By: Erik Ronald, PG
Mining Geology HQ
28 May 2016
Niobium isn’t something that comes up in conversation very often, even in the mining industry. Recently, AngloAmerican sold their Niobium and Phosphate business to China Molybdenum Co. Ltd. (CMOC) for a 50% premium from analyst estimates (WSJ, 28 April 2016). Whenever major producers need to offload “non core assets”, opportunities are created. Reports indicate the list of bidders numbered 15 companies including Vale SA, X2 Resources, and Apollo Global Management LLC. Given a list of potential suitors like this, the rest of the mining world started asking, “so what is niobium and should we have some in our portfolio”?
This article provides a brief and high-level geological and market overview of niobium (Nb). Time will tell if it becomes the next “sweetheart commodity” like we’ve seen with lithium and Rare Earth Elements (REE) over the past few years though I highly doubt it. I’m sure that won’t restrain junior explorers from coming out of the shadows with dramatic statements like “strategic mineral” or “required to reduce sovereign risk”. That philosophy seemed to work well in raising capital a few years ago during the REE rush.
Brazilian and Chinese companies control niobium supply, with Brazil supplying the product and China supplying the cash. Like most commodities, China has its fingers well into the pie of the world supply of niobium through a 30% interest in the top producer, a stake in the third largest producer gained in 2015, and now the acquisition by CMOC of the world’s second largest producer.
What is Niobium
Niobium is an element with atomic number 41 and symbol Nb. It is a soft, grey transition metal similar to tantalum and is a lithophile element–meaning it commonly occurs as an oxide though a few sulfides and one borate mineral are known. The common ore minerals include: 1) pyroclore (Na,Ca)2Nb2O6(OH,F) which is the most economically significant Nb mineral, and 2) the solid solution series of columbite-tantalite (Fe, Mn)(Nb,Ta)2O (aka “Coltan”). Geochemists are probably more familiar with Nb as a trace element in biotite, rutile, sphene, cassiterite and zircon. Some key properties include a high density of 8.57 g/cm3 and a high melting point at 2,469 degrees C.
As a side note, niobium was referred to as columbium in U.S. literature from its discovery in 1801 until about 1950, when the world’s chemists agreed upon “niobium”. The USGS and some metallurgists still reference the historic name as any material published prior to the early 50’s will use the term “columbium”. Keep this in mind should you ever need to Google search “what the heck is niobium”.
Figure 1: Pyroclore ore from the Niobec Mine, Quebec (image courtesy of IAMGOLD 2011).
Where to Find Niobium
The entire world’s supply of mined Nb comes from three operating mines: two in Brazil and one in Canada. Historically, there has also been Nb production from Australia, DRC, Mozambique, Nigeria, Rwanda, and the USA. All three currently producing mines are carbonatite-related deposits. A list of the top 20 carbonatite-hosted Nb deposits by grade is presented in Table 1.
Table 1: Top 20 global carbonatite deposits by Nb grade. Grades reflect original deposit averages prior to mining and not published Ore Reserves. (data from USGS Nb-REE carbonatite deposits of the world).
The largest and highest-grade operation, Araxá in Minas Gerais, Brazil, dominates the market with ~85% of global production. It is majority owned by Companhia Brasileira de Metalurgia e Mineração or for anglophones like me, CBMM. There are approximately 460 Mt at 2.5% Nb2O at this open pit operation (Figure 2) giving it a planned mine life of over a hundred years at current production rates. For an entertaining read on the history of CBMM, I recommend an article in Bloomberg about Brazil’s richest family (Bloomberg.com, 2013) and the history of CBMM.
Figure 2: Photo of the Araxá Mine in Minas Gerais, Brazil (image courtesy of CBMM).
The second largest producer is the Catalão deposit, located in Goiás state, Brazil. It hosts fewer Reserves and lower grades than Araxa and is composed of two pipes: the Mine II and East Area deposits (Figure 3). The Catalão deposits were acquired by CMOC as part of AngloAmerican’s niobium and phosphate business in April 2016 for US$1.5 billion. Some have speculated that Catalão will run out of ore unless a major mine expansion is undertaken. As of 2011, there were roughly 29 Mt at 1.22% Nb2O. I’m guessing there are sufficient Ore Reserves or reasonable prospectivity at Catalão given the price CMOC recently paid, though CMOC has a history of overpaying for acquisitions.
Figure 3: Ore shells and drilling at the Catalão deposit showing open pit with Mine II and East Area deposits, Goiás state, Brazil. (Cordeiro, et al., 2011)
The third producer is the Niobec Mine at Saint Honoré, Quebec, Canada. Niobec was purchased by a partnership of Magris Resources, Hong Kong based CEF Holdings, and Singapore based Temasek from IAMGOLD in 2015 for US$530M. Niobec has the lowest grade of the three producers at 0.42% Nb2O5 as it doesn’t have the luxury of an enriched lateritic zone due to Quebec’s somewhat less-than tropical climate. The grades decrease at depth (Figure 4) and if I had to speculate on the strip ratio required to access the deeper, lower grades, Niobec will likely become uneconomic in the near future or go underground.
Figure 4: Cross section through the Niobec mine showing Nb2O5 grade distribution (National Instrument 43-101 technical report, 2011 via www.sec.gov)
There are a multitude of deposits globally with historic production or companies trying to bring them into production. The more interesting ones include the high-grade high-tonnage Seis Lagos in Amazonas State, Brazil; Tomtor in northern Siberia, Russia; Mt. Weld in Western Australia; Lueshe and Bingo in the DRC; Mabournie in Gabon; Dubbo Zirconia Project in NSW Australia; Panda Hill deposit in Tanzania; and NioCorp’s Elk Creek project in Nebraska, USA.
How to find Niobium
If you’re ambitious and want to explore for the next world class Nb deposit, here are some items to consider:
- The best deposits (high-grade, high-tonnage) are hosted in carbonatite with lateritic weathering caps that have greatly enriched Nb concentrations.
- Associated minerals: tantalum, thorium, titanium, uranium, and REE.
- Look for carbonatites (typically circular features using aerial/satellite imagery) along rift-zones or linear belts. The USGS has a Google Earth file of most known carbonatites and supporting technical reports available for free.
- Look in tropical climates or paleo-tropical climates to form a weathered lateritic zone.
- Carbonatite intrusions of ~100 Ma (70-130 Ma) appear to be good hosts of Niobium > Tantalum.
- Under-explored areas – central Africa still holds high potential, India, northern South America, Siberia, and any failed rift zones such as East Africa.
- Non-carbonatite deposits should be hunted in alkali rocks with high fluorine levels that have undergone pervasive alteration.
- To gauge anomalism, crustal background levels are ~20 ppm.
Other common occurrences, which may result in economic deposits, are in zoned pegmatite dykes associated with alkalic rocks such as nepheline syenites or in ultramafic complexes. Lower on the likelihood of an economic deposit style include greisen deposits (endoskarn) rich in Be and beach placer/sand concentrations such as in West Africa.
Global Niobium Market
The boutique niobium market is essentially based on two drivers: high-end steel and the aerospace industry. Future demand is likely to increase, as more high-strength, low-alloy (HSLA) steel will be required over time for use in pipelines and the automotive industry. Some industry analysts predict 7% annual growth in the Nb market over the coming years.
It can be classified as an industrial mineral with the common saleable product being ferroniobium alloy. The market for niobium is relatively small compared to other metal commodities with annual demand around 180 kt of ferroniobium per year. The primary purchasers include high-end steel manufacturers in Japan, Germany, U.S., and China. The average price at the time of this article is US$31,854 per metric tonne of ferroniobium (66% Nb) or for my American kin, 14 bucks a pound for the good stuff. To prove how a little niobium goes a long way, 200g of niobium added to a tonne of steel will increase the strength by 30%. Strengthening steels accounts for about 90% of mined niobium followed by use in “superalloys” for aerospace engines and in various superconducting materials including the magnets in MRI scanners.
Recently, the U.S. listed niobium as a “strategic mineral” due to its importance in HSLA steel and superalloys and the fact there is no U.S.-based production of the element. There are at least two near-economic deposits in the U.S. but as with most strategic minerals, if the price is high enough or the government subsidizes extraction, a deposit will go into production. Until that time, there’s no need to produce, no matter how “strategic” the mineral may be considered.
The niobium market is only a few decades old. Countries with greater Nb usage include those with a long history of steel production and those that produce specialized high strength steel (Figure 5). As countries like China, India and Russia increase their production and use of high-strength steel, there will be a correlated increase in the demand for Nb.
Figure 5: Use of Nb in grams per tonne based on steel production by country. (Roskill, 2016)
The niobium market is relatively small, there is a near-monopoly from high-grade producers in Brazil, and demand is closely tied to global high-strength steel production. This results in niobium production being a challenging business to enter let alone succeed as long as CBMM continues to dominate. If market conditions change such as significantly increased high-end steel production from China, production disruption at Araxá, or increased market demand for Nb, the door may open for a new deposit to come online without drastically lowering market pricing. Personally, I think the greatest opportunity in the niobium market would be for an existing profitable operation that can produce a by-product stream of Nb at minimal incremental cost. This has a strong chance of cracking into the market even if that annual production is relatively small. The most likely candidates are some tin, tantalum, and REE deposits. Alkane Resource’s Dubbo Zirconia project located in NSW, Australia is one to keep an eye on with 36 Mt Resource at 0.46% Nb2O5 as it also hosts significant zirconium, yttrium and REE concentrations which result in positive project economics.
Here are a few potential disrupting developments that could shake the niobium market including:
- By-product in bauxites, REE, or other deposits that could produce Nb at near zero cost of production.
- Production stoppage at Araxá due to unplanned reasons (environmental, labor dispute, etc).
- Market flooding of supply from a new producer likely in DRC.
- Production from the Tomtor massif in Siberia. Not only is this area rich in REE (up to 30% in upper ore horizon!) but it includes a weathered carbonatite which may be the world’s largest carbonatite-related concentration of Nb (and REE), exceeding the Araxá deposit.
- Mining of sea-floor manganese nodules rich in Nb.
- Major increases in demand by major pipeline projects, global demand of high strength steel.
- New technology such as the commercialization of the niobium oxide-based supercapacitors.
- New technologies in recycling of scrap stainless steel or superalloys.
I hope you’ve enjoyed this “in a nutshell” summary of the niobium market and global deposits. Let me know if you are interest in similar summaries for other obscure minerals. Lastly, if you’re still really interested in niobium, you can always purchase a few kilograms directly on alibaba.com. Oh the wonders of the Internet!
The author would like to thank John Papp of the U.S. Geological Survey for reviewing this article. I hope you’ve found this useful, interesting, or at least entertaining.