About Niobium

119-157_thumbNiobium (Nb) is an alloying agent which, when added to steel, creates a material with substantial benefits. Niobium is a rare and a soft transition metal primarily used in the production of high-grade steel. Steel containing niobium has many properties making it stronger, lighter in weight and highly resistant to corrosion. Adding niobium to steel also creates steel with a higher melting point. Ferroniobium represents over 90% of world niobium production. Molybdenum and vanadium can be substituted for niobium in some applications, but a performance or cost penalty may outweigh substitution. For many applications, such as some superalloys and oil and gas pipelines, there are no substitutes for niobium as the niobium allows for withstanding extreme pressures.

Niobium Uses: Primarily used for High Strength Low Alloy (HSLA) steel (FeNb):

Car_-_Nb_Weight_SavingsConstruction & Steel Mega-Projects: 45% of FeNb Market Car
HSLA for lightweight structures that require additional strength and corrosion resistance
High strength reinforcing bars require high yield strength and weldability

Automotive Industry: 23%
Stronger and lighter – improved fuel efficiency due to weight reduction

Oil and Gas Pipelines: 16%
Superior ability to withstand increased pressure and volumes over greater distances (substitution of niobium is not possible)

Shipbuilding: 6% of FeNb Market Bridge
HSLA allows for lighter ships with lower fuel consumption. Adds strength and weldability

Bridge_-_Nb_Weight_SavingsStainless Steel: 3%
Nb reduces corrosion and improves high-temperature behavior

Superalloys & High Strength Q&T plate: 3%
Used in the aerospace industry (jet turbines)
MRI machines (superconducting NbTi Alloy magnets)

 

 

Niobium is at the top of American Resources Risk Pyramid due to high supply concentration and its economic importance for the American Economy (See Below)

risk pyramid

Niobium Market Demand Growth:

  • Niobium production is highly concentrated in Brazil which produces (92%) the rest is produced in Canada (8%)
  • Niobium is considered a “strategic metal” by the US, as it is essential for National Security and industry
  • “Niobium demand has grown at a 10% compound annual growth rate over the last 10 years and is forecast to increase steadily going forward.” Carol Banducci, CFO, IAMGOLD
  • Only 10% of worldwide steel production contains niobium – expected to rise to as much as 20%
  • Developed countries utilize roughly 100 g/t of steel – while China only utilizes 40 g/t
  • China produces almost 40% of world steel, but currently consumes a much smaller percentage of world Niobium production than their steel production would suggest, but they are expected to grow their Niobium consumption to match steel production

Who Produces Niobium and Where:

Brazil is the world’s largest producer of niobium (92%), followed by Canada. Brazil has two of the largest niobium deposits in the world, the Araxá, and the Catalão deposits. The Araxá mine is operated by CBMM, decreasing grades are increasing operating costs at the mine. The Catalão mine owned by Anglo American Brazil may run out of ore if the deposit size cannot be increased. The third-largest producer is the Niobec deposit in Quebec, owned by IAMGOLD Corp. Niobec’s grade of Niobium is falling the deeper they are being forced to mine.

Niobium Prices Niobium prices are negotiated between buyers and sellers and does not have a spot price like most commodities. Prices have risen steadily since the year 2000 to $42 a kg in 2014. With only a few producers, the lack of new supply expected to come on stream anytime soon and increasing demand niobium prices are expected to remain high.

ALL THREE CURRENT PRODUCERS HAVE ANNOUNCED PRODUCTION INCREASES TO MEET ANTICIPATED DEMAND – We see this as a very strong vote of confidence that additional production is needed from new sources such as Elk Creek. Still this new supply will not keep up with demand. Demand will thus have to be met by one of the main development projects.

CBMM plans to increase capacity from 90,000 tpa to max capacity of 150,000 tpa by 2015, the 2 other producers Iamgold and Anglo combined have a maximum capacity of 20,000 tpa *(if their expansion plans go as scheduled)

CAGR (Compounded Annual Growth Rate) for next 5 years is expected to be 4% – 6%

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