Resource World Magazine

18 www.resourceworld.com D E C E M B E R / J A N U A R Y 2 0 1 5 prices. About 13% of thermal exports are uneconomic under the Japanese deal of US $81.80/ton. Morgan Stanley's 2015 estimate for thermal coal is US $85/ton. Coal producers may need to cut exports of coking coal after the lowest contract settlement with Asian buyers in seven years made more than half of global ship- ments uneconomic, according to Morgan Stanley. About 157 million tonnes, or 60%, of exports from countries such as Australia and the US will be shipped at a loss accord- ing to a second-quarter contract of US $120/ ton. Morgan Stanley projects coking coal will average US $165/ton in 2015. uRanium Over the next decade Raymond James Analyst David Sadowski, expects ura- nium demand to grow at about 3% per year. Most of that demand will come from China, Russia and India. "China is building reactors at a rapid pace – 30 units are currently under con- struction domestically with 59 in the planning stage. " Russia has 28 reactors in the planning stage according to the World Nuclear Association and India has just connected a new reactor to the grid and has six others under construction with five dozen on the drawing board! As numerous countries are ramping up their nuclear programs, (even Japan is expected to restart its reactors), the US and Europe are slowing down or looking to phase out reliance on nuclear energy. The balance goes in favour of steadily increasing demand. As a result ura- nium prices are expected to be range bound over the next year due to a glut of uranium supply, but then demand is expected to out- pace supply. The average uranium price forecast based on a composite of analysts that Bloomberg has tracked currently stands at US $42.75/ lb for 2015 and US $54/lb in 2016. Potash and soP According to Goldman Sachs, "The bearish outlook for crop prices is not conducive to high levels of fertilizer use. Therefore, pot- ash demand may ease again in the second half of 2014 after a brief rally." The bank stated that further action by potash groups to mothball capacity and expansion plans is needed to bring sus- tained gains in prices. Goldman Sachs forecasts potash prices will be US $310/ tonne in 2015 and US $320/tonne in 2016. Potash is typically mined in the form of water soluble salts, potassium chloride or potassium carbonate. Potassium sulphate (K 2 SO 4 ), often referred to as SOP or sulpate of potash, represents a smaller part of the potash market. SOP is expected to have a 5% annual growth in demand from 2012 to 2015. China, which is the largest con- sumer of SOP, accounts for more than 45% of global demand. SOP prices are expected to rise from current levels around US $400/ ton to around $500/ton by 2020 according to CRU data. nioBium A report by Roskill stated that the global niobium market rebounded quickly from a slump in consumption in 2009 and by 2011 demand had returned to near peak levels Recovery slowed in 2012, but a return to long-term growth is certain. Aaron Regent, former CEO of Barrick Gold, through private Magris Resources, along with some Asian investors, is buy- ing IAMGold's producing Niobec Mine in Québec which produces 7% of the world's supply of niobium, an important alloy of steel. tantalum The average yearly growth rate of about 8% to 12% in tantalum demand since about 1995 has caused a significant increase in exploration for this element which is used to make tiny capacitors for cell phones and other electronic devices. Tantalum does not trade as a commodity in recognized metal markets and, consequently, trades in negotiated agreements. With buyers trying to avoid African conflict tantalum, there is more pressure on the demand side to access legitimate sources. coBalt Cobalt is a specialty metal of increasing importance, particularly with its use in rechargeable batteries which now accounts for 42% of cobalt demand. The metal is also used in aerospace and jet engine tur- bines. There is also increasing cobalt use for solar power and wind turbines (battery storage), geothermal plants and hydro- gen storage. The cobalt market demand is expected to grow 6-8% per year with the higher growth tied to rechargeable batteries which use cobalt sulphate. Tesla's lithium- nickel-cobalt aluminum oxide chemistry uses about 9% cobalt. Growth rates in that sector can be up to 20%. High-grade cobalt metal is currently US $13.60-$14.50/lb. Prices in the forward market of 2015 are set- tling in the US $15-17/lb range. molyBdenum Molybdenum is mainly used to make various types of steel alloys; 40% for constructional engineering steels, 20% for stainless steels and 10% for alloy tools and high-speed steels. It often occurs as an accessory metal in gold-copper deposits. The use of moly is tied to economic health, making for volatile prices; a negative economic outlook drives the price of moly down as does the seasonality of demand. In July, Reuters reported that China is buying more molybdenum. World demand for moly is growing at about 4% per year. The current moly price is about US $9.50/lb. GRaPhite While graphite has traditionally been used for many applications such as nuclear power, lubricants, brakes, clutches, pen- cils, gaskets, etc, two uses are becoming increasingly important – lithium-ion batteries and graphene. Indeed, the US and EU governments have classified graph- ite as a critical mineral for industrial and national security purposes. The Li-ion battery industry, used in electric vehi- cles, is growing at about 20% annually. Electric vehicles use between 25 and 50 kg. Still in its early development, one-atom thick graphene, yet strong and flexible, is anticipated to be used in transistors, touch screen displays, transparent conductive films, solar cells and electrodes in energy storage devices. n

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