Current trends in global metal markets industry responses

Transcription

1 Bergforsk Luleå 24th May 2007 Current trends in global metal markets industry responses Vanadium drawing: Kaianders Sempler. Magnus Ericsson

2 Title page of first edition of Ulrich von Rülein s Ein nutzlich bergbuchleyn Calw c. 1500

3 AGENDA METALS DEMAND GLOBAL MINING STAKEHOLDER RESPONSES EXPLORATION & INVESTMENTS THE BALTIC MINING CLUSTER CONCLUSIONS

4 REM drawing: Kaianders Sempler. DEMAND

5 Anton Löf

6 COPPER PRICES USD/t

7 COPPER USE vs GDP/capita Source: Häggström Ericsson, Handelsbanken 2006.

8 2004 COPPER USE vs GDP Source: Häggström Ericsson, Handelsbanken 2006.

9 DEMAND Extended period of growth. China, India engines but East Europe, CIS also strong. Infrastructural investments & personal consumption. No signs of weakening BUT it will come to end.

10 GLOBAL MINING- STAKEHOLDER RESPONSES Nickel drawing: Kaianders Sempler.

11 GLOBAL MINING - GEOGRAPHY 17. Sweden 0.66 % Anton Löf

12 VALUE OF WORLD MINING YEAR 2005 TOTAL ~ 910 billion USD 51% 14% Metals Industrial minerals 27% Diamonds Coal & uranium Crushed rock 2% 6% Source: Raw Materials Group, Stockholm Anton Löf

13 METALS VALUE AT MINE YEAR 2005 TOTAL ~ 250 billion USD 4% 7% 6% 2% 11% 23% 29% Source: Raw Materials Group, Stockholm % Gold Iron ore Copper Nickel Zinc/lead PGMs Bauxite Other Anton Löf

14 MINING COMPANIES Total companies Majors Medium & small Juniors Source: Raw Materials Data, Stockholm Anton Löf

15 CONTROL OF MINING Metals total 250 billion USD 90 Majors Medium & small Juniors 10 Source: Raw Materials Data, Stockholm Anton Löf

16 M&A vs METAL PRICES MUSD Metalprice Index Source: Raw Materials Group, Stockholm Anton Löf

17 RMG TOP COMPANIES 2005 Metals & Coal Controlling company Country Share of value of Cumulative mine production (%) value (%) 1 Rio Tinto UK BHP Billiton Australia Anglo American UK State of India India CVRD Brazil Peabody Energy USA Codelco Chile State of Poland Poland Sweden 0.6 ~50 Sweden 0.3 Sweden 0.2 Sweden/Canada Source: Raw Materials Data, Stockholm Anton Löf

18 RMG TOP COMPANIES Metals & Coal Controlling company Country Share of value of Cumulative mine production (%) value (%) 1 Rio Tinto UK BHP Billiton Australia Anglo American UK State of India India CVRD Brazil Peabody Energy USA Codelco Chile State of Poland Poland Vattenfall Sweden 0.6 ~50 LKAB Sweden 0.3 Boliden Sweden 0.2 Lundin Mining Sweden/Canada Source: Raw Materials Data, Stockholm Anton Löf

19 RMG TOP COMPANIES 2006 Metals Controlling company Country Share of value of Cumulative mine production (%) value (%) 1 CVRD Brazil Anglo American UK BHP Billiton Austr Rio Tinto UK Phelps Dodge/Freeport USA Codelco Chile Norilsk Nickel Russia Xstrata/Falconbridge Canada LKAB Sweden Boliden Sweden Lundin Mining Sweden/Canada Source: Raw Materials Data, Stockholm Anton Löf

20 GEOGRAPHICAL CONCENTRATION Cobalt Chrome Molybdenum Tin Tantalum Platinum Tungsten Congo Canada Zambia South Africa Kazakhstan India USA Chile Indonesia China Source: Raw Materials Data China South Africa Russia Peru Australia Mocambique Brazil China Canada Canada Australia % of world production

21 CORPORATE CONCENTRATION Nickel Molybdenum Chromite Titanium Tantalum Platinum Palladium Norilsk Inco BHP Billiton Codelco Phelps Dodge Grupo Mexico Euroasian Kermas Xstrata Rio Tinto Iluka Anglo Sons of Gwalia Cabot Anglo Impala Norilsk Norilsk Anglo Impala Source: Raw Materials Data % of world production

22 IRON ORE DEMAND Domestic/import South Korea USA India Russia Japan EU 27 China Import dependence 100 % 23 % 0 % 11 % 100 % 88 % 58 % Source: UNCTAD, RMG Mt iron ore

23 PRODUCTION BY FOREIGN COMPANIES Bauxite Copper Gold Zinc Nickel Iron ore % of world Source: Raw Materials Data production Anton Löf

24 GLOBAL MINING STAKEHOLDER RESPONSES Intensive activity, but slow supply increase. NGOs and TNCs less in focus. New companies entering the scene. Security of supply an issue - again. More state intervention - again. Speed of change will increase.

25 EXPLORATION & INVESTMENTS Tantalum drawing: Kaianders Sempler.

26 GLOBAL EXPLORATION Billion USD Sources: RMG, MEG. Projected

27 MINING PROJECTS UNDER CONSTRUCTION % 5-10 % Source: Raw Materials Group 2006.

28 EXPLORATION IN THE NORDIC COUNTRIES MEUR Projected Sweden Norway Greenland Finland Sources: RMG est., Geological Surveys in each country, Anton Löf

29 HARSH CONDITIONS REMOTE AREAS

30 LOWER ORE GRADES

31 TECHNICAL DEVELOPMENT Drilling technology during 100 years

32 CASH COSTS GOLD Source: Raw Materials Group, World Bank Anton Löf

33 EXPLORATION & INVESTMENTS More exploration necessary. Exploration more difficult. Financial engineering: Flow-through tax relief! Nordic Mining Fund. Production costs increasing. Expanded R&D, but slow too slow? Anton Löf

34 BALTIC MINING CLUSTER Manganese drawing: Kaianders Sempler.

35 MINING CLUSTER IN NORTHERN EUROPE BOTHNIAN BARENTS BALTIC Source: Noras, Ericsson 2006.

36 MINING PROJECTS Source: Raw Materials Data, Stockholm 2007.

37 BOTHNIAN CLUSTER MARKET SHARES Mining Exploration Smelting Flash smelters Drill units SAG mills % ESTIMATE OF TOTAL WORLD Source: Noras, Ericsson 2006.

38 BALTIC MINING CLUSTER Excellent basis for Baltic cluster. Platform for global cooperation: Technical: R&D and training. Legal: Coordinate legislation. Mapping/promotion: Merge geological surveys! Environment: coordinate regulations Anton Löf

39 CONCLUSIONS GLOBAL MARKET REGIONAL SOLUTIONS R&D - THE HEART OF THE MATTER MINING - IN FOCUS FOR YEARS Anton Löf

40 THANK YOU! Tungsten drawing: Kaianders Sempler.