcined bauxite

• 1.6m t brown fused alumina (from

1.4m t abrasive grade bauxite)

Refractories 28%

Cement 22%

Abrasives 22%

Chemicals 8%

Slag conditioning

9%

Proppants 10%

Other 1%

Non-met. bauxite market 10m tonnes

China 77%

Guyana 6%

India 7%

Russia 9%

Brazil 1%

Refractory grade bauxite production

• Traded globally

• Chinese owned



3. Refractory minerals focus: Bauxite trends

China • Market is “dismal”; many plants not

operating with calcined bauxite/BFA

demand down for refractories

• Environmental measures have

restricted/closed mine and plant

capacities over last few years

• Closures in 2014 owing to higher

operating costs and market downturn

• Overall, excess capacity available, some

consolidation in future.

• Demand from smelter grade alumina

sector always a threat, especially with

reduced imports of met. grade bauxite,

eg. from Indonesia




Guyana • Bosai Minerals:

− 2014/15 reduced to using one kiln

− RASC grade sales down 16% from 2012

to 177,009 tonnes in 2014 (chemical -

49%; cement -80%);

− July 2015 shutdown kilns #13 and #14;

shift hours reduced/strikes

Greece: • 2012 Kerneos 54% stake in Elmin

(500,000 tpa)

• Feb 2015: Kerneos/Elmin buy S&B

Greek bauxite assets (sales 1m tpa)




Brazil • 2012 Imerys buys bauxite reserves in Pará, Brazil from Vale (ex-MSL

Minerais)

Guyana • First Bauxite:

− June 2015 modified strategy to

develop proppant grades

− 158,000 tpa calcining plant in

Port of South Louisiana, USA

USA • June 2015: Shanxi Fangxing Minerals acquired Imerys’

Newell, WV plant for bauxite/BFA



3. Refractory minerals focus: Andalusite supply & trends

Imerys, South Africa 36%

Imerys, France 21%

Imerys, China 3%

Andalusite Resources, South Africa

24%

Andalucita, Peru 11%

Rest of China 5%

Andalusite production 315,000 tonnes

60% Imerys

Elsewhere: • Imerys unexploited reserves in

Peru; “5%” of Paita deposit

• Latin Resources Ltd,

Guadalupito andalusite/mineral

sands project in northern Peru

Imerys bid to acquire Andalusite

Resources • Blocked April 2015: SA

Competition Commission

“would have created a

monopoly”

• Imerys appeal ongoing H2 2015



Minerals: do matter, vital to refractory market; supply chains must be understood,

with awareness of limited sources and appreciation of competing markets

Current status: a buyers market, demand flat, prices down for 2015/early

2016; but a chance to seek/assess new sources before recovery? Current low

prices a barrier to new project development.


Refractory market drivers: key to mineral demand; despite declining SRC long

term (slow) growth assured with steel production increase to 2bn tonnes by

2025, 4.9% CAGR ex-China, driven by India (14.1%).

Refractories: higher purity steels = more synthetic minerals, aluminas, less C.


Substitution/Recycling: formulations EU-mineral based; increased interest in

recycling as more mainstream raw material source; emerging processors specific

to recycling; negligble impact to primary sources at present, but this will change

China: consolidation likely to reduce number of operations, but quality should

be unaffected; while supply concerns may have eased, still a drive to secure

alternatives; lasting impact of downturn on producers forced to close/reduce

capacity may bolster ex-China mineral projects

Iran: sanctions lifted; opportunities for new supply sources & target markets

Vertical integration: large integrated groups will continue to invest in mineral

sources; perhaps more consolidation in future



Please contact me with any questions or comments, or for more information.

[email protected] | +44 (0)1372 450 679 | mobile +44 (0)7985 986 255


Thank you for your attention

See you in Vienna next year…

mailto:[email protected]


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