12 °c
London
Wednesday, February 8, 2023
No Result
View All Result
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
No Result
View All Result
FurtherAfrica
No Result
View All Result
Home Africa

The commodity that no one knows about but everybody wants to buy

FurtherAfrica by FurtherAfrica
May 18, 2016
in Africa, Mining, Natural Resources, SADC
Reading Time: 3 mins read
1k 42
0
Share via QRWhatsappShare on FacebookShare on TwitterLinkedInPinteresteMail

The world’s mines and steel plants got so devalued during the commodity slump that some were just given away by owners struggling to cut losses or debt. But there’s at least one metal that’s been attracting a lot of attention.

Niobium—named for a Greek goddess who became a symbol of the tragic mourning mother—is used to produce stronger, lighter steel for industrial pipes and aircraft parts. It is mined in only three places on Earth, and the price of every kilogram is seven times higher than copper.

China Molybdenum Co. outmanoeuvered at least 15 companies last month to purchase Anglo American Plc’s niobium and phosphate unit in Brazil, agreeing to pay $1.5 billion, or 50% more than analysts expected. The buying frenzy that included Vale SA, Apollo Global Management LLC and X2 Resources showcased the growing appeal of a market that may be worth $4 billion for a soft, silvery metal many experts don’t know much about.

“I didn’t know what niobium was, and I had been in the minerals industry for 20 years before this opportunity came across my desk,” said Craig Burton, the chairman of Cradle Resources Ltd, which is seeking to develop the $200 million Panda Hill niobium project in Tanzania. “I had to actually open up the periodic table just to double-check that it was an element. It definitely is a boutique space.”

niobium

Specialist market

Niobium is hard to find and hard to value. More than 80% of global supply comes from one company—Cia. Brasileira de Metalurgia and Mineracao in Brazil. Metal Bulletin Ltd, which publishes prices for metals as obscure as bismuth and germanium, says there’s not enough liquidity to report one for niobium.

The metal averaged about $40 a kilogram last year, according to Cradle Resources, which is based in Perth, Australia. An equivalent amount of copper on the London Metal Exchange fetched about $5.49. Global demand for niobium is about 90,000 to 100,000 metric tonnes annually.

Still, prices fell last year because of the weak demand for steel, as slumping oil and gas markets led to fewer metal pipe purchases, according to Anglo American, which wants to raise cash to cut debt after a collapse in commodity prices. Almost all the metal comes from just three mines in Brazil and Canada, allowing dominant producer CBMM to match supply to demand and influence prices.

Wide interest

Among the companies outbid by China Molybdenum were Mosaic Co., the world’s largest producer of phosphate fertilizer, South32 Ltd. and Eurochem Group AG, people familiar with the process said. The sale was highly competitive, said two people involved, who asked not to be identified because the matter was private. The winning offer exceeded the estimates of analysts at Bank of America Corp. and Investec Plc. RBC Capital Markets said the assets were among the best that London-based Anglo has offered.

What makes the business so attractive is that there are only a few operating mines. Anglo and Niobec account for about 9% of production, and Brazil’s CBMM supplies the rest, according to Argonaut Securities Pty. Both the US and Europe list niobium as a strategically important mineral.

“Niobium is a very unique business,” said Kalidas Madhavpeddi, who heads the CMOC International unit of Luoyang, China-based China Molybdenum. “We typically want to buy from people who regret selling it. We’ve been very carefully assembling a war chest in anticipation of a downturn in the industry.”

Market dominance

CBMM, controlled by the billionaire Moreira Salles family, has mostly dominated supply since starting operations five decades ago. It sold a 30% stake to a group of Asian steelmakers in two transactions valued at $3.9 billion in 2011.

In another deal, Magris Resources Inc., founded by former Barrick Gold Corp. chief executive officer Aaron Regent, agreed to pay $530 million for the Niobec mine in Canada in 2014.

Unsuccessful bidders in Anglo’s sale may turn their interest to Cradle’s Panda Hill project in Tanzania, Argonaut said in a research report. Pending financing, it’s expected to start producing in mid-2018.

The sales “have brought a lot of participants in,” Cradle’s Burton said. “There was only one winner. That leaves lots of parties that might be interested in talking to us because we do need to raise some capital to bring this project on.” Bloomberg

Source: Live Mint

Related

Tags: commodityMiningniobium
ScanSendShare422Tweet264Share74Pin95Send
FurtherAfrica

FurtherAfrica

Founded in 2015 FurtherAfrica is an online platform centralising news and content focusing on the development and growth story of the African continent.

Related Posts

Aviation

Ethiopian opens new aviation training center

by FurtherAfrica
February 8, 2023
Development

Mozambique to invest in electric bus assembly line

by Club of Mozambique
February 8, 2023
Agriculture

IFAD partners with private sector to unleash financial inclusion in rural areas

by Farmers Review Africa
February 8, 2023
Logistics

Angola and Abu Dhabi partner on maritime connectivity

by Energy Capital & Power
February 8, 2023
Banks using US$ should think about their Crypto exposure – FinCEN Director
Fintech

by Web3Africa
February 8, 2023
Platform Africa 2023
 
Mozambique eVisa
 
MozParks
 

Translate this page

Read the Latest

Aviation

Ethiopian opens new aviation training center

by FurtherAfrica
February 8, 2023
0

Ethiopian Airlines Group, the largest aviation group in Africa, inaugurates a new aviation training center in the city of Hawassa,...

Read more

Mozambique to invest in electric bus assembly line

February 8, 2023

IFAD partners with private sector to unleash financial inclusion in rural areas

February 8, 2023

Angola and Abu Dhabi partner on maritime connectivity

February 8, 2023
Banks using US$ should think about their Crypto exposure – FinCEN Director

February 8, 2023

FurtherAfrica Partners Network

The Exchange Club of Mozambique Taarifa Rwanda
TechGist Africa Africa Oil & Power Farmers Review Africa
Tanzania Invest Zambia Invest See Africa Today
Africa Global Funds Novafrica CrudeMix Africa
Harambee Africa Botswana unplugged Financial Insights Zambia
O Económico Digilogic Africa Web3Africa

Subscribe to FurtherAfrica

Enter your email address to receive new articles on your email.

Join 100,723 other subscribers.
FurtherAfrica

© 2021 FurtherMarkets

FurtherAfrica is a FurtherMarkets Limited platform

  • Countries
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

Follow Us

No Result
View All Result
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

© 2021 FurtherMarkets

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?
 

Loading Comments...