Beamer BGR

1
The Importance of the Mineral Raw Materials
Supply in Respect to the Competitiveness of the
European Economy
MAEGS 15 17th September 2007, Tallinn
Dr. Volker Steinbach BGR - Bundesanstalt für
Geowissenschaften und Rohstoffe
BGR - Federal Institute for Geosciences and
Natural Resources
2
(No Transcript)
3
Relative Price Development of the LME Metals
5
prices April 11 spot prices
2 853 US / t
Aluminium Lead Copper Nickel Zinc Tin
4
2 045 US / t
7 971 US / t
50 800 US / t
3 582 US / t
14 435 US / t
3
2
1
Source BGR database
0
2000
2001
2002
2003
2004
2005
2006
4
Current Situation in the Raw Materials Sector

• High demand by China, but also
• Low investment in mining and processing
• Low exploration expenditures
• Transport shortages
• High demand from other highly populated countries

5
Comparison CHINA - Germany
people to newly manufactured cars
Source VDA, BGR
Germany
PR China
1996
1 car on 3 625 people
1 car on 23 people
6
Comparison CHINA - Germany
people to newly manufactured cars
Source VDA, BGR
Germany
PR China
2006
1 car on 305 people
1 car on 15 people
7
Chinas Share of World Consumption in 2005
Source BGR
8
Chinas Share of World Production and Projected
Chinese Foreign Investments
Source BGR
9
Where Are the Major Metal Reserves Situated ?
(Distribution of more than 50 of the global
proven and probable reserves)
Russia
Poland
18
22
6
35
USA
7
31
Jamaica
China
Kazakhstan
9
32
7
Iron Ore
18
Guinea
Indonesia
Bauxite
30
Brazil
14
Chromite
88
Chile
19
Copper
12
PGM
Australia
RSA
REE
Sources BGR database, USGS
10
Mine and Refined Production in 2005 Europe -
World
mine production
refined production
 
100
97.6
94.4
97.9
94.5
97.0
90.8
82.6
84.3
83.6
79.3
76.7
84.8
80
60
40
20
17.4
15.7
20.7
23.3
15.2
16.4
0
Al
Pb
Fe
Cu
Ni
Zn
Bauxite
Crude Steel
Source BGR database
11
EU Import Dependency of Metallic Raw Materials in
2005
EU Metals Industry in 2005 World Ranking
Nickel
Lead
Zinc
Copper
Aluminium
----
5
4
5
----
Mining
5
2
2
2
3
Refining
2
1
1
1
n.a.
1st Stage processing
Source Euromines
12
Scenario Projected World Steel Comsumption
Average growth rates 1970 2005 (3,7 )
1 400
India
5.9
9.0
PR China
1 200
-1.0
USSR / Russian Federation
OECD and Eastern Europe
0.9
1 000
800
crude steel consumption mill.t
600
400
200
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
Source BGR database
13
Flows of Seaborne Iron Ore Trade In 1960 121
mill. t
1
20
15
17
3
5
7
9
5
1
19
6
5
5
5
Sources ThyssenKrupp Steel, BGS
14
Flows of Seaborne Iron Ore Trade In 2001 441
mill. t
2
14
17
35
10
7
4
155
24
166
6
1
Sources ThyssenKrupp Steel, BGS
15
Flows of Seaborne Iron Ore Trade In 2006 725
mill. t
Three companies are controlling 71 of the
seaborne iron ore trade BHP Billiton, CVRD, Rio
Tinto
2
18.5
21.5
95
11
8.5
6.2
255
30
270
8
1
Sources ThyssenKrupp Steel, Eurostat
16
Iron Ore European Production and Imports in 2005
Imports 146 200 000 t
RoW 23 Countries
RSA
10.7
4.9
Russia
6.3
Production 27 032 950 t Sweden 23 256 000 t
Brazil
Mauritania
7.0
47.8
7.3
Canada
Rest of Europe
7.3
2.1  
8.7
Ukraine
Australia
Sweden
Sources Eurostat, BGR database
17
Copper European Imports and Production in 2005
Imports 2 700 000 t
RoW 18 Countries
Turkey
PNG
2.5
3.6
Brazil
3.7
3.8
Argentina
Chile
10.9
Production 836 500 t
34.0
Poland 511 500 t
Peru
14.9
Poland
Indonesia
26.5
Rest of Europe
Sources Eurostat, BGR database
18
Availability of Mineral Raw Materials
supply and demand
increasing demand

• bigger reserves
• higher lifetimes
• no shortages

rising prices

• higher recycling rates
• more substitution
• miniaturisation

• - human creativity
• new technical methods
• higher research efforts

• new deposits/types
• low-grade deposits are becoming economic
• - new raw material sources

• - human creativity
• higher exploration efforts
• engaging in higher exploration risks

19
Worldwide Exploration Budgets (NF Metals) vs CRB
Metals Sub-Index
8
800
7
700
6
600
5
500
CRB Metals Sub-Index
US billion
4
400
3
300
2
200
1
100
1992
1994
1996
1998
2000
2002
2004
2006
Sources Metals Economics Group, Reuters
20
If Monsieur Eiffel built his tower today
he would need just 30 of the steel
7 000 t
7 000 t
2 100 t
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Geological Aspects of the Availability
ofMetallic Raw Materials

• In the foreseeable future there will be no
  limitation to the availability of metallic raw
  materials. Their availability is a question of
  costs and of market access.

• Metallic raw materials are unevenly distributed
  in the world.

• The occurrences of metallic raw materials are
  depending on the geology.

• Commodity markets are global markets.

• We can secure the availability of metallic raw
  materials in the long term by domestic
  production, technical development, substitution,
  efficient use, recycling, and promotion of free
  and fair trading conditions on the world markets.

22
Exploration of new mineral deposits, Technological
development Recycling, substitution, material
efficiency Promoting free and fair trading
conditions
Sources BASF, Pics Boatnerd, BGR
23
The European Market Situation
- Mineral raw materials are unequally distributed
in the world
- Commodity markets are global markets
- Europe is customer throughout the world