Global Word Mineral Production TrendsWhy are some Minerals critical for the European Union ?

L. Weber 1 & C. Reichl 2, Vienna1 Vice Chairman IOC World Mining Congress

2 Austrian Federal Ministry for Science, Research and Economy

World mining production shows a remarkable increase in production in particular since 2003. In 2012 16,8 billion t of minerals (without construction minerals) have been mined. Energy fuels contribute by far with 86.5 % of the total production (Fig. 1).

Fig. 1 World mining production, by groups of minerals

Asia is the by far most important mining continent, contributing more than 58 % of the world mining production (Fig. 2).

Fig. 2 World mining production, by groups of contintents

The BRICS (Brazil, Russia, India, China and recently South Africa) are the most important mining countries showing a continuous increasing mining production trend (Fig. 3).

Fig. 3 World mining production, BRICS, European Union vs rest of world

Fig. 4 shows the different production trends of Europe, the European Union and for comparison the newly formed Eurasian Union (Russia, Kazachsthan and Belarus). The production of the Eurasian Union is double than the production of the European Union.

Fig. 4 World mining production vs Europe, European Union and newly formed Eurasian Union

However, two thirds of the word mining production are coming from political instable countries. The mining production of stable countries is with 1,2% extremely poor (Fig. 5).

Fig. 5 World mining production, by political stability of the producer countries

By volume China is the world largest producer of 28 mineral commodities. Kazachsthan as an important mining country is number 12 of more than 170 mining countries (Fig. 6).

Fig. 6 mining production of the top 20 mineral producing countries

By value China is the largest mining country as well, with Kazachsthan as number 13 (Fig. 7).

Fig. 7 mining production of the top 20 mineral producoing countries, by value

The value of the world minerals production is 5732 Billion US$ , which is a raise of 0,36% only compared with the previous year (Fig. 7).

Why are some minerals critical ?

In 2010 the criticality of minerals has been evaluated by a working group of the Raw materials Supply Group of the European Commission.

The criticality of a mineral is the product of 1) the supply risk and2) the economic importance

both results displayed in an xy diagram.The higher the supply risk and the higher the economic importance, the higher the criticality of a particular mineral commodity (Fig. 8).

Fig. 8: Crititality diagram of minerals

Fig. 9 Supply Risk Index

The supply risk is the result of a simple formula respecting 1) substitutability (factors between 0 and 1)2) recycling rate (factor between 0 and 1) and

the Herfindal Hirschmann Index multiplied with the World Governance Index (Fig. 9).

Fig. 10: The Herfindahl – Hirschmann Index (HHI)

Fig. 11: Example for a HHI (Antimony).

Since 2008 the Austrian Federal published the HHI as a measure of country concentrations in its WORLD MINING DATA for each commodity. This figures were the base for the criticality assessment of the European Commission (Hig. 10, 11).

The second term in this formula is the World Governance Index, published annually by World Bank.

The Worldwide Governance Indicators aggregate indicators of six broad dimensions of governance:

Voice and Accountability Political Stability and Absence of Violence/Terrorism Government Effectiveness Regulatory Quality Rule of Law Control of Corruption

The values ranges between -2,5 for political extreme unstable countries to 2.5 for political stable countries and have been standardized as values between 0 and 10 for this particular purpose.

The economic importance index is the quotient of the weighed sums of the single megasectors (expressed as the added value) and the European gross domestic product (Fig. 12)

Fig. 12 Economic Importance Index

In 2010 41 non energy minerals have been devaluated for criticality. Of them 14 minerals have been identified as being critical:antimony, beryllium, cobalt, columbium-tantalum, fluorspar, gallium, germanium, grafite, indium, magnesium, PGE, rare earths, tungsten (Fig. 12).

Fig. 12 Critical Minerals (2010)

The same exercise was done in the past month. Using the same methodology 54 minerals have been evaluated. Of them antimony, beryllium, borates, coking coal, chromium, cobalt, fluorspar, gallium, germanium, indium, magnesite, magnesium, natural graphite, niobium, phosphate rocks, PGE, heavy and light REE, silicon metal and tungsten (Fig. 13).

Fig. 13 Critical minerals (2014)

Fig. 14 shows the criticality of the 2010 exercise with three clouds:The cloud in the upper right quadrangle includes the 14 minerals identified as critical. The cloud in the lower right quadrangle potential critical minerals.

Fig. 14: Critical minerals (2010)

Fig. 15 shows the results of the most recent exercise, published end of May 2014.

Fig. 15: Critical minerals (2014)

Literature:

World Mining Data 2014: editor: Austrian Federal Ministry of Science, Research and Economychristian.reichl@bmwfw.gv.at http://www.en.bmwfw.gv.at/Energy/WorldMiningData/Seiten/default.aspx

World Governance Index: editor: World Bankhttp://info.worldbank.org/governance/wgi/index.aspx#home http://ssrn.com/abstract=1682130

Report on Critical Raw Materials for the EU: editor: DG Enterprise and Industryhttp://ec.europa.eu/enterprise/policies/raw-materials/critical/index_en.htm