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D E C E M B E R / J A N U A R Y 2 0 1 9 www.resourceworld.com 19 OUTLOOK 2019 December 2015. CRU Group recently said that higher prices have encouraged pri- mary production from top producer China. They say that the trend over the next five years is one of very low supply growth from by-product sources and in the early- 2020s, primary mines will need to be reopened to keep the market balanced. RARE EARTHS Roskill forecasts rare earth demand to increase by 8% in 2018, driven largely by developments in the use of rare earth permanent magnets in automotive and renewable energy generation. Their use in the catalyst industry is expected to increase as emissions standards in most countries become more stringent, though growth could be impacted by the uptake of electric vehicles and fundamental shifts in the automotive industry. China remains the global leader in the production of both mined rare earth products and refined rare earth compounds, with Chinese production accounting for 86% of global refined pro- duction in 2017. The looming addition of tariffs on rare earth raw materials and finished prod- ucts traded between the US and China and increasingly stringent environmental inspections disrupting mine and refined rare earth supply in China are exacerbat- ing an already tight market for key rare earth elements entering a period of strong growth in demand for rare earth perma- nent magnets (for cars, speakers, etc). Rare earth production at operations outside China is forecast to increase sig- nificantly in the years to 2028, as existing producers expand production capacity and numerous projects in Australia, Russia, the Americas and Africa are scheduled to be commissioned. The increase in non-Chinese production is expected to sig- nificantly reduce China's stranglehold on REE supply, though China is expected to remain the major supplier of REE products to the global market. NIOBIUM Approximately 90% of all niobium used is consumed as ferroniobium in steelmaking. The rest goes into a wide range of smaller- volume but higher-value applications, such as high-performance alloys (which include superalloys), carbides, super- conductors, electronic components and functional ceramics. Almost all ferroniobium supply is from three industrialized producers, two in Brazil and one in Canada, and is derived from the mineral pyrochlore. Little, if any, pyrochlore enters international trade as it is converted into ferroniobium and other products before export. Niobium for non-steel applications is typically from other minerals (columbite, columbite-tantalite etc.) that are mostly produced by artisanal mining in Africa and South America. The supply bases for nio- bium used in steels are thus, often, different to that used in other end products. Niobium prices are historically very stable. They moved little in the period up to about 2006, when a producer-driven doubling in prices began, and have remained stable at the higher benchmark. Ferroniobium prices, in particular, are fairly demand-inelastic, with the 2009 slump in demand from the global steel industry having only minimal impact on pricing. According to Roskill, the out- look for prices is one of gentle but steady increase and spikes are unlikely. URANIUM The only significant commercial use for uranium is in the oxide form U 3 O 8 as a fuel for nuclear power plants for the generation of electricity. Uranium has other commer- cial uses in the fields of medical diagnosis and other industries, but these markets are very small in terms of volume. Throughout 2018, the spot price of uranium continued to be relatively volatile due to the announcement of further substantial cuts to global produc- tion in November 2017 beginning with Cameco Corp. announcing a minimum 10-month shutdown of the McArthur River Mine/Key Lake Mill complex in Saskatchewan. Cameco's McArthur River/ Key Lake operations represent the largest and highest-grade uranium mine in the world, producing approximately 18 mil- lion pounds of U 3 O 8 annually. Following Cameco's announcement, National Atomic Company Kazatomprom made a further announcement regarding production restraint – outlining that production through 2020 would represent a 20% reduction in planned output from its operations in Kazakhstan. Following these announcements, the spot price of U 3 O 8 increased again, reaching a high of US $26.50/lb U 3 O 8 in December 2017, before retreating to US $21.25/lb U 3 O 8 by the end of fiscal 2018. On the demand side of the uranium market, fundamentals continue to trend positive. Many nations today, particularly in the emerging markets, struggle with the need to deliver reliable and affordable electricity to their growing populations, without compounding climate change and air pollution challenges. As such, nuclear energy, with its reliability and clean air benefits, is filling an important role in the supply of baseload power around the world. As of March 2018, the World Nuclear Association reported 448 reactors operable worldwide with 57 new reactors under construction, 158 reactors planned or on order, and another 351 proposed. GRAPHITE According to Roskill, graphite demand is about to enter a period of rapid growth and price escalation. Consumption had previously been led by steel market appli- cations and Chinese industrialization but had slowed as Chinese steel output growth slowed during the period 2010 to 2017. However, rapid growth in demand for natural flake graphite and synthetic graphite in the lithium-ion battery indus- try is now forecast to underpin total graphite demand growth of 5–7% per year between 2017 and 2027. By 2027, consumption of graphite in battery appli- cations could be 5 to 10 times higher than the current level, dependent on the uptake of lithium-ion battery-based electric vehi- cles (EVs) and other lithium-ion battery applications.