Global trends in the industrial Global trends in the industrial - - PowerPoint PPT Presentation

Global trends in the industrial Global trends in the industrial minerals industry minerals industry

Challenges & opportunities Challenges & opportunities

Mike O Mike O’ ’Driscoll, Driscoll, Editor, Industrial Minerals Editor, Industrial Minerals

Investment Opportunities in Saudi Industrial Minerals Investment Opportunities in Saudi Industrial Minerals

9 March 2009, Jeddah, organised by the Saudi Geological Survey 9 March 2009, Jeddah, organised by the Saudi Geological Survey

Industrial Minerals Industrial Minerals

Metal Bulletin Ltd, UK Metal Bulletin Ltd, UK

Since 1967, delivering premium Since 1967, delivering premium information on news and trends in information on news and trends in global supply and demand of global supply and demand of industrial minerals industrial minerals From mine to market: From mine to market: global non global non-

• metallic minerals

metallic minerals intelligence intelligence

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM, Investment Opportunities in Saudi Industrial Miner Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, als, 9 March 2009, Jeddah 9 March 2009, Jeddah

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM, Investment Opportunities in Saudi Industrial Miner Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, als, 9 March 2009, Jeddah 9 March 2009, Jeddah

Industrial Minerals Industrial Minerals

From mine to market: global non From mine to market: global non-

• metallic minerals intelligence

metallic minerals intelligence

• magazine

magazine

• on
• n-
• line

line www.indmin.com www.indmin.com

• directories &

directories & reports reports

• events

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Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

IM ONLINE LAUNCHED MARCH 2009 IM ONLINE LAUNCHED MARCH 2009

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Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

UPCOMING EVENTS 2009 UPCOMING EVENTS 2009

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

Outline Outline

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals
• 2. Trends & challenges
• 2. Trends & challenges
• 3. Opportunities
• 3. Opportunities
• 4. Summary & Conclusions
• 4. Summary & Conclusions

Think Think “ “Saudi Potential Saudi Potential” ”

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Glass/glasses/ Glass/glasses/ silica sand, limestone, soda ash, silica sand, limestone, soda ash, light bulbs light bulbs borates, feldspar, lithium borates, feldspar, lithium Ceramic tiles/mugs/ Ceramic tiles/mugs/ kaolin, feldspar, talc, wollastonite, kaolin, feldspar, talc, wollastonite, plates etc. plates etc. borates, alumina, zirconia borates, alumina, zirconia Paint Paint TiO TiO2

2, kaolin, mica, talc, wollastonite,

, kaolin, mica, talc, wollastonite, GCC, silica GCC, silica Plastic white goods Plastic white goods talc, GCC, kaolin, mica, wollastonite, talc, GCC, kaolin, mica, wollastonite,

• eg. fridge, washer
• eg. fridge, washer

flame retardants (ATH, Mg(OH) flame retardants (ATH, Mg(OH)2

2)

) Wooden flooring Wooden flooring treatment materials treatment materials-

• borates, chromite

borates, chromite Drinking water Drinking water treatment materials treatment materials-

• lime, zeolites

lime, zeolites Wine/beer Wine/beer diatomite, perlite filters diatomite, perlite filters Salt Salt salt salt Sugar Sugar lime in processing lime in processing Detergents/soap Detergents/soap borates, soda ash, phosphates borates, soda ash, phosphates Surfaces Surfaces marble, granite marble, granite Books Books kaolin, talc, GCC, lime, TiO kaolin, talc, GCC, lime, TiO2

2 in paper

in paper Oven glass Oven glass petalite, borates petalite, borates Heating elements Heating elements fused magnesia fused magnesia Wallboard/plaster Wallboard/plaster gypsum, flame retardants gypsum, flame retardants Metal pots/cutlery Metal pots/cutlery mineral fluxes & refractories in smelting mineral fluxes & refractories in smelting

Industrial minerals in your kitchen Industrial minerals in your kitchen

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

A A CAR CAR contains up to 100 contains up to 100-

• 150 kg of minerals and

150 kg of minerals and more than a tonne of metals more than a tonne of metals 50% of 50% of PAINT PAINT is made of minerals is made of minerals A family A family HOUSE HOUSE contains up to contains up to 400 tonnes of minerals 400 tonnes of minerals CERAMICS CERAMICS contain up to 100% minerals contain up to 100% minerals 1 km of 1 km of HIGHWAY HIGHWAY requires requires 30,000 tonnes of minerals 30,000 tonnes of minerals GLASS GLASS contains up to 100% minerals contains up to 100% minerals

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Our world is made of them Our world is made of them

Efthimios Vidalis, S&B Industrial Minerals (2008) Efthimios Vidalis, S&B Industrial Minerals (2008)

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Fundamentals: industry is market driven Fundamentals: industry is market driven

“ “Without a market, an industrial mineral deposit Without a market, an industrial mineral deposit is merely a geological curiosity is merely a geological curiosity” ”

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

Abrasives Abrasives Foundry Foundry Absorbents Absorbents Glass Glass Agricultural Agricultural Metallurgy Metallurgy Cement Cement Paint Paint Ceramics Ceramics Pigments Pigments Chemicals Chemicals Paper Paper Construction Construction Plastics Plastics Oil well drilling Oil well drilling Refractories Refractories Electronics Electronics Flame retardants Flame retardants Filtration Filtration Welding Welding

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Main consuming markets Main consuming markets Fundamentals: industry is market driven Fundamentals: industry is market driven

Ceramics Ceramics Chemicals Chemicals Glass Glass Paints Paints Plastics Plastics Paper Paper Refractories Refractories

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Fundamentals: industry is market driven Fundamentals: industry is market driven

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Fundamentals: industry is market driven Fundamentals: industry is market driven Market Market geography

geography

• Growing populations, eg. China, Asia

Growing populations, eg. China, Asia

• Developing regions, eg. China, India, SEA, eastern/central

Developing regions, eg. China, India, SEA, eastern/central Europe, Russia Europe, Russia

• Hotspots of specific industry activity, eg. oil/gas in

Hotspots of specific industry activity, eg. oil/gas in Nigeria/Vietnam; steel/ceramics in Middle East; insulation in Nigeria/Vietnam; steel/ceramics in Middle East; insulation in eastern Europe and Russia eastern Europe and Russia

New/growth market New/growth market application

application

• Environmental

Environmental

• New energy alternatives

New energy alternatives

• Nanotechnology

Nanotechnology

• Plastics

Plastics

• CO2 capture

CO2 capture

Fundamentals: Mine to market supply chain Fundamentals: Mine to market supply chain

• supply sector

supply sector

• logistics sector

logistics sector

• consuming market sector

consuming market sector

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

SUPPLY SUPPLY

• exploration

exploration

• mineral finance

mineral finance

• plant engineering

plant engineering

• mining

mining

• processing

processing LOGISTICS LOGISTICS

• trading

trading

• port handling

port handling

• mineral inspection

mineral inspection

• freight

freight

• warehousing/distribution

warehousing/distribution MARKET MARKET

• direct market mineral consumer

direct market mineral consumer

• intermediate market mineral consumer

intermediate market mineral consumer

• end market mineral consumer

end market mineral consumer SUPPLY DEMAND

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Fundamentals: Mine to market supply chain Fundamentals: Mine to market supply chain

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

Mineral to end use market Mineral to end use market

Mineral Mineral ilmenite ilmenite bauxite bauxite

• Intermed. min. product
• Intermed. min. product

TiO TiO2

2 white pigment

white pigment calcined alumina calcined alumina

• Intermediate market

Intermediate market paint paint refractory brick refractory brick

• End use market(s)

End use market(s) automobiles/construction automobiles/construction steelmaker steelmaker

• construction/ships

construction/ships

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Fundamentals: Mine to market supply chain Fundamentals: Mine to market supply chain

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 1. The importance of industrial minerals
• 1. The importance of industrial minerals

Fundamentals: main characteristics Fundamentals: main characteristics

• Deposits quite dispersed

Deposits quite dispersed

• Long

Long-

• term commitment necessary

term commitment necessary

• Complex marketing, and market and product R&D

Complex marketing, and market and product R&D

• Wide range of applications using different grades

Wide range of applications using different grades

• Pricing not set by an exchange

Pricing not set by an exchange – – between buyer & seller; host of between buyer & seller; host of influencing factors; generally low value, high volume influencing factors; generally low value, high volume

• Sophisticated, and often high cost processing required

Sophisticated, and often high cost processing required

• Logistics a significant part of delivered price

Logistics a significant part of delivered price

• Essential to maintain working co

Essential to maintain working co-

• operation with end users
• peration with end users

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges
• Regulation

Regulation

• Globalisation

Globalisation

• China

China

• Strategic focus

Strategic focus

• Environment

Environment

• Economic recession

Economic recession

• Emerging markets

Emerging markets

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Regulation Regulation EU EU -

• REACH

REACH

R Registration,

egistration, E

Evaluation,

valuation, A

Authorisation of

uthorisation of CH

CHemicals

emicals Chief principles: Chief principles:

• Promoting responsible care

Promoting responsible care

• Leaving initiative to Industry

Leaving initiative to Industry

• Introducing risk assessment and risk based management

Introducing risk assessment and risk based management

Why important to minerals industry? Why important to minerals industry?

• Industry supports the principle of

Industry supports the principle of responsible care responsible care

• REACH offers opportunity to

REACH offers opportunity to harmonize assessment of chemicals and products in EU harmonize assessment of chemicals and products in EU

• Determines assessment methodology & database for all major envi

Determines assessment methodology & database for all major environmental policies ronmental policies

Ores/Concentrates° Recovered metals & alloys* Production Intermediates

Massive Metals, Minerals metal and mineral compounds

INPUT PRODUCTION OUTPUT

PRODUCTION CHAIN

Recovery Waste

° ° No Registration No Registration (if not chemically (if not chemically modified) modified) * No Registration * No Registration (if information in hand) (if information in hand) Registration Registration Registration Registration Out of Scope

• 2. Trends & challenges
• 2. Trends & challenges

Regulation Regulation – – REACH scope REACH scope

Mineral, Ore or Ore Concentrate Processing Step Chemical Modification ?

Optical/Mechanised Sorting No Magnetic/Electrostatic Separation (e.g., iron ore, mineral sands) No Gravity or Dense Medium Separation (e.g., gold, iron ore, coal, lead) No Agglomeration or Froth Flotation (e.g., Cu, Ni, Pb, Sn, mineral sands) No Thickening & Filtration (e.g., copper, lead, zinc) No Pelletising by granulation only No Pelletising with sintering Yes Calcination involving changes to the chemical structure (e.g., CO2 release) Yes Leaching/Washing Processes to remove impurities No Leaching processes to extract the value-mineral Yes Precipitation and gas precipitation Yes Preferential Crushing, Grinding or Milling No Screening, Hydrocycloning or Classification No Ion-Exchange, Solvent Extraction or Electro-winning Yes Drying (or calcination that results in removal of water & impurities only) No Pressure Digestion in aqueous NaOH Yes Sintering, Roasting & Smelting Yes

E X E M P T I O N N O E X E M P T I O N

• 2. Trends & challenges
• 2. Trends & challenges

Regulation Regulation – – REACH scope REACH scope

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Regulation Regulation – – REACH REACH

• Pre

Pre-

• registration deadline 1 December 2008

registration deadline 1 December 2008

• No pre

No pre-

• registration = companies not allowed to produce

registration = companies not allowed to produce

• r import minerals/materials not pre
• r import minerals/materials not pre-
• registered

registered

• EU may make example of breaches of REACH

EU may make example of breaches of REACH

• Continuing confusion and debate amongst industry

Continuing confusion and debate amongst industry

• ver REACH implementation, especially
• ver REACH implementation, especially “

“definitions definitions” ”

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Regulation Regulation – – access to resources restricted access to resources restricted

The World's Urban Population is Growing

1.000.000 2.000.000 3.000.000 4.000.000 5.000.000 6.000.000 1 9 7 5 1 9 8 1 9 8 5 1 9 9 1 9 9 5 2 2 5 2 1 2 1 5 2 2 2 2 5 2 3 Population (billions)

Forecasts for 2030 Forecasts for 2030

• Global population >8bn.

Global population >8bn.

• Practically all of the

Practically all of the growth will be in growth will be in developing, regions developing, regions dominated by the young, dominated by the young, particularly in urban areas particularly in urban areas

• More than 60% will be

More than 60% will be urban population. 80% in urban population. 80% in Europe and North America Europe and North America

• increasing challenge to

increasing challenge to access mineral resources access mineral resources

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Globalisation, M&A Globalisation, M&A Main drivers Main drivers

• securing mineral resources

securing mineral resources

• access to markets

access to markets

• synergies & economies of scale in production & freight

synergies & economies of scale in production & freight

• move away from state ownership

move away from state ownership Response Response

• M&A activity in supply and market sector

M&A activity in supply and market sector

• increasing interest from private equity sector

increasing interest from private equity sector

• competition to secure natural resources worldwide

competition to secure natural resources worldwide

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Globalisation, M&A Globalisation, M&A

BMO Capital Markets 2009 BMO Capital Markets 2009

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Globalisation, M&A Globalisation, M&A

BMO Capital Markets 2009 BMO Capital Markets 2009

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Globalisation, M&A Globalisation, M&A

BMO Capital Markets 2009 BMO Capital Markets 2009

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Globalisation, M&A Globalisation, M&A

PE buys PE buys – – recent examples recent examples Target Target Mineral Mineral Buyer Buyer Idwala, South Africa Idwala, South Africa lime, GCC lime, GCC Ethos/Old Mutual, South Africa Ethos/Old Mutual, South Africa Molycorp, USA Molycorp, USA rare earths rare earths RCF/Pegasus/Goldman Sachs/Traxys RCF/Pegasus/Goldman Sachs/Traxys US Silica, USA US Silica, USA silica silica Golden Gate Capital, USA Golden Gate Capital, USA Magnesita, Brazil Magnesita, Brazil magnesia magnesia GP Investments/Gavea, Brazil GP Investments/Gavea, Brazil KaMin, USA KaMin, USA kaolin kaolin IMin Partners, USA IMin Partners, USA Prince Minerals, USA/UK Prince Minerals, USA/UK pigments, Zr pigments, Zr Palladium Equity, USA Palladium Equity, USA Almatis, Germany Almatis, Germany aluminas aluminas Dubai International Capital, Dubai Dubai International Capital, Dubai Mondo Minerals, Finland Mondo Minerals, Finland talc talc Hg Capital, UK Hg Capital, UK QMAG, Australia QMAG, Australia magnesia magnesia Resource Capital Funds, USA Resource Capital Funds, USA NYCO, USA NYCO, USA wollastonite wollastonite Resource Capital Funds, USA Resource Capital Funds, USA Talison Minerals, Australia Talison Minerals, Australia lithium, tantalum lithium, tantalum Resource Capital Funds, USA Resource Capital Funds, USA

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Globalisation, M&A Globalisation, M&A

Strategic buys Strategic buys – – recent examples recent examples Target Target Mineral Mineral Buyer Buyer Potasio RC, Argentina Potasio RC, Argentina potash potash Vale, Brazil Vale, Brazil Zemex IM, USA Zemex IM, USA feldspar, mica feldspar, mica Imerys, France Imerys, France LWB, USA/Germany/China LWB, USA/Germany/China dolomite, refractories dolomite, refractories Magnesita, Brazil Magnesita, Brazil Keliber, Finland Keliber, Finland lithium lithium Nordic Mining, Norway Nordic Mining, Norway Calmag, Turkey Calmag, Turkey magnesite magnesite Bomex, Serbia Bomex, Serbia Slovmag, Slovakia Slovmag, Slovakia magnesite magnesite Magnezit, Russia Magnezit, Russia UCM, UK/USA UCM, UK/USA fused mag, fused zirconia fused mag, fused zirconia Imerys, France Imerys, France Minco, USA Minco, USA fused magnesia fused magnesia Penoles, Mexico Penoles, Mexico Franklin Industrial Minerals Franklin Industrial Minerals limestone, GCC limestone, GCC Lhoist, Belgium Lhoist, Belgium Linden Mining, Guyana Linden Mining, Guyana bauxite bauxite Bosai Minerals, China Bosai Minerals, China General Chemical, USA General Chemical, USA soda ash soda ash Tata Chemicals, India Tata Chemicals, India Searles Valley Min., USA Searles Valley Min., USA soda ash, borates soda ash, borates Nirma, India Nirma, India Oglebay Norton, USA Oglebay Norton, USA limestone, Si limestone, Si-

• sands

sands Carmeuse, Belgium Carmeuse, Belgium Rio Tinto Minerals, world talc, borates ?????

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Globalisation, M&A Globalisation, M&A Consuming market sector Consuming market sector Steel Steel Mittal/Arcelor; Tata/Corus Mittal/Arcelor; Tata/Corus Paint Paint Akzo Nobel/ICI; PPG/Sigma Kalon Akzo Nobel/ICI; PPG/Sigma Kalon Paper Paper NewPage/Stora Enso; Domtar/Weyeheuser NewPage/Stora Enso; Domtar/Weyeheuser Brewing Brewing Interbrew/Ambev; Carlsberg Interbrew/Ambev; Carlsberg-

• Heineken/Scottish & Newcastle

Heineken/Scottish & Newcastle

• magnesia, barite, graphite, bauxite,

magnesia, barite, graphite, bauxite, talc, fused alumina, silicon carbide talc, fused alumina, silicon carbide

• 1980s

1980s-

• late 1990s dominated supply

late 1990s dominated supply

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

China Factor China Factor – – 1980s 1980s-

• 2000s

2000s

• faced antidumping legislation

faced antidumping legislation

• 1990s: exported processed minerals;

1990s: exported processed minerals; dissolution of SOE; privatisation dissolution of SOE; privatisation

• 1994: export licence system, prices up

1994: export licence system, prices up

• 2000s: increased foreign investment

2000s: increased foreign investment for both resources & end use; for both resources & end use; increased exports of end products increased exports of end products

• 2003

2003-

• 04: economy soars; prices rise;

04: economy soars; prices rise; power, fuel, freight shortages power, fuel, freight shortages

“ “I feel that I feel that once the Chinese government is

• nce the Chinese government is

introducing a new tax to curb the export of introducing a new tax to curb the export of minerals, obviously they do not worry about minerals, obviously they do not worry about the competitiveness of Chinese minerals in the the competitiveness of Chinese minerals in the international market any more. international market any more.” ”

Early 2006: a leading trader commented: Early 2006: a leading trader commented:

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

China Factor China Factor – – 2006 2006

Early 2006: a leading trader commented: Early 2006: a leading trader commented:

“ “The overseas buyer will either be The overseas buyer will either be forced to pay a significantly higher forced to pay a significantly higher price for Chinese minerals price for Chinese minerals or buy

• r buy

from an alternative source. from an alternative source.” ”

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

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Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

China Factor China Factor – – 2006 2006

• Depletion of quality resources

Depletion of quality resources

• Poor mine planning/extraction

Poor mine planning/extraction

• Fuel/power costs & availability

Fuel/power costs & availability

• Olympic Games ban impact

Olympic Games ban impact

• Incentive to secure world resources

Incentive to secure world resources

• Antipollution legislation; plant closures

Antipollution legislation; plant closures

• Domestic demand priority

Domestic demand priority

• Resource & processing capacity

Resource & processing capacity investment; streamlining supply base investment; streamlining supply base

• Exports curbed: VAT rebate ended,

Exports curbed: VAT rebate ended, licence fee & tax rises; smuggling curb licence fee & tax rises; smuggling curb

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

China Factor China Factor – – 2006 2006-

• present

present = higher prices + export supply shortage

August 2008: a western producer & consumer stated: August 2008: a western producer & consumer stated:

“ “At the end of 2009 we should be independent At the end of 2009 we should be independent regarding supply of [Chinese] DBM and FM. regarding supply of [Chinese] DBM and FM.” ” “ “A similar strategy should be the base for any A similar strategy should be the base for any serious producer of magnesia based refractory serious producer of magnesia based refractory products. products.” ”

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

China Factor China Factor – – 2008 onwards 2008 onwards

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Strategic focus on raw material resources Strategic focus on raw material resources

• Companies/countries targeting

Companies/countries targeting “ “strategic strategic” ” mineral resources mineral resources

• Minerals in short supply: eg.

Minerals in short supply: eg. magnesia, bauxite, magnesia, bauxite, aluminosilicates, barite, frac sand, graphite, fluorspar aluminosilicates, barite, frac sand, graphite, fluorspar

• Minerals for new/growth markets:

Minerals for new/growth markets: eg.

• eg. lithium, rare earths,

lithium, rare earths, graphite, potash, phosphate graphite, potash, phosphate

• EU Raw Materials Initiative:

EU Raw Materials Initiative:

• fairer access to supply outside EU

fairer access to supply outside EU

• improvement of mining within EU

improvement of mining within EU

• increasing recycling

increasing recycling

• USGS Minerals Program:

USGS Minerals Program: Minerals at risk and for emerging Minerals at risk and for emerging technologies technologies

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Environment Environment

• Sustainable Development:

Sustainable Development:

• resource efficiency

resource efficiency

• responsible mining

responsible mining

• conservation of resources &

conservation of resources & environment environment

• Carbon footprint:

Carbon footprint:

• reduction of CO2 emissions in

reduction of CO2 emissions in extraction, processing, & freight extraction, processing, & freight

• f minerals
• f minerals
• need to quantify these values

need to quantify these values

• Late 2008: financial crisis

Late 2008: financial crisis – – economic recession economic recession

• Market slowdown in 2009; trading stalled Q109

Market slowdown in 2009; trading stalled Q109 Construction Construction Automobiles Automobiles Steel Steel Glass Glass Cement Cement Refractory Refractory demand demand Mineral Mineral demand demand

• New projects & capacity expansions concern

New projects & capacity expansions concern

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Economic recession Economic recession

• Production cut

Production cut-

• backs:

backs: eg.

• eg. -
• Vale, 470,000 tpa kaolin

Vale, 470,000 tpa kaolin

• Kaolin AD 10% workforce layoff

Kaolin AD 10% workforce layoff

• Rio Tinto Alcan, 105,000 tpa alumina

Rio Tinto Alcan, 105,000 tpa alumina

• QMAG, 30% plant capacity

QMAG, 30% plant capacity

• Metso, Sandvik cut jobs

Metso, Sandvik cut jobs

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Economic recession Economic recession

2009: Global steel industry expected to contract 7-8% Middle East steel market expected to drop 35% to 9m. tonnes

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Economic recession Economic recession

Recent headlines from Mineral PriceWatch on Recent headlines from Mineral PriceWatch on www.indmin.com www.indmin.com

“ “Lithium Lithium prices facing pressures prices facing pressures” ” 05 March 2009 05 March 2009 “ “Borates Borates prices follow glass fall prices follow glass fall” ” 04 March 2009 04 March 2009 “ “Chinese Chinese alumina alumina prices fading prices fading” ” 03 March 2009 03 March 2009 “ “US US building mineral building mineral prices hit prices hit” ” 02 March 2009 02 March 2009 “ “Bentonite Bentonite prices could erode prices could erode” ” 27 February 2009 27 February 2009 “ “Fluorspar Fluorspar market slows 15% market slows 15%” ” 26 February 2009 26 February 2009 “ “Rare earths Rare earths prices continue fall prices continue fall” ” 24 February 2009 24 February 2009 “ “Chromite Chromite prices prices “ “hard to judge hard to judge”” ”” 23 February 2009 23 February 2009 “ “Downturn softens Downturn softens graphite graphite prices prices” ” 19 February 2009 19 February 2009

Mineral prices falling Mineral prices falling

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 2. Trends & challenges
• 2. Trends & challenges

Economic recession Economic recession

Recent headlines from Mineral PriceWatch on Recent headlines from Mineral PriceWatch on www.indmin.com www.indmin.com

“ “Iodine Iodine prices up 20% in 2009 prices up 20% in 2009” ” 06 March 2009 06 March 2009 “ “Sales fall but Sales fall but potash potash prices firm prices firm” ” 03 March 2009 03 March 2009 “ “UCM drops UCM drops magnesia magnesia fuel charges fuel charges” ” 02 March 2009 02 March 2009 “ “PCC PCC prices buck general trend prices buck general trend” ” 20 February 2009 20 February 2009 “ “Drilling grade Drilling grade barytes barytes prices edge up prices edge up” ”05 March 2009 05 March 2009 “ “Kyanite & mullite Kyanite & mullite prices steady prices steady” ” 26 February 2009 26 February 2009 “ “Chinese Chinese salt salt prices holding up prices holding up” ” 25 February 2009 25 February 2009

But not all doom & gloom! But not all doom & gloom!

• Fuel and freight costs down; freight availability up

Fuel and freight costs down; freight availability up

• IMs generally better equipped to survive recessions

IMs generally better equipped to survive recessions

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Trends
• 3. Trends

Opportunities Opportunities

Emerging markets & opportunities Emerging markets & opportunities

Environment: Environment:

• improving CO2 footprint by using minerals; sequestration

improving CO2 footprint by using minerals; sequestration

• antipollution applications (eg. FGD, waste/water treatment)

antipollution applications (eg. FGD, waste/water treatment) Energy: Energy:

• oil & gas drilling (eg. Brazil, SE Asia); OFM shortage
• il & gas drilling (eg. Brazil, SE Asia); OFM shortage
• alternative/new power sources (eg. Li

alternative/new power sources (eg. Li-

• ion batteries, fuel

ion batteries, fuel cells); insulation market (Russia, E. Europe) cells); insulation market (Russia, E. Europe) Construction: Construction:

• steel, glass, ceramics, paints, plastics

steel, glass, ceramics, paints, plastics

• BRIC, ME, Eastern Europe market growth

BRIC, ME, Eastern Europe market growth

• Govt. initiatives eg. China, USA
• Govt. initiatives eg. China, USA

Specialities: Specialities:

• eg. technical ceramics, functional fillers, nanotechnology
• eg. technical ceramics, functional fillers, nanotechnology

“ “Replacing Replacing” ” Chinese supply: Chinese supply:

• customers seeking alternatives sources

customers seeking alternatives sources Time of positioning: Time of positioning:

• PEG in favourable position

PEG in favourable position

• time to secure resources/supply

time to secure resources/supply Fertilisers: Fertilisers:

• demand from food shortages; biofuel market

demand from food shortages; biofuel market

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia

• Diversification from oil & gas;

Diversification from oil & gas; 8 8th

th Development Plan 2005

Development Plan 2005-

• 09,

09, 7.9% growth in mining sector 7.9% growth in mining sector

• $11,900m. to 2020

$11,900m. to 2020

• New Mining Code in 2004 more

New Mining Code in 2004 more attractive to foreign investment attractive to foreign investment

• Extraction, processing, &

Extraction, processing, & logistics logistics

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Construction, glass, ceramics, cement, Construction, glass, ceramics, cement, mineral wool mineral wool

Basalt Basalt Bauxite Bauxite Kaolin Kaolin Diatomite Diatomite Dolomite Dolomite Feldspar Feldspar Gypsum Gypsum Limestone Limestone Nepheline syenite Nepheline syenite Pozzolans Pozzolans Silica sand Silica sand Zeolite Zeolite

• as raw material components

as raw material components

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Steel, metallurgry, IOP Steel, metallurgry, IOP

Bauxite Bauxite Bentonite Bentonite Dolomite Dolomite Fluorspar Fluorspar Limestone Limestone Magnesite Magnesite Olivine Olivine Wollastonite Wollastonite

• as fluxes, conditioners, binders

as fluxes, conditioners, binders

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Refractories for steel, non Refractories for steel, non-

• ferrous, glass, cement, lime, petrochem.

ferrous, glass, cement, lime, petrochem.

Bauxite Bauxite Chromite Chromite Dolomite Dolomite Graphite Graphite Kaolin Kaolin Kyanite Kyanite Limestone Limestone Magnesite Magnesite Olivine Olivine Refractory clays Refractory clays Zirconia Zirconia

• as raw material components

as raw material components

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Environment Environment

Bentonite Bentonite Diatomite Diatomite Dolomite Dolomite Garnet Garnet Limestone Limestone Magnesite Magnesite Olivine Olivine Silica sand Silica sand Zeolite Zeolite

• as functional ingredients in FGD,

as functional ingredients in FGD, waste/water treatment, filtration, CO2 waste/water treatment, filtration, CO2 sequestration sequestration

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Energy Energy

Barite Barite Bentonite Bentonite Bauxite Bauxite Graphite Graphite Magnetite Magnetite Silica sand Silica sand Zirconia Zirconia

• functional ingredients in batteries, fuel

functional ingredients in batteries, fuel cells, oil/gas drilling cells, oil/gas drilling

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Fertilisers Fertilisers

Bentonite Bentonite Phosphate Phosphate Magnesite Magnesite Sulphur Sulphur Talc Talc

• as raw material components

as raw material components

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Speciality Speciality

GCC GCC Mg(OH)2 Mg(OH)2 Rare earths Rare earths Speciality silicas Speciality silicas Zirconia Zirconia

• as functional ingredients in plastics,

as functional ingredients in plastics, rubber, technical ceramics, mobile phones rubber, technical ceramics, mobile phones

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Spotlight: Rare earths Spotlight: Rare earths 25% new technologies use RE 25% new technologies use RE

Military

• Military. High strength alloys, laser guided missiles, SONAR, RADAR, bla

. High strength alloys, laser guided missiles, SONAR, RADAR, blast glass, etc. st glass, etc. Medical.

• Medical. MRIs, Xrays, contrast agents, lasers

MRIs, Xrays, contrast agents, lasers Automotive.

• Automotive. Hybrid batteries, catalysts, small electric motors, glass, anti

Hybrid batteries, catalysts, small electric motors, glass, anti-

• lock brakes

lock brakes Computer.

• Computer. Hard drives, color screens, speakers, memory chips

Hard drives, color screens, speakers, memory chips Phosphors.

• Phosphors. Compact florescent bulbs, color screens

Compact florescent bulbs, color screens Glass.

• Glass. Polishing, strengthening, coloring, micro lenses

Polishing, strengthening, coloring, micro lenses Oil.

• Oil. Fluid cracking catalysts

Fluid cracking catalysts

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Spotlight: Rare earths Spotlight: Rare earths

• China

China

• 95% REO production

95% REO production

• 90% reserves

90% reserves

• reducing RE exports

reducing RE exports

• starting RE stockpile

starting RE stockpile

• domestic consumption growing, 28% p.a.

domestic consumption growing, 28% p.a.

• actively seeking resources outside China

actively seeking resources outside China

• World demand

World demand

• Present: 124,000 REO tpa

Present: 124,000 REO tpa

• by 2014: 170

by 2014: 170-

• 190,000 tpa

190,000 tpa

• China demand: 120,000 tpa

China demand: 120,000 tpa

• China exports 25,000 tpa

China exports 25,000 tpa

• ROW demand: 45,000 tpa

ROW demand: 45,000 tpa

• shortage of Dy, Tb, Y

shortage of Dy, Tb, Y

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Spotlight: Magnesite Spotlight: Magnesite

• During 1980

During 1980-

• 90s China dominated magnesia exports

90s China dominated magnesia exports

Source: Ian Wilson (2008) Source: Ian Wilson (2008)

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Spotlight: Magnesite Spotlight: Magnesite

• During 1980

During 1980-

• 90s China dominated magnesia exports

90s China dominated magnesia exports

Source: Ian Wilson (2008) Source: Ian Wilson (2008)

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Spotlight: Magnesite Spotlight: Magnesite

• During 1980

During 1980-

• 90s China dominated magnesia exports

90s China dominated magnesia exports

Source: Ian Wilson (2008) Source: Ian Wilson (2008)

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia Spotlight: Magnesite Spotlight: Magnesite

• Western producers diversified from DBM or exited

Western producers diversified from DBM or exited

• 2000s saw China govt. policy of export reduction, and focus on

2000s saw China govt. policy of export reduction, and focus on domestic markets, conserve raw materials, export finished domestic markets, conserve raw materials, export finished products, eg. refractories products, eg. refractories

• Resulting in magnesia supply shortages, rising prices,

Resulting in magnesia supply shortages, rising prices, consumers scrabbling to secure future supply consumers scrabbling to secure future supply

• Encouraged producers outside China to expand/emerge

Encouraged producers outside China to expand/emerge

Baymag CCM,DBM,FM Mag de Rubian CCM Magnezit CCM,DBM,FM Bommag DBM,FM Kumas DBM,FM Magnesita DBM RHI-Jinding DBM Tata Ref. DBM Qmag CCM, DBM,FM DSP CCM MMMS CCM Premier CCM Penoles CCM,FM

West response to China magnesite shortage West response to China magnesite shortage

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Magnezit Magnezit DBM,FM DBM,FM Quintermina Quintermina CCM,DBM,FM CCM,DBM,FM Zarghat? Zarghat? CCM, DBM,FM CCM, DBM,FM

• Steel bright spots: China, India, South Korea, ME

Steel bright spots: China, India, South Korea, ME

• Non

Non-

• refractory market opportunities

refractory market opportunities Environmental Environmental CCM/Mg(OH)2 CCM/Mg(OH)2 Specialities Specialities CCM/Mg(OH)2 CCM/Mg(OH)2 Hydrometallurgy Hydrometallurgy Ni laterite Ni laterite processing processing CCM CCM Agrimarkets Agrimarkets CCM CCM

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 3. Opportunities
• 3. Opportunities

Saudi Arabia Saudi Arabia – – Spotlight: Spotlight: magnesite magnesite

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 4. Summary & conclusions
• 4. Summary & conclusions
• Learn & respect the fundamentals of IMs

Learn & respect the fundamentals of IMs

• Analyse challenges and market demand

Analyse challenges and market demand

• Opportunities arise: China, environment, new tech.,

Opportunities arise: China, environment, new tech.,

• This is a time for positioning, securing resources; 2010

This is a time for positioning, securing resources; 2010

• Saudi Arabia has resources, energy, potential

Saudi Arabia has resources, energy, potential

• Strategic focus: RE, magnesite, bauxite, OFM,

Strategic focus: RE, magnesite, bauxite, OFM, speciality min. speciality min.

• IMs generally more resilient in recessions

IMs generally more resilient in recessions

Global trends in the industrial minerals industry: challenges & Global trends in the industrial minerals industry: challenges & opportunities

• pportunities

Mike O Mike O’ ’Driscoll, IM Driscoll, IM, Investment Opportunities in Saudi Industrial Minerals, , Investment Opportunities in Saudi Industrial Minerals, 9 March 2009, Jeddah 9 March 2009, Jeddah

• 4. Summary & conclusions
• 4. Summary & conclusions

Thank you for your kind attention Thank you for your kind attention