UNIVERSITY OF ZIMBABWE

DEPARTMENT OF MINING ENGINEERING

MINERAL ECONOMICS ASSIGNMENT

JAMES N. NYAGOMO R166254D

TITLE: ANALYSIS OF THE HISTORICAL TRENDS, PRICE

TRENDS AND FUTURE PROSPECTS OF MINERALS AND THEIR
DEMAND DRIVERS AND MAJOR USES, CONSUMERS AND
PRODUCERS
Contents
1 NICKEL......................................................................................................................................................4
1.1 HISTORICAL PRICE TENDS FOR NICKEL.............................................................................................5
1.2 NICKEL MAJOR SUPPLIERS................................................................................................................5
1.3 NICKEL MAJOR CONSUMERS............................................................................................................6
1.4 FUTURE FOR NICKEL..........................................................................................................................7
References...................................................................................................................................................7
2 PLATINUM GROUP METALS.....................................................................................................................8
2.1 HISTORY............................................................................................................................................8
2.2 DEMAND DRIVERS FOR PGMS..........................................................................................................8
2.2.1 PRICE TREND FOR THE PLATINUM GROUP METALS..................................................................8
2.3 PROPERTIES AND USES...................................................................................................................11
2.4 THE FUTURE OF PGMS....................................................................................................................11
2.4.1 EFFECT OF ELECTRIC VEHICLES EMERGENCE ON DEMAND FOR PGMS...................................12
2.5 MAJOR CONSUMERS (BY METRIC TONNES IN 2018)......................................................................13
2.6 MAJOR PRODUCERS........................................................................................................................13
References.................................................................................................................................................13
3 IRON.....................................................................................................................................................15
3.1 USES...............................................................................................................................................15
3.2 MAJOR CONSUMERS.......................................................................................................................15
3.3 HISTORICAL PRICE TRENDS.............................................................................................................16
3.4 MAJOR SUPPLIERS....................................................................................................................17
3.5 DEMAND DRIVERS..........................................................................................................................18
3.6 THE FUTURE OF IRON......................................................................................................................18
References.................................................................................................................................................19
4 CHROMITE.........................................................................................................................................20
4.1 USES OF CHROMITE.................................................................................................................20
4.3 HISTORICAL DEMAND TRENDS OF CHROMITE..............................................................21
4.4 MAJOR CONSUMERS OF CHROMITE...................................................................................22
4.5 DEMAND DRIVERS....................................................................................................................22
4.6 FUTURE PROSPECTS OF CHROMITE...................................................................................22
References.................................................................................................................................................22
5 LITHIUM.................................................................................................................................................23
 5.1 MAJOR USES OF LITHIUM...............................................................................................................23
5.2 HISTORICAL, CURRENT AND FUTURE DEMAND TRENDS................................................................24
5.3 MAJOR PRODUCERS........................................................................................................................25
5.4 MAJOR CONSUMERS.......................................................................................................................26
References.................................................................................................................................................26
1 NICKEL

Nickel is a silvery-white metal used mainly used in making stainless steel and other alloys
stronger and better able to withstand extreme temperatures and corrosive environments.
Due to that property of enhancing the extreme temperature tolerance of the alloys and
resistance to corrosion, Nickel bearing alloys are usually used in harsh environments such as
chemical plants, petroleum refineries, jet engines, power generation facilities and also in
offshore installations.
Medical equipment, cookware and cutlery are often made of stainless steel because of the ease
to clean and sterilize.
About 65% of nickel is used in stainless steel production (Thoughtco.com, 2018)
Given below is a pie chart that shows the uses of nickel

Source: https://blog.emew.com/411-on-nickel-powder
1.1 HISTORICAL PRICE TENDS FOR NICKEL

Price graph for Nickel from 2007 to February 2020 [ CITATION Lon20 \l 1033 ]

Historically nickel prices have been volatile and highly susceptible to changes in supply and
demand. The volatility is due to the fact that some consider nickel as a strategic mineral and
this results in sharp rises when consumers feel a threat of supply security for example the
prices for nickel in 2007 were high due to nickel shortages.
The stainless steel industry is a major driver consumer of nickel therefore the price trends for
nickel can be tied to those of iron.

1.2 NICKEL MAJOR SUPPLIERS

 Indonesia, Philippines, Canada, Australia and Russia. Given below is a pie chart that shows the
major nickel suppliers as of 2017
Nickel major suppliers in 2017. Source: [ CITATION Chr19 \l 1033 ]

1.3 NICKEL MAJOR CONSUMERS

Western Europe, China, Japan, India.

The consumption is driven by the attractive properties of nickel such as the low thermal
expansion of the alloy in gas tanks. It is also used in the manufacturing industry in making
stainless steel.
The European countries and China are at the forefront of promoting the use of environmentally
friendly sources of energy thereby resulting in increased demand for nickel in electric vehicles.

1.4 FUTURE FOR NICKEL

The demand for nickel in the future is expected to increase because of the stainless steel
industry which is driven by countries like China, Japan and India.
The emergence of electric vehicles is also expected to increase the demand for nickel because
the mineral is important in the making of lithium ion batteries. The demand is expected to
increase multi fold when the electric vehicles are now in full operation and nickel might replace
cobalt in the lithium ion batteries since cobalt is produced by the Democratic Republic of Congo
which is said to use child labour.[ CITATION ICI17 \l 1033 ]
There is also an expected deficit for nickel in the future since the demand will rise and the
suppliers would need to effect structural changes in production.

References
ICICI Securities, 2017. Market Wrap. [Online]
Available at: http://content.icicidirect.com/mailimages/Nickel.htm
[Accessed 6 february february 2020].
London Metal Exchange, 2020. LME NICKEL. [Online]
Available at: https://www.lme.com/metals/non-ferrous/nickel/#tab2&tabIndex=2
[Accessed 6 february 2020].
Woodford, C., 2019. Nickel. [Online]
Available at: https://www.explainthatstuff.com/nickel.html
[Accessed 6 february 2020].
2 PLATINUM GROUP METALS

2.1 HISTORY
Since World War II, platinum mine production has steadily grown in response to the
development of new applications.
One of the main new uses of platinum has been in the petroleum industry, where platinum
catalysts were introduced to increase gasoline octane rating and to produce important primary
feedstocks for the growing plastics industry.

Demand for platinum in jewellery experienced a spectacular rise in Japan during the 1960s,
appealing to the Japanese public for its purity, colour, prestige and value. Platinum jewellery
was later able to penetrate other markets-in Germany in the 1970s, in Switzerland and Italy in
the 1980s, and in the United Kingdom, the United States and China-today the world's largest
single platinum market

In 1974 the United States opened the era of the autocatalyst in which platinum group metals
(mainly platinum, palladium and rhodhium) are used to turn noxious gasses into hazardous
substances in exhaust vehicle by means of its new air quality regulations. Since it was
introduced, over 12 billion metric tons of emissions have been prevented from entering the
earth's atmosphere.
In the 1980s the rapid increase in value of precious metals like platinum gave rise to the
development of a number of bars and coins, many of which collectible objects. By the 1990s,
platinum was used to treat certain cancers and the same decade saw an increase of the use of
machine-consuming platinum alloys to treat heart and other diseases.[ CITATION Joh201 \l 1033 ]

2.2 DEMAND DRIVERS FOR PGMS

2.2.1 PRICE TREND FOR THE PLATINUM GROUP METALS

Price trends for Platinum, Palladium and Iridium from January 2000 to February 2020.[ CITATION
Joh20 \l 1033 ]
Chart showing the price trend for platinum from September 2008 to February 2020.[ CITATION eto20 \l
1033 ]

The graphs given above show that there has been an overall decline in the price of platinum
from 2011 to date, this decline in prices has been affecting the global production of platinum as
evidenced by the 13% drop in production by South Africa from 2011 to 2016. [ CITATION Ama18 \l
1033 ]

The price for platinum reached a record high of $2180 in February 2008 due to supply
interruptions in South Africa due to power crisis which affected mine production in January and
February 2008 [ CITATION Fig15 \l 1033 ]. At the given time South Africa supplied about 85% of
platinum world production and this resulted in a sharp increase since some mines were shut
down [ CITATION Isa15 \l 1033 ]. This was also in part due to the global financial market crash that
was taking place and this drove the prices up. The prices declined when the power supply
problems in South Africa were solved. This was also in part due to the financial crisis which
caused a decline in the demand for the metal as car manufacturers slowed down their production.
Between late 2009 and august 2011 there was a rise in the prices due to market crises being over
and the automotive industry was resurging. The demand in Europe also drove this price increase
since the there was demand for lighter vehicles which mainly are diesel engines which uses
platinum.
Looking at palladium, there has been a general increase in the price from late 2019 and it reached a
record high in february 2020 due to the supply which lags the demand. The prices have historically been
low because automobiles used diesel engines which use platinum but there has been a shift towards
using petrol engines which use palladium in the catalytic converters since most diesel car manufacturers
were falsifying the emissions data by the cars [ CITATION Edd20 \l 1033 ]. This move by governments of
imposing stricter regulations on emissions is increasing the demand for palladium yet the supply is still
limited.

Table 1. The proportion of the usage PGMs in the autocatalytic industry as compared to other industries

[ CITATION Max19 \l 1033 ]

2.3 PROPERTIES AND USES

Resistance to chemical attack therefore used as coatings on dimensionally stable titanium

anodes in production of chlorine.
Excellent high temperature characteristics makes them useful in making crucible materials
Stable electrical properties therefore used in low voltage and low energy contacts.
Used as catalysts in refining crude oil, reforming, in synthetic organic chemistry, oxidation
catalysts in automotive emissions
Platinum has wear and tarnish resistance properties that make it suitable in jewellery making.
Used in dental and medical devices, electronic devices such as computer hard disks, glass
manufacturing and investment.
In some cases the PGMs substitute themselves in their uses for example palladium is
substituting platinum in catalytic converters.
The mentioned properties creates uses that become a source of demand for the individual
minerals. Auto catalysts, jewellery, chemicals, dental, electrical, glass, medical field are the
main sources of demand for the platinum group metals.

The

2.4 THE FUTURE OF PGMS

The utility of platinum group metals in the industry is built on their unique properties, including
catalytic activity, high melting points, and chemical inertia through various temperature
variations. Thus, apart from their role in petrochemicals, plastics, and catalytic converters,
PGM’s are:

 essential components in computer hard drives to increase storage capacity

 used to coat electrodes

  active chemotherapy agents and an estimated half or more of all cancer patients
who receive chemotherapy are treated with drugs containing platinum

 ideal material for pacemakers, stents, implantable defibrillators, and catheters

PGMs also continue to play a role in investment and in the jewelry industry. [CITATION TMa19 \l
1033 ]

[ CITATION STE20 \l 1033 ]

Demand is unlikely to decline because the world countries have an agenda of

reducing the exhaust emissions into the environment. The advent of electric
vehicles might cause an

2.4.1 EFFECT OF ELECTRIC VEHICLES EMERGENCE ON DEMAND FOR PGMS

The emergence of electric vehicles is expected to cause a decrease in the demand for platinum
since approximately 40% of the globally produced platinum is used in the auto catalytic industry
and the electric vehicles do not need platinum. The demand is expected to gradually fall with
the substitution of electric vehicles in the market from about 3.4 million ounces in 2015 to 2.5
million ounces in 2050.
“Fuel cell cars might cause an increase in the demand for platinum from 3.4 million ounces in
2015 to 6.6 million ounces in 2050 if they gain traction in the European market” Chris Griffith
(chief executive at Anglo American Platinum, 2018).

The global production of platinum has been gradually falling in the past 5 years. The
unpredictability of the future technology might also improve the overall demand for platinum

2.5 MAJOR CONSUMERS (BY METRIC TONNES IN 2018)

China 71.92
Europe 64.48
Other countries 47.12
Japan 32.24
North America 32.24

2.6 MAJOR PRODUCERS

South Africa, Russia, Zimbabwe, Canada, United States America 

References
Anon., 2019. A Concise of PGM History. [Online]
Available at: https://www.scrapcatalyticconverters.com/a-concise-of-pgm-history/
[Accessed 6 february 2020].
etoro, 2020. etoro. [Online]
Available at: https://www.etoro.com/markets/platinum/stats
[Accessed 7 February 2020].

Johnson Matthey, 2020. Johnson Matthey. [Online]

Available at: http://www.platinum.matthey.com/prices/price-charts
[Accessed 6 february 2020].

Johnson Matthey, 2020. Johnson Matthey. [Online]

Available at: http://www.platinum.matthey.com/about-pgm/history-of-pgm
[Accessed 6 february 2020].

Kay, A., 2018. Will Platinum be Impacted by Electric Cars?. [Online]

Available at: https://investingnews.com/daily/resource-investing/precious-metals-investing/platinum-
investing/platinum-electric-cars/
[Accessed 6 february 2020].

Matchie, T., 2019. A Concise of PGM History. [Online]

Available at: https://www.scrapcatalyticconverters.com/a-concise-of-pgm-history/
[Accessed 6 february 2020].

Maxime, L., 2019. Future of auto catalyst configurations, impact on PGMs, and implications for
collectors. [Online]
Available at: https://www.scrapcatalyticconverters.com/future-complexities-of-auto-catalyst-
configurations-their-impact-on-platinum-group-metals-and-the-implications-for-collectors/
[Accessed 6 february 2020].

RAND, S., 2020. Platinum Price Forecast 2020. [Online]

Available at: https://www.sbcgold.com/blog/platinum-price-forecast-2020/
[Accessed 6 february 2020].
3 IRON

3.1 USES

Iron is a major raw material in the production of steel. Steel is also a major economic driver for
manufacturing industries of all countries. Given below are some of the uses of iron:

 Manufacture of steel used in civil engineering applications such as reinforced concrete,

girders etc.
 Used to make steel alloys such as carbon steels with additives such as nickel, chromium,
vanadium, manganese.
 Iron is used in the manufacture of magnets.
 Used in the making of car engines, bridges, rifle barrels, electricity pylons etc.

 Used as a catalyst in the Haber process for manufacturing ammonia which be further
processed.
 Used to make cast iron which can be used in pump and pipe making [ CITATION BYJ20 \l
1033 ]

3.2 MAJOR CONSUMERS

China, India, Japan, USA, South Korea and Russia

They have the largest steel manufacturing industries
Below is a pie chart that shows the consumption of steel by the major consumers in 2018

Usage of steel in 2018

3.3 HISTORICAL PRICE TRENDS

 Figure 3.3: Iron price trends from 2007 to February 2020[ CITATION Tra20 \l 1033 ]

Figure 3.3 above shows the average prices for iron ore over the last 13 years and there has been a
general decrease in the price of the commodity. The general decrease in the price can be attributed to
the slowing down of the growth of the Chinese manufacturing industry in 2016.

3.4 MAJOR SUPPLIERS

The suppliers are given in their corresponding global positions in production of iron ore as of August
2019: Australia, Brazil, China, India, Russia, South Africa, Ukraine, Canada, USA

Below is an extract that shows the production in 2017

 Source
: Maps of world[ CITATION Map18 \l 1033 ]

3.5 DEMAND DRIVERS

Construction.
Ship building.
Automotive Industry.
Real Estate (China).

3.6 THE FUTURE OF IRON

China is currently the leading consumer and producer of iron ore due to its steel making
industry, and the steady growth in demand is expected as the country is continues to grow and
the prices might be stable in the long run since China creates an almost perfect market.
The policies by the United States president in 2018 of putting 25% tariffs on all foreign steel
resulted in a sharp increase in the price of iron (main raw material for steel) as people feared
interruptions in supply.[ CITATION Don19 \l 1033 ] These policies can also cause unpredictable
changes in the prices of the commodity.
Developing countries should be looked at when projecting the future of iron ore demand
because when that phase comes the demand will most likely increase as compared to the
current demand.

References
BYJU'S Learning App, 2020. Iron Element - Fe. [Online]
Available at: https://byjus.com/chemistry/iron/
[Accessed 6 february 2020].

Lee, D., 2019. Trump’s steel tariffs were supposed to save the industry. They made things worse. [Online]

Available at: https://www.latimes.com/politics/story/2019-10-29/steel-industry-faces-a-bleaker-future-

than-when-trump-moved-to-rescue-it
[Accessed 7 february 2020].

Maps of World, 2018. What are the top 10 iron ore producing nations?. [Online]
Available at: https://www.mapsofworld.com/answers/economics/top-10-iron-ore-producing-nations/
[Accessed 7 February 2020].

Trading Economics, 2020. Iron Ore. [Online]

Available at: https://tradingeconomics.com/commodity/iron-ore
[Accessed 6 february 2020].
4 CHROMITE

4.1 USES OF CHROMITE

Chromite is categorized as chemical, foundry sand, metallurgical, and refractory by the ICDA
which reports world production of chromite. Some of the major uses are given are: to
manufacture stainless steel, nonferrous alloys, metal plating, pigments, leather processing,
catalysts, surface treatments, refractories, wood preservation
Use of chromium in iron, steel, and nonferrous alloys increases corrosion and oxidation
resistance and hardenability of the metals.

4.2 MAJOR PRODUCERS

These involve themselves in the mining of stratiform layered chromite deposits. According to
Loock et al (2014), South Africa has approximately three-quarters of the world’s workable
chromite reserves. Zimbabwe is the only country to exploit both stratiform and podiform
deposits. As of 2018 about 80% of the world production of chromite ore originated from four
countries which are South Africa, Kazakhstan, India, and Turkey. [ CITATION Ama181 \l 1033 ]
Figure 4.2 below shows the world production of chromite for the year 2018
 16
14 15

12
Production(MT)

10
8
6 6.6
5.4
4
2 3.2 2.8
0
Country

South Africa Kazakhstan India

Turkey Rest of the World
Figure 4.2

4.3 HISTORICAL DEMAND TRENDS OF CHROMITE

The demand for chromite in its early days of production was low as chromite was mainly
restricted to the textile trade, where potassium dichromate was used in the dying process. The
demand for chromite rose as a result of the emergence of leather tanning salts. A huge notable
change in the demand for chromite was seen in 1865 when the first patent rights in steel
production were granted, although the large scale use of chromite began in the early 1900s.
The electric arc furnace commenced use and was able smelt chromite into the master alloys
which were used as a feedstock to produce other alloy metals. Chromite was commonly used in
metal finishing and stainless steel. Since 1960, major changes have been witnessed due to the
change in the steel making technology. The main application of chromite ore is in metallurgical
processes, after conversion of chromite into ferrochrome. Close to 90% of all chromite ore is
used in stainless-steel production. Steady progression in global chromite ore sand concentrates
production caused a rise in demand from the ferrochrome and stainless-steel markets, with
China accounting for 36% and 52% of global ferrochrome and stainless-steel production,
respectively. The demand for chemical-type ores has also increased with the operation of
sodium dichromate-producing factories. Over the years, the annual demand for metallurgic
ores is estimated to be 442,000 tons. The produced chromite ore is consumed mostly by the
iron-steel (about 85%) and chemical industries (about 15%). The stainless-steel industry
consumes 80-90% of ferrochrome, primarily as high-carbon or charge-grade ferrochrome.
Approximately 2.0% of the demand comes from the chemical industry, and the rest from
refractory (0.20%) and foundry sand industries (2%) (Richard, 2015).
The global production of chromite has been fuelled by the growth of the manufacturing
industries of China and India.
Figure 4.3 shows the global usage of chromite in the year 2014
Figure 4.3: World chromite usage in 2014

4.4 MAJOR CONSUMERS OF CHROMITE

China as provided by the USGS, Japan, India

4.5 DEMAND DRIVERS

 The stainless steel industry.

 The industrialization of countries

4.6 FUTURE PROSPECTS OF CHROMITE

In the short term as China continues to grow the demand for chromite will most likely see a
steady growth since chrome is a major raw material for stainless steel.
The industrialization of African nations is most likely going to increase the demand for chromite
as well.

References
Kay, A., 2018. 4 Countries with the World’s Highest Chromium Production. [Online]
Available at: https://investingnews.com/daily/resource-investing/industrial-metals-investing/chromium-
investing/top-chromium-producers/
[Accessed 7 february 2020].
5 LITHIUM

5.1 MAJOR USES OF LITHIUM

Making of batteries - used to make lithium ion batteries which are rechargeable and disposable
Ceramics - lithium oxide is used as a flux in the processing of silica
Lubricating grease
Air treatment
Making polymers
Primary aluminum production
Continuous casting
Also used in the medical field in treating.
Pie chart showing the usage of Lithium as market percentages given below.

Market fraction

Battery
5% Ceramics
10%
Lithium soap
3% Lithium polymers
5% 39%
Air Treatment
8% Miscellaneous
Other

30%

[ CITATION
Com19 \l 1033 ]

5.2 HISTORICAL, CURRENT AND FUTURE DEMAND TRENDS

Historically large quantities of lithium (32%) have been used in the ceramics and glass
manufacturing industry. Historical demand trends show a continuous increase in the metals’
demand except only for 2008 due to the world economic crisis the demand decreased by 26%.
A relatively new and potentially growing use of lithium-ion batteries is in electricity grid storage
systems. In an effort to promote the use of clean energy, world policy makers are advocating
for the use of renewable sources of energy such as solar power and wind energy will result in a
shift of demand for lithium upwards. Batteries are the main energy storage systems and
lithium-ion batteries are the most preferred batteries for storage of energy. The emergence of
electric vehicles is contributing to the hike of demand for lithium to continuously shift as shown
by Figure 2. It is projected that lithium demand will rise to 500000 metric tonnes per year by
2025 as shown in Figure 5.2. Use of portable computers and the growing demand for smart
phones is also another driver for lithium demand increase. Therefore, advance in technology is
the major driver of the hike in the demand for lithium. The government subsidies offered by
China on long range driving electric vehicles is a major contributor to the increase in the
demand for lithium.The European union’s drive to have electric vehicles by 2040 is one of the
contributing factors for the most likely increase in the demand for lithium
Figure 5.2. Showing supply and demand projections until 2025.[ CITATION Com19 \l 1033 ]
 

5.3 MAJOR PRODUCERS

As of 2019, the major producers for lithium were Australia, Chile, China, Argentina and
Zimbabwe. Given below in figure 5.3 are the production figures for the year according to NS
Energy

60000

50000
51000

40000
Production(MT)

30000

20000
16000
10000
8000 6200
0 1600
Country

Australia Chile China Argentina Zimbabwe

Figure 5.3 Showing production in metric tonnes.[ CITATION NSE19 \l 1033 ]

5.4 MAJOR CONSUMERS

The major global consumers of lithium are China, South Korea, India, Japan, USA, Australia and
New Zealand.

References
Commodity.com, 2019. Lithium: What Role Is Tesla Playing In The Demand For This Precious
Metal?. [Online]
Available at: https://commodity.com/precious-metals/lithium/
[Accessed 6 february 2020].
NS Energy, 2019. Which are the biggest lithium-producing countries in the world?. [Online]
Available at: https://www.nsenergybusiness.com/features/top-lithium-producing-countries/
[Accessed 6 February 2020].