Which markets are the future stars of the critical metals industry - Sykes et al - Nov 2015 - Greenfields Research / Centre for Exploration Targeting / Curtin University / The University of Western Australia

WHICH MARKETS ARE THE
FUTURE STARS OF THE ‘CRITICAL
METALS’ INDUSTRY?
John P. Sykes123*, Joshua P. Wright4, Allan Trench125 and Paul Miller6
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: john.sykes@greenfieldsresearch.com
4. Rowton Consolidated, Chester, UK. Email: joshua.wright@rowton-ltd.com
5. CRU Group, London, UK. Email: allan.trench@crugroup.com
6. Sulphide Resource Processing, Perth, Australia. Email: srp_info@mail.com
* Today’s speaker
Argus Media-Metal Pages China Metals Week, Guangzhou, China: 18th November 2015

Argus Media-Metal Pages China Metals Week
Key questions
• What is a critical metal and what are the common solutions for
resolving ‘criticality’?
• Is transformational growth 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?
18th Nov 2015
Which markets are the future stars of the
'critical metals' industry?
Slide 2 of 21

‘Critical metals’ have important uses but
are exposed to supply risks
18th Nov 2015
Source: USDOE (2011)
Transportation
Communications
Electronics
Batteries
Military
Renewables
Slide 3 of 21

Which are the ‘critical metals’?
18th Nov 2015Slide 4 of 39
Antimony Arsenic Barium Beryllium Bismuth Boron Cadmium Cerium Chromium
Cobalt Dysprosium Erbium Europium Gadolinium
Gallium Germanium Holmium Indium Iridium
Lanthanum Lithium Lutetium Magnesium Manganese Mercury
Molybdenum Neodymium Niobium Osmium Palladium
Platinum Group Metals Platinum Praseodymium
Rare Earth Metals Rhenium Rhodium Ruthenium
Samarium Scandium Silicon Silver Strontium Tantalum Terbium
Tellurium Thorium Thulium Tungsten Vanadium Ytterbium Yttrium

The common solution to ‘criticality’ is to
“Reduce, Reuse and Recycle”
18th Nov 2015
Source: USDOE (2011)
Geopolitics
Environment
Shortage
Sustainability
Slide 5 of 21

But their markets are often small and
thus they may outgrow their ‘criticality’
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Copper
Gold
Alumnium
Zinc
Manganese
Nickel
Chromium
Silicon(metal)
Silver
Lead
PGMs
Tin
Molybdenum
Uranium
Magnesium
Tungsten
Cobalt
Lithium
Boron(Borate)
REMs
Vanadium
Titanium(MS)
Antimony
Barium(Barite)
Niobium
Indium
Germanium
Tantalum
Thorium
Gallium
Strontium
Bismuth
Rhenium
Beryllium
Mercury
Cadmium
Arsenic
Tellurium
Metals market by size (US$ 2013 millions)
18th Nov 2015
Source: Sykes et al., (2016, in press); USGS (2014)
Slide 6 of 21
Most critical metals markets barely
register in terms of scale

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%
18th Nov 2015
0
100
200
300
400
500
600
700
Growth of metal market groups
2004-13 (US$ billions)
Industrial Non-Ferrous Precious Critical
Slide 7 of 21

So what causes
transformational growth in
metals markets?
18th Nov 2015
Slide 8 of 39

The origins of mining are in the search
for ‘better’ not ‘more’ resources
• Origins of mining 400,000 – 200,000
years ago;
• Cosmogenic beryllium levels indicate
flint sourced at 2m+ depth;
• Although flint is abundant at surface,
it is weathered and low quality;
• Unweathered flint at depth was
higher quality making better tools;
• Unweathered flint deposits
therefore had to be ‘discovered’ and
‘mined’ before the flint could be
‘used’
• Verri et al., 2005, Flint procurement strategies in the Late Lower
Palaeolithic recorded by in situ produced cosmogenic 10Be in Tabun and
Qesem Caves (Israel), Journal of Archaeological Science, 32, 207-213
• Also: Sykes et al., (2016), in press.
18th Nov 2015
Slide 9 of 39

Economic growth is partly defined by the
search for better mineral resources
Stone Age Bronze Age Iron Age
Age of Exploration
(Gold Rushes)
Industrial Age
(Plus more gold rushes)
Modern Age

…but nonetheless limited to only a few
‘Metals of Antiquity’
18th Nov 2015
Cu Pre-Bronze Age (Pre-3,500 BCE)
Sn Bronze & Iron Ages (3,500-1 CE)
C
Fe Cu
Ag
Au Pb
Cr As
S
Zn
Hg
Sn Sb
Al Renaissance & Industrial Age (1669-1913 CE)
H
Li
Na
K
Rb
Cs
La
Ac
Be
Mg
Ca
Sr
Ba
Sc
Y
Ra
Ti
Zr
Hf
V
Nb
Ta
Mo
W
Mn
Ru
Os
Co
Rh
Ir
Ni
Pd
Pt
Cd
B
Al
Ga
In
Tl
Si
Ge
N
P
Bi
O
Se
Te
Po
F
Cl
Br
I
He
Ne
Ar
Kr
Xe
Rn
Ce
Th
Pr Nd
U
Sm Eu Gd Tb Dy Ho Er Tm Yb Lu
Pa
Pu Modern Age (1937 CE-present)
Fr Rf Db Sg
Tc
Re
Bh Hs Mt Ds Rg Cn Uut Fl Uup Lv
At
Uus Uuo
Pm
Np Pu Am Cm Bk Cf Es Fm Md No Lr
Slide 11 of 39
Source: Sykes et
al., (2016, in
press); USGS
(2014)

Aluminium was the first post-Antiquity
metal to become a major metal market
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
50
100
150
200
250
300
1900
1906
1912
1918
1924
1930
1936
1942
1948
1954
1960
1966
1972
1978
1984
1990
1996
2002
2008
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)

Nickel & uranium are other examples of
post-Antiquity metal market growth
0
50
100
150
200
250
300
1900
1909
1918
1927
1936
1945
1954
1963
1972
1981
1990
1999
2008
Growth in market size indices of
copper and nickel (1900 = 1)
Cu Index Ni Index
18th Nov 2015
0
5
10
15
20
25
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
20…
2005
2010
Growth in market size indices of
copper and uranium (1950 = 1)
Cu Index U Index
Slide 13 of 21

Aluminium benefitted from each of
discovery, supply and demand factors
18th Nov 2015
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., 2016, in press
Slide 14 of 21

Nickel and uranium also saw key
discovery, supply and demand changes
18th Nov 2015
Images: Canadian Mining Review (nickel smelting) & shutterstock Source: Sykes et al., (2016, in press)
Slide 15 of 21

Transformational market growth is
reliant on discovery, supply & demand
For transformational market growth to occur amongst a critical
metal it likely will be:
• Discoverable
• Extractable
• Useable
• Abundant in the crust;
• Concentrate into discrete deposits;
• Simple to mine;
• Simple to process;
• Important economic uses;
• Broad economic use
Source: Sykes et al., (2016, in press)

Some ‘critical metals’ are too rare and
some too difficult to find
Abundanceinthecrust>
High
(>100ppm)
Al, Ba, Cr, Mg, Mn, Si,
Sr, Ti, V
n/a
n/a
(theoretically the most
amenable to discovery)
Medium(1-100ppm)
Be, B, Ce, Dy, Er, Eu,
Gd, La, Li, Nd, Nb, Pr,
Sm, Sc, Th, W, Yb, Y
Co, Cu, Ga, Ge, Ni, Sn,
Zn
As, Pb
Low(<1ppm)
Ho, Lu, Ta, Tb, Tm
(theoretically the least
amenable to discovery)
n/a
Ag, Au, Bi, Cd, In,
Ir, Hg, Mo, Os, Pd, Pt,
Re, Rh, Ru, Sb, Te
Lithophile Chalcophile / siderophile and lithophile Chalcophile / siderophile
Ability to concentrate in the crust >
18th Nov 2015
Slide 17 of 21

Some ‘critical metals’ are too difficult to
mine and/or process
Miningconstraints>
(Mining constrained) n/a
Extraction (mining and processing)
constrained:
Dy, Er, Ho, Lu, Ta, Tb,
Th, Tm, Sn, Yb, Y
B
Au, Li, Mg,
Hg, Ni, Si, W
Be, Bi, Ce,
Co, Eu, Gd, Ir, La, Pb,
Mn, Nd, Os, Pd, Pr, Pt,
Rh, Ru, Sb, Sm, Ti, Zn
Not extraction constrained:
Ba, Cu, Nb, Sb
n/a
Processing constrained:
Ag, Cd, Ga, Ge, In, Re,
Sc, Te, V
Processing constraints >
18th Nov 2015
Slide 18 of 21

Some ‘critical metals’ lack important or
sufficiently varied uses
Criticalityofuse>
Critically demanded metal:
Dy, Er, Eu, Ga, Gd,
Ho, Lu, Nd, Pd, Pr, Rd,
Sm, Tb, Tm, Yb
Co, Ge, In, Ir,
La, Li, Os,
Pt, Ru, Sc, Te, Y
Metal with critical and diverse
demand:
Ce
Ba, Cr, Mo,
Nb, Re, Sr
As, Bi, B, Mg, Hg,
Sb, Si, Ta, Th, W
Ag, Be
Metal with limited demand:
Cd, Pb
Au, Ni, Sn,
Ti, V, Zn
Broadly demanded metal:
Al, Cu
Breadth of use >
18th Nov 2015
Slide 19 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
18th Nov 2015
Slide 20 of 21

But only a few critical metals can have a
major impact on the wider economy
18th Nov 2015
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
YbTh
HoLu
TbTmTa
1
10
100
0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
Potentialeconomicimpactof
transformationalmarketgrowth>
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 21 of 21

Which markets are the future stars of
the ‘critical metals’ industry?
Barium Boron Cerium
Chromium Cobalt Gallium
Lanthanum Lithium
Magnesium Scandium
Silicon Strontium
Vanadium
?

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 be able
to outgrow their ‘criticality’;
• Despite this ‘critical metals’ market growth has been limited
in the last decade;
• However, the history of mining and metals, in particular
aluminium, nickel and uranium shows transformational metal
market growth has occurred in the past;
• Each of these market transformations was facilitated by key
mineral discoveries, and supply and demand breakthroughs.
18th Nov 2015
Slide 23 of 21

The Implications
• For transformational market growth of a critical metal to occur
it likely will have to be discoverable, extractable and useable;
• All these factors need to be in place for growth to occur;
• Most ‘critical metals’ are currently discovery and/or supply
and/or demand constrained;
• But some critical metals may be nearer economically significant
transformational market growth, than others;
• Consumers should focus on critical metals markets with the
potential to outgrow their ‘criticality’, as should producers;
• 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.
18th Nov 2015
Slide 24 of 21

UPCOMING PUBLICATIONS
Sykes, J.P., Wright, J.P., & Trench, A., 2016, 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., 2016, An
assessment of the potential for transformational market growth
amongst the critical metals, Applied Earth Science (TIMM B), in
press

THANK YOU
Contact information:
John P. Sykes: john.sykes@greenfieldsresearch.com
Joshua Wright: josh.wright@rowton-ltd.com
Allan Trench: allan.trench@crugroup.com
Paul Miller: srp_info@mail.com

Which markets are the future stars of the critical metals industry - Sykes et al - Nov 2015 - Greenfields Research / Centre for Exploration Targeting / Curtin University / The University of Western Australia

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