Industrial Minerals Basics: Executive Primer
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Industrial minerals are essential low-value commodities utilized in numerous industrial and domestic applications, including construction, cosmetics, and electronics. The market for these minerals is characterized by a complex supply chain involving exploration, production, processing, and distribution, shaped by factors such as demand drivers and resource availability. Though often overlooked, industrial minerals play a crucial role in modern life and the economy, with a significant portion of the U.S. supply relying on imports.
Industrial Minerals Basics: Executive Primer
- 1. Industrial Minerals Basics Executive Pr mer Mike O’Driscoll Industrial Minerals Consultant © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com
- 2. Mike O’Driscoll Industrial Minerals Consultant Making sense of industrial minerals Experienced ▪ Independent ▪ Insightful Comment ▪ Advice ▪ Research ▪ Analysis www.modriscollminerals.com mike@modriscollminerals.com ▪ +44 (0)1372 450 679 ▪ mobile +44 (0)7985 986 255
- 3. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 1. What are industrial minerals? 2. Why are they so important? 3. How is the market structured? 4. How is the market driven? 5. Summary 6. Which key factors influence success? Key points
- 4. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 1. What are industrial minerals? The generic term industrial minerals is used to define a wide range of individual minerals, and rocks containing minerals, which are exploited for their non-metallurgical value. They possess physical and chemical properties which make good their application in a wide variety of industrial and domestic uses. Without industrial minerals, most of mankind’s material achievements and products, involving the simplest to the most sophisticated methods, would not be possible.
- 5. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 1. What are industrial minerals? Some examples of industrial minerals and their uses: End use markets = heavy & light industry, diverse, global, consumer driven Bauxite Clay Limestone Gypsum Magnesite Potash Sand Talc Abrasives Ceramics Cement Plasterboard Milk of Magnesia Fertiliser Glass Cosmetics
- 6. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 1. What are industrial minerals? In general, industrial minerals are large volume, low value commodities. They are extracted from surface and underground mines. Crude ore undergoes mineral processing (refining) to make the desired grade for sale to the end user. Grades are transported and traded to local, regional, and international markets 6
- 7. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 1. What are industrial minerals? Comparison of mined metallic and non-metallic commodities in the USA 7 Commodity No. mines Output (tonnes) Value (US$m) Gold 50 227 10,200 Silver 42 1,090 84 Copper 27 1,220,000 9,000 Construction sand & gravel 6,600 861,000,000 6,700 Phosphate 11 32,300,000 3,000 Barytes 4 660,000 78 Source: USGS 2013 data Industrial minerals are generally high volume, low value commodities
- 8. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 1. What are industrial minerals? Industrial minerals are processed to refine the mineral to a specific modified form and/or to liberate chemical compound(s) to make an intermediate mineral product, eg. Specific grain size Silica sand Titanium dioxide High brightness; high opacity; surface modified; specific grain size Ilmenite Magnesium oxide Hard; chemically inert; heat resistant; specific grain size Magnesite Specific grain shape & size; surface modified; high brightness Wollastonite
- 9. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 1. What are industrial minerals? Industrial minerals processing may comprise a few simple, or many, and complex stages, eg. Classification Screening Secondary crushing Primary crushing Grinding Drying Filltration Flotation Classification Grinding Drying Screening Secondary crushing Primary crushing Construction aggregates Talc Solvent extraction Reduction/Oxidation Thickening/Filtration Roasting Acid leaching Drying Thickening /Filtration Flotation Chemical conditioning Grinding Screening Primary crushing Rare earths
- 10. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer What are industrial minerals? There are also synthetic industrial minerals processed from natural industrial minerals, such as: Magnesite+Bauxite Spinel Bauxite, kaolin Mullite Lime+Carbon Dioxide Precipitated Calcium Carbonate Quartz+Coke Silicon carbide Limestone+Salt+Coal+Ammonia Soda ash Correct processing is key to producing grade meeting market specifications
- 11. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 1. What are industrial minerals? Metallic/Non-metallic synergies: certain minerals have both metallic and non-metallic value; the dominant market use may hold sway over availability of the mineral for the less dominant value, eg. Mineral Non-metallic use Metallic use Bauxite Abrasives, refractories Aluminium metal Chromite Foundry, chemicals Chrome, Ferrochrome Lithium Ceramics, glass, batteries Lithium metal Magnesite Chemicals, refractories Magnesium metal Manganese Batteries, pigments Manganese metal Quartz Glass, ceramics Silicon metal Rutile White pigment Titanium metal Zircon Ceramics, refractories Zirconium metal
- 12. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? In spite of their necessity to modern industry and living, industrial minerals compared with other mined commodities, such as precious and base metals, have sometimes been described as “unglamorous”, “rubble”, and even “the third world of the mining industry”! But without industrial minerals, our world would be much, much poorer See the next two slides for two simple examples highlighting industrial minerals in our world: by seeing what is in a typical house, and the average lifetime requirements of a human.
- 13. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? 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, “White” goods silicon carbide, kaolin 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, fedlspar, 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
- 14. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? Magnetite used in coal washing Refractory and flux minerals required to smelt metals Flux minerals and clay required for iron ore pelletising Oilfield minerals required to extract oil and gas Source: Original baby schematic Mineral Information Institute www.mii.org Average lifetime requirements for each person born in the USA
- 15. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? Assessing the industrial minerals business can be confusing, since each mineral can serve up to 4-20+ different markets, and 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!
- 16. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? Source: Original baby schematic Mineral Information Institute www.mii.org Summary of major industrial minerals markets Industrial mineral uses vary widely; minerals serve multiple markets Abrasives Filtration Absorbents Flame retardants Adhesives/sealants Foundry Animal Feed Glass Batteries Insulation Catalysts Metallurgy Cement Nanomaterials Ceramics Oil/gas drilling Chemicals Paint Construction Paper Cosmetics Pigments Electronics Plastics Environmental Refractories Fertiliser Welding
- 17. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? Industrial minerals $42.3m 37% Metalllic minerals $31.9m 28% Coal $9.8m 35% Industrial minerals account for the largest sector of US mine production by value Source: USGS 2013 data
- 18. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? The USA relies on significant industrial mineral imports Source: USGS 2013 data 100% 70- 100% 40- 70% 20- 40% Asbestos Canada, Brazil Bauxite & Alumina Jamaica, Brazil, Guinea, Australia Fluorspar Mexico, China, S. Africa, Mongolia Graphite China, Mexico, Canada, Brazil Mica China, Brazil, Belgium, India Quartz crystal China, Japan, Russia Scandium China Strontium Mexico, Germany, China Yttrium China, Japan, Austria, France Iodine Chile, Japan Diamonds China, Ireland, Rep. of Korea, Romania Antimony China, Mexico, Belgium, Bolivia Potash Canada, Russia, Israel, Chile Titanium minerals S. Africa, Australia, Canada,Mozambique Garnet Australia, India, China Barytes China, India, Morocco Silicon Carbide China, S. Africa, Netherlands, Romania Vermiculite South Africa, China, Brazil Salt Canada, Chile, Mexico, The Bahamas Perlite Greece Chromium South Africa, Kazakhstan, Russia, Mexico Magnesia China, Brazil, Canada, Australia
- 19. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? Several organisations are researching and evaluating the supply risk and “criticality” of minerals deemed essential to the performance of state and regional industries, eg. Industrial minerals are economically important, and in some cases have strategic value, but this will be relative to the end user market dynamics
- 20. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 2. Why are industrial minerals so important? Owing to the scarcity of resources and supply issues, certain industrial minerals are considered “critical” to industries eg. European Commission Raw Materials Initiative Heavy rare earths Light rare earths Natural graphite Magnesite Fluorspar Phosphate Borate Barytes CRITICAL NOT CRITICAL Potash Diatomite Bentonite, Perlite, Clays, Feldspar, Talc Lithium, Gypsum, Silica sand, Limestone Economic importance Supply risk Source: Original chart European Commission
- 21. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 3. How is the market structured? The industrial minerals market is structured on the supply chain of the mineral product from 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 Ilmenite/rutile Titanium dioxide TiO2 pigment production Paint production Automobiles Abrasive grade bauxite Brown fused alumina Refractories production Steel production Shipping In general Some basic examples
- 22. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 3. How is the market structured? Industrial mineral supply chains can be simplified into three key business tiers which encompass the entire industrial minerals market structure. SUPPLY LOGISTICS MARKET Direction of supply Direction of demand
- 23. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 3. How is the market structured? 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 Finance Engineering Production Processing Each industrial mineral has its own specific supply chain characteristics
- 24. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 3. How is the market structured? Each tier hosts sectors with different functions and priorities. Developer •Exploration •Evaluates markets •Secures reserves •Develops project •Pilot plant •Not in commercial production •Raising finance & profile Producer •Mine & plant operator •Sells to existing and pursues new markets •May sell crude ore to processor •Seeks new reserves/facilities •Close contact with consumers and/or processors Processor •No mine or reserves •Operates plant to process crude or semi-processed minerals imported from producer for trader, consumer, self, or combination •Sells to existing and pursues new markets/clients Processing plant supplier •Develops & manufactures processing innovations and plant equipment •Sells to producers and processors •Tracks market trends •Close support with clients SUPPLY
- 25. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 3. How is the market structured? Each tier hosts sectors with different functions and priorities. Logistics organisation • Sells services to deliver mineral from mine to market • All transport modes • Port handling • Warehousing • Distribution • Seeks optimum logistics solutions and systems • Develops logistics innovations • Close support with producers, processors, traders, & consumers • Tracks market trends Trader • Facilitates mineral supply to consumer • Absorbs risks of supply chain issues • Trading • Marketing/Promotion • Distribution • Processing • Logistics/Inspection • Seeks new and alternative supply sources for consumers • Close support with producers & consumers • Tracks market trends Inspector • Quality control experts • Hired by producers to inspect mineral grades • Hired by traders, processors,& consumers to inspect contracted shipments at loading and discharge • Seeks new and diverse clients LOGISTICS
- 26. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 3. How is the market structured? Each tier hosts sectors with different functions and priorities. Consumer • Buys minerals for manufacturing intermediate product or for direct end use • Seeks long term security of low cost, high quality mineral sources • Consistent mineral availability, quality, & price is paramount • May source direct or use traders and/or processors • Seeks new and alternative mineral sources • Mineral demand by volume, type, and grade influenced by their customers’ demand • Close co-operation with producers, traders, processors, logistics MARKET
- 27. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 4. How is the market driven? “Without a market, an industrial mineral deposit is merely a geological curiosity”
- 28. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 4. How is the market driven? To have any value, and any potential for development, an industrial mineral source must be able to economically deliver an acceptable product to a market in demand. As seen earlier, industrial minerals are absolutely essential for markets manufacturing all kinds of products. Thus, the performance of the mineral consuming market drives industrial mineral demand. No market = no mineral demand = no market development
- 29. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 4. How is the market driven? Industrial mineral market trends are shaped by: 1. Primary demand drivers which impact the overall market performance in a state or region • Economy • Population • Development Primary demand drivers
- 30. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 4. How is the market driven? Industrial mineral market trends are shaped by: 2. Key influencing factors specific to the trade of minerals, markets, and regions • Resource-market proximity • Specific market demand trends • Limited resource distribution • Reliance on imports • China • Pricing • Logistics • World events Key influencing factors
- 31. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 4. How is the market driven? Influencing factor example: China Remains a significant supplier of minerals to world markets, as well as a growing mineral consumer Rare earths 97% Refractory bauxite 95% Fused magnesia 85% Graphite 80% Mica (scrap/flake) 69% Wollastonite 59% Brown fused alumina 55% Silicon carbide 55% Fluorspar 53% Barytes 48% Dead burned magnesia 45% Talc 30% Vermiculite 22% Share of global production
- 32. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 4. How is the market driven? Influencing factor example: Pricing Industrial minerals pricing is opaque, there is no exchange. Apart from a few minerals, there is no formal listing of prices. Pricing contracts are often long term Prices are influenced by a range of factors Price US$/t Quality Volume Processing Packaging Inspection Logistics Insurance Duties Currency Market Relation-ships
- 33. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 4. How is the market driven? Influencing factor example: Logistics Logistics is one of the most important components of any industrial mineral project, and one that is most often overlooked, it can make or break it. Source: Logsitics graphic Santini, Barker, & Bentzen 2006 Mine to market logistics embraces many stages. The cost of logistics can account for up to 70% of the final delivered mineral price to market.
- 34. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 5. Summary The main characteristics of the industrial minerals market High volume, low value commodities Used in a wide variety of industrial and domestic uses = fragmented market Of economic, sometimes strategic, importance, essential to modern manufacturing and living Certain industrial minerals have synergies and influence with metals markets Minerals may be classified or grouped by the markets they serve, but… Minerals supply multiple markets, each with different requirements and dynamics Supply chain structure is built on three broad business tiers: supply, logistics, and market Processing is key to meet market specifications, different markets require different grades Logistics account for a large share of the final delivered price of the mineral Industrial minerals are market driven: no market = no demand = no mineral development Market performance is influenced by primary economic drivers and specific factors Industrial mineral pricing is opaque, specific to markets and buyer/seller relationships
- 35. © Mike O’Driscoll 2014 ▪ www.modriscollminerals.com Industrial Minerals Basics Executive Primer 6. Which key factors influence success? Reserves • High quality, sufficient volume Marketable grade • Mineral must meet market specifications Market demand • Essential to have market & knowledge of it Financing • Funding for all aspects of project Processing • Ensure correct and complete process route Logistics • Secure optimum logistics system & routes Flexibility • Awareness to diversify products & markets In no particular order, they all have top priority:
- 36. Mike O’Driscoll Industrial Minerals Consultant Thank you for your attention. If you have any questions or comments about this briefing, or would like more information, please contact. www.modriscollminerals.com T: +44 (0)1372 450 679 M: +44 (0)7985 986 255 mike@modriscollminerals.com Industrial Minerals Basics Executive Pr mer