Resource World Magazine

20 www.resourceworld.com D E C E M B E R / J A N U A R Y 2 0 1 9 OUTLOOK 2019 IRON ORE Seaborne Iron Ore prices are being sup- ported by strong demand from steelmakers in China with a combination of factors there driving this above and beyond sim- ply robust steel demand. The winter anti-pollution campaign has already begun and early signs are that the number of mills involved may actually be higher than last year, which was confined more to Hebei province. According to Reuters, top steelmaking city Tangshan curbed production from October 1, while Handan city – also in smog-prone Hebei province – enforced cuts from November 1. The campaign may also expand to broader regions this year as governments in the Yangtze River Delta, including the No. 2 steel-producing prov- ince of Jiangsu, work on a similar plan in northern areas. In anticipation, steel mills are cranking up output. Blast furnace utilization rates at steel mills across China reached 68.23% in mid-September, the highest in two months, and has been hovering around 68% since then. COAL A report in August this year from the Statistics Market Research Consulting Group forecasts the global coal market to grow at a compound annual growth rate of 12.5% from 2017 to 2026. Key factors propelling this growth are said to be an enlarging man- ufacturing base, rising economic growth and increasing electricity demand. However, not everyone agrees and a push to lessen the development of coal mines, as well as growing investor pressure to divest from fossil fuels, is generating a mining industry division between busi- nesses leaving the sector and companies vowing to stay in it. Banks that have reportedly brought lending for new coal mines to a halt include Deutsche Bank and the Royal Bank of Scotland, while new project spending has dropped 80%, from $10 billion in 2012 to $2.2 billion this year. This trend, along with a government-led campaign in China to cut supply of domes- tic coal to reduce pollution, has made the coal price almost double over the last three years – to trade at US $113/tonne. In the US, it was reported at the end of last month that President Donald Trump was pushing forward with his endeavours to revive the US coal mining sector and that the Environmental Protection Agency claimed it was planning to repeal previous President Barack Obama's Clean Power Plan, relaxing coal-fired power plant regulation. DIAMONDS This year's seventh annual report from strategy consulting firm Bain & Company on the global diamond industry shows global rough diamond production remain- ing flat overall although increases did occur in Canada as the Ekati Mine esca- lated production and as the Gahcho Kue Mine launched operations. Russia and Zimbabwe both suffered a major drop in production with the closure of ALROSA's Udachanaya Mine and a pro- duction halt at seven of the nine Zimbabwe diamond deposits. The global demand for rough diamonds is projected to grow at approximately 1-4% per year through 2030, while supply is projected to grow at a far slower pace, somewhere between zero and 1%. MANGANESE Manganese is a critical element used in the manufacture of steel as it increases strength and flexibility of steel. The global manganese market is expected to register moderately high growth during the forecast period, 2018 to 2023 with the Asia-Pacific region leading the market, owing to its increased usage of lithium-ion batteries. LITHIUM Rapid developments in the lithium industry have continued into 2018, as lith- ium-ion battery technologies consumed in a range of end-uses drive demand growth and new operations provide additional raw material supplies. Roskill is expect- ing growth in lithium demand to continue in the years to 2027, as EVs increase their market penetration and begin to compete on price with traditional gasoline/diesel models without incentives. They also pre- dict that energy storage systems (ESS) will grow at a similar rate to automotive appli- cations, as production costs fall and the uptake of renewable energy rises, although competition from other battery technolo- gies could become a limiting factor. VANADIUM Vanadium is used as a strengthening alloy for steel and titanium as well as a chemical catalyst. There is increasing use in vana- dium redox flow batteries for long duration energy storage. With more outer space voy- ages planned, there will be more vanadium demand from the aerospace industry. China, Russia and South Africa are the main producers (~77%) of the world's 80,000 tonnes of vanadium annually. Global vanadium consumption grew 100% between 2001 and 2014 but has since lev- elled out. POTASH China remains the fastest growing potash fertilizer market over the past decade pri- marily driven by expansion of corn, fruit and vegetable cultivation. According to Nutrien, Potash prices have continued to strengthen in 2018 in most geographies. Agronomic needs are expected to continue to drive strong pot- ash consumption growth. SILICON METAL Silicon metal is used in the manufacture of aluminium alloys, silicones, semiconduc- tors, photovoltaic solar applications and in ferrosilicon, 90% of which is consumed in the production of iron and steel. There has been an increasing demand for silicon from the aluminium industry as an alloying agent due to the ability of silicon to lower the alloy's density making it a favourite of the automotive, aerospace and structural engineering industries. World production of both silicon metal and ferrosilicon is dominated by China; in 2017, China accounted for 68% of world silicon metal production, and for 66% of global ferrosilicon output. n

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