Niobium and neighbours. Image by Ocelote at Shuttlestock
There has been a noticeable uptick in interest in niobium of late. In our view, this is worth pondering. Niobium is a rarely used metal, with annual consumption amounting to perhaps 75,000t, most of it in steelmaking. Its pricing is also remark-ably stable compared to practically any other metal one can think of. So why the sudden flurry of interest?
To start with, it’s worth visiting the existing industry structure. By far the leading actor in niobium is CBMM, operator of the Araxá mine in Brazil. Next is the Catalão mine, reasonably close to Araxá and currently owned by China Molybdenum (previously owned by Anglo American). Third place goes to the Niobec Mine in Québec, Canada, an asset of Magris Per-formance Minerals. And fourth is Mineração Taboca, part of the Peruvian Minsur group (although reportedly currently for sale according to sources in London), which recovers niobium as a by-product of tin mining in the Brazilian Amazon.
Besides these four mines, artisanal mining (mainly in Nigeria and Brazil) is an important although modest source of niobi-um. So, at first blush, one could understand the appeal of niobium purely from the perspective of market structure.
The demand side adds some spice. Today, the main application for niobium (as ferroniobium) is in steelmaking, where the addition of a fraction of a percent by weight of niobium can roughly double the strength of steel. Steel accounts for close to 90% of niobium demand but this market is mature.
However, numerous smaller markets, all faster growing, are widening the picture. Leading the way are superalloys – niobium is a key element in alloy 718, a child of the 1960s that still represents about half of the weight of many gas turbines, in the air and on the ground. Niobium-titanium is the superconductor of choice for medical imaging markets. Meanwhile ferroniobium is in demand for high efficiency magnets.
Niobium oxide is used as a feedstock for carbides and also for optical and radio-frequency markets, most commonly as lithium niobate. And niobium oxide is growing rapidly as a dopant in lithium-ion battery cathode compounds, where it provides greater conductivity (in lithium-iron-phosphate chemistries) and greater cathode stability and capacity retention (in nickel-manganese-cobalt chemistries).
And finally, there is the promise of battery anodes. Niobium can readily transition between various oxidation states, per-mitting niobium compounds to absorb and desorb lithium atoms depending on applied voltages. Several companies, notably Toshiba in Japan, Nyobolt and Echion in the UK, and Battery Streak in the United States, are actively developing and commercialising niobium for lithium-ion battery anodes. While niobium may be 1% of the cathode, it can be 50% or more of the anode, hence the potential demand in batteries could be as large as the existing niobium market. The potential in batteries explains the rush of interest in niobium but, as with everything in mining, the story told to investors is seldom the whole story. Let’s start with grade.
Araxá in Brazil has a grade of about 2.5% contained niobium oxide and is a huge deposit. Of the well characterised depos-its only Tomtor in Siberia (around 8% contained) and WA1 in Australia (about 2% contained) come close to Araxá. All the other candidate niobium projects fall well below this level, and in fact Catalão at about 1.2% contained Nb2O5 sits above the plethora of newcomers. Grade is essential (low grade mines will never be cheap) but it is not everything. Mineralisation also matters – Araxá, Catalão and Niobec can each re-cover a niobium concentrate to be thermited directly to ferroniobium, while Tomtor does not possess a distinct niobium mineralisation.
Then there is the rock itself. Both Catalão and Niobec are hard rock deposits, the latter underground, whereas Araxá is essentially beach sand with niobium nuggets. That being said, all three mines are built and operating profitably. New pro-jects will have to muscle their way into a space populated by a globally unrivalled niobium source (Araxá) and two other fully-paid-for producers. Not to mention Taboca where niobium is a by-product of tin mining.
This doesn’t mean that new projects cannot succeed. The market is growing, and none of the established miners (other than CBMM) produces niobium oxide, the form of niobium needed for batteries. Plus, CBMM is aggressive in promoting niobium consumption rather than seeking to control applica-tions for niobium. But emerging projects need to be evaluat-ed carefully. Cost is always paramount, and for many of the new niobium projects, by-product credits are also essential.
By-products are a great way to make a project work, until they are not. Promoters, customers and investors alike all need to think through the merits of specific projects. There is money to be made in niobium, but it must be made wisely.
By Andrew Matheson and Patrick Stratton
CPM Group is an independent commodities research, consulting, and investment banking advisory company headquartered in New York. The company is considered the foremost authority on markets for precious metals, along with manganese and molybdenum. Its entry into tantalum research came through a new collaboration with Andrew Matheson and Patrick Stratton, who are both recognised experts in the tantalum market.
Andrew Matheson, the founder and principal of OnG Commodities LLC, has 25 years of experience in the tantalum industry, leading Cabot Corporation’s tantalum ore procurement and mineral development activities, as general manager of Cabot’s sputtering target business and serving as director of R&D. His experience includes a range of other specialty materials including niobium, scandium and rare earth metals.
Patrick Stratton spent 16 years with Roskill, where he led the tantalum research. His experience also covers niobium, gallium, magnesium metal and titanium. In addition to being the lead author of published research reports on these commodities, he has also undertaken many consulting assignments for producers, project developers, financial institutions and government bodies.
