Dr. Volker Steinbach BGR - Bundesanstalt für Geowissenschaften und Rohstoffe

B1 – Natural Resources, International Cooperation

Dr. Volker Steinbach

BGR - Bundesanstalt für Geowissenschaften und Rohstoffe

BGR - Federal Institute for Geosciences and Natural Resources

MAEGS 1517th September 2007, Tallinn


Relative Price Development of the LME MetalsRelative Price Development of the LME MetalsRelative Price Development of the LME MetalsRelative Price Development of the LME Metals

1

2

3

4

5

2000 2001 2002 2003 2004 2005 2006

AluminiumLeadCopperNickelZincTin

0

prices April 11 spot prices

2 853 US $/ t2 045 US $/ t7 971 US $/ t

50 800 US $/ t3 582 US $/ t

14 435 US $/ t

Source: BGR database


• High demand by China, but also:

• Low investment in mining and processing

• Low exploration expenditures

• Transport shortages

• High demand from other highly populated countries

Current Situation in the Raw Materials SectorCurrent Situation in the Raw Materials SectorCurrent Situation in the Raw Materials SectorCurrent Situation in the Raw Materials Sector


Comparison CHINA - GermanyComparison CHINA - GermanyComparison CHINA - GermanyComparison CHINA - Germanypeople to newly manufactured cars

1 car on 3 625 people 1 car on 23 people

19961996

Source: VDA, BGR


ComparisonComparison CHINA - Germany CHINA - GermanyComparisonComparison CHINA - Germany CHINA - Germanypeople to newly manufactured carspeople to newly manufactured cars

1 car on 305 people 1 car on 15 people

20062006

Source: VDA, BGR


China‘s Share of World Consumption in 2005China‘s Share of World Consumption in 2005China‘s Share of World Consumption in 2005China‘s Share of World Consumption in 2005

Source: BGR


China‘s Share of World Production China‘s Share of World Production and Projected Chinese Foreign Investmentsand Projected Chinese Foreign Investments

China‘s Share of World Production China‘s Share of World Production and Projected Chinese Foreign Investmentsand Projected Chinese Foreign Investments

Source: BGR


Where Are the Major Metal Reserves Situated ?Where Are the Major Metal Reserves Situated ? (Distribution of more than 50 % of the global proven and probable (Distribution of more than 50 % of the global proven and probable

reserves)reserves)

Where Are the Major Metal Reserves Situated ?Where Are the Major Metal Reserves Situated ? (Distribution of more than 50 % of the global proven and probable (Distribution of more than 50 % of the global proven and probable

reserves)reserves)

REE

PGM

Copper

Chromite

Bauxite

Iron Ore 18%

18%

14%

35%

12%

RSA

Russia

Kazakhstan

Australia

Brazil

Chile88%

32%

Guinea

19%

9%Jamaica

30%

22%

7%

7%

6%

USA

Poland

Indonesia

China

Sources: BGR database, USGS

31%


20

40

60

80

100

Bauxite

%

Pb

97.6 94.4

Fe

97.9 94.5

Cu

97.0

Ni

90.8

Zn

Mine and Refined Production in 2005:Mine and Refined Production in 2005:Europe - WorldEurope - WorldMine and Refined Production in 2005:Mine and Refined Production in 2005:Europe - WorldEurope - World

0


CrudeSteel

82.6

17.4

84.3

15.7

83.6

Al

16.4

79.3

20.7

76.7

23.3

84.8

15.2

mine production

refined production


2111n.a.1st Stage processing

52223Refining

----545----Mining

NickelLeadZincCopperAluminium

EU Import Dependency of Metallic Raw Materials in 2005EU Import Dependency of Metallic Raw Materials in 2005EU Import Dependency of Metallic Raw Materials in 2005EU Import Dependency of Metallic Raw Materials in 2005

Source: Euromines

EU Metals Industry in 2005: World RankingEU Metals Industry in 2005: World RankingEU Metals Industry in 2005: World RankingEU Metals Industry in 2005: World Ranking

AluminiumBauxite

Copper Zinc Lead Nickel

Demand % of World

26.5 % 22.9 % 22.6 % 23.4 % 31.8 %

Degree of EU Import Dependency

80 % 74 % 80 % 76 % 86 %


Scenario: Projected World Steel ComsumptionScenario: Projected World Steel ComsumptionScenario: Projected World Steel ComsumptionScenario: Projected World Steel Comsumption

crud

e s

teel co

nsu

mpti

on m

ill.t

200

400

600

800

1 000

1 200

1 400

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

India PR China

USSR / Russian Federation OECD and Eastern

Europe

5.9 %9.0 %-1.0

%0.9 %


Average growth rates 1970 – 2005 (3,7 %):


Flows of Seaborne Iron Ore TradeFlows of Seaborne Iron Ore Trade In 1960: 121 mill. t In 1960: 121 mill. t


Sources: ThyssenKrupp Steel, BGS

5

120

19

5

15

3

5

5 1

9

6

7

17

5

11 exports in mill. t





16

214

7

10

4155

24 166

35

17

Sources: ThyssenKrupp Steel, BGS




18

218.5

8.5

11

6.2

30 270

95

21.5

Three companies are controlling 71 % of the seaborne iron ore trade:BHP Billiton, CVRD, Rio Tinto

Sources: ThyssenKrupp Steel, Eurostat


255


RoW: 23 Countries

Imports: 146 200 000 t

Iron Ore: European Production and Imports in 2005Iron Ore: European Production and Imports in 2005Iron Ore: European Production and Imports in 2005Iron Ore: European Production and Imports in 2005

47.8

8.77.3

7.3

7.0

6.3

4.9

10.7

Brazil

Australia

Ukraine

Canada

Mauritania

Russia

RSA

Production: 27 032 950 t

Sweden: 23 256 000 t

Rest of Europe2.1 %

Sweden

Sources: Eurostat, BGR database


Availability of Mineral Raw Materials Availability of Mineral Raw Materials Availability of Mineral Raw Materials Availability of Mineral Raw Materials

increasing demandincreasing demand

rising pricesrising prices

- higher recycling rates- more substitution

- miniaturisation

- higher recycling rates- more substitution

- miniaturisation

- new deposits/types- low-grade deposits are becoming economic

- new raw material sources

- new deposits/types- low-grade deposits are becoming economic

- new raw material sources

supply and demand supply and demand

- human creativity- new technical methods- higher research efforts

- human creativity- new technical methods- higher research efforts

- human creativity- higher exploration efforts

- engaging in higher exploration risks

- human creativity- higher exploration efforts

- engaging in higher exploration risks

- bigger reserves- higher lifetimes- no shortages

- bigger reserves- higher lifetimes- no shortages


1

2

3

4

5

6

7

8

1992 1994 1996 1998 2000 2002 2004 2006

100

200

300

400

500

600

700

800 U

S$

billi

on

CR

B M

etals Sub-Index

Worldwide Exploration Budgets (NF Metals)Worldwide Exploration Budgets (NF Metals)

vs CRB Metals Sub-Indexvs CRB Metals Sub-Index

Worldwide Exploration Budgets (NF Metals)Worldwide Exploration Budgets (NF Metals)

vs CRB Metals Sub-Indexvs CRB Metals Sub-Index

Sources: Metals Economics Group, Reuters


7 000 t

If Monsieur Eiffel built his tower today…If Monsieur Eiffel built his tower today…If Monsieur Eiffel built his tower today…If Monsieur Eiffel built his tower today…

he would need just 30 % of the steel …he would need just 30 % of the steel …he would need just 30 % of the steel …he would need just 30 % of the steel …

7 000 t

2 100 t


Geological Aspects of the Availability ofGeological Aspects of the Availability ofMetallic Raw MaterialsMetallic Raw Materials

Geological Aspects of the Availability ofGeological Aspects of the Availability ofMetallic Raw MaterialsMetallic 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.

• 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.

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


Exploration of new mineral deposits,Exploration of new mineral deposits,

Technological development: Technological development:

Recycling, substitution, material efficiencyRecycling, substitution, material efficiency

Promoting free and fair trading conditionsPromoting free and fair trading conditions

Exploration of new mineral deposits,Exploration of new mineral deposits,

Technological development: Technological development:

Recycling, substitution, material efficiencyRecycling, substitution, material efficiency

Promoting free and fair trading conditionsPromoting free and fair trading conditions

Sources: BASF,Pics Boatnerd, BGR


- Europe is customer throughout the world

The European Market SituationThe European Market SituationThe European Market SituationThe European Market Situation

Europe needs open and transparent markets !

- Mineral raw materials are unequally distributed in the world

- Commodity markets are global markets

Dr. Volker Steinbach BGR - Bundesanstalt für Geowissenschaften und Rohstoffe

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