Real Assets

Measuring the Level of Competition for Valuable Minerals

Published

3 years ago

December 14, 2018

Nicholas LePan

Measuring Competition for Valuable Minerals

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Everybody loves a little competition.

It levels the playing field and ensures prices and products are kept affordable and available. But how do you measure and track the competitiveness of specific sectors?

The Herfindahl-Hirschman Index (HHI) is a commonly accepted measurement of market concentration, and in today’s case, we use it to show which mineral sectors have healthy competition between countries, as well as the sectors that are more monopolistic.

What is the Herfindahl-Hirschman Index?

The HHI is calculated by squaring the market share of each competitor and then summing up the resulting numbers. It can range from zero to 10,000.

The closer a market is to a monopoly, the higher the market’s concentration, and the lower its competition. If there were only one company in an industry, that company would have a 100% share of the market, and the HHI would equal 10,000, demonstrating a monopoly.

Conversely, if there were thousands of firms competing, the HHI would be near zero, indicating almost perfect competition.

HHI below 1,500: a competitive marketplace
HHI between 1,500 – 2,500: a moderately concentrated marketplace
HHI of 2,500 or greater: a highly concentrated marketplace

Interestingly, the same technique is also used by the U.S. Department of Justice to look at market competition and potential anti-trust violators, as well.

Global Metal Production

Today’s chart uses data from the World Mining Congress to look at the competition for global minerals between countries. The HHI scores show the minerals most and least exposed to competition, while uncovering opportunities for countries looking to bolster their own mineral production.

Here are 33 minerals ranked, going from highest score (most monopolistic) to lowest (least monopolistic):

Rank	Mineral	HHI Score	Type of Mineral
#1	Niobium (Nb2O5)	8,413	Iron and Ferro-Alloy Metals
#2	REE (Rare Earth Elements)	7,219	Non-Ferrous Metals
#3	Oil Sands	6,871	Mineral Fuels
#4	Tungsten (W)	6,828	Iron and Ferro-Alloy Metals
#5	Platinum (Pt)	5,383	Precious Metals
#6	Graphite	4,990	Industrial Minerals
#7	Asbestos	3,738	Industrial Minerals
#8	Vanadium (V)	3,573	Iron and Ferro-Alloy Metals
#9	Coking Coal	3,423	Mineral Fuels
#10	Cobalt (Co)	3,184	Iron and Ferro-Alloy Metals
#11	Palladium (Pd)	3,163	Precious Metals
#12	Aluminum (Al)	3,078	Non-Ferrous Metals
#13	Chromium (Cr2O3)	2,942	Iron and Ferro-Alloy Metals
#14	Molybdenum (Mo)	2,812	Iron and Ferro-Alloy Metals
#15	Boron (B)	2,749	Industrial Minerals
#16	Lithium (Li2O)	2,749	Non-Ferrous Metals
#17	Steam Coal	2,639	Mineral Fuels
#18	Lead (Pb)	2,505	Non-Ferrous Metals
#19	Uranium (U308)	2,233	Mineral Fuels
#20	Tin (Sn)	2,036	Non-Ferrous Metals
#21	Iron (Fe)	2,015	Iron and Ferro-Alloy Metals
#22	Diamond	1,904	Gemstones
#23	Zinc (Zn)	1,687	Non-Ferrous Metals
#24	Manganese (Mn)	1,627	Iron and Ferro-Alloy Metals
#25	Potash	1,565	Industrial Minerals
#26	Copper (Cu)	1,136	Non-Ferrous Metals
#27	Titanium (TIO2)	1,120	Iron and Ferro-Alloy Metals
#28	Silver (Ag)	1,015	Precious Metals
#29	Salt (NaCl)	982	Industrial Minerals
#30	Nickel (Ni)	949	Iron and Ferro-Alloy Metals
#31	Natural Gas	884	Mineral Fuels
#32	Petroleum	686	Mineral Fuels
#33	Gold (Au)	557	Precious Metals

The data here makes it clear that mineral production is not uniformly distributed throughout the world, giving some countries huge advantages while revealing potential supply problems down the road.

Renewables in the Spotlight

While commodities like gold and oil have robust levels of competition around the world, the renewable energy industry relies on more obscure raw materials to make solar, wind, and EVs work.

Rare earth elements (REE) rank #2 on the list with a HHI score of 7,219, while battery minerals such as graphite (#6), vanadium (#8), cobalt (#10), and lithium (#16) also appear high on the list as well.

According to a recent study, the production of rare earth elements is an area of particular concern. Used in everything from electric motors to wind turbines, rare earth demand will need to increase by twelve times by 2050 to reach emissions targets set by the Paris Agreement.

The only problem is that China currently controls 84% of global production, which increases the odds of bottlenecks and scarcity as demand rises. This ultimately creates an interesting scenario, where a sustainable future will be at the mercy of a few a producing nations.

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Real Assets

Visualizing the Genealogy of Exploration Success

Published

3 months ago

October 19, 2021

Visualizing the Genealogy of Exploration Success

In the last decade, 63% of all mineral discoveries in the Western world were made by junior explorers. These small companies are the vision of a dedicated few.

It is the people that make a great company, and it is great explorers that make great discoveries. This infographic sponsored by SKRR Exploration shows the incredible experience and knowledge of two leaders in mineral exploration brought together in one new venture.

Two Paths to Exploration Success

According to the common adage, overnight success stories take a long time. Ron Neolitzky and Ross McElroy have traveled two different paths but along their route, they have uncovered vast amounts of mineral wealth in Canada.

Ronald Netolitzky	Ross McElroy
1964-67: Graduated from the University of Alberta with a B.Sc and M.Sc. in Geology. 1985: Became President of Delaware Resources and acquired the Snip property. 1986: Struck a gold discovery at the Snip property, which produced 1Moz of gold over its lifetime. 1988: Invested in Consolidated Stikine Resources and drill-tested Eskay Creek, which would go on to produce 3.3Moz of gold and 160Moz of silver over its lifetime. 1990: Sold Eskay Creek stake to International Corona for $67/share as part of an acquisition. 1990: Received the Bill Dennis Prospector of the Year Award. 1993: Purchased 100% of the Brewery Creek property as president of Loki Gold. 1996: Transformed Brewery Creek into a heap-leach operation. 1996: Merged Loki Gold with Baja Gold and Viceroy Gold to create an entity with an annual production of 200Koz of gold. 1996: Received AME’s E.A. Scholz Award for discovery and development achievements. 2003: Acquired the Galore Creek property for Spectrum Gold, later merged with NovaGold Resources and partially sold to Teck Resources for $275M. 2007: Oversaw Yamana Gold’s $577 million acquisition of Viceroy Resources as chairman. 2010: Oversaw Osisko Mining’s $372 million acquisition of Brett Resources as chairman. 2015: Inducted into the Canadian Mining Hall of Fame.	1987: Graduated from the University of Alberta with B.Sc. in Geology. 1987: Joined uranium giant Cameco and worked on the McArthur River discovery in Saksatchewan’s Athabasca Basin, which is now the world’s largest uranium mine. 1989: Worked with French nuclear Company Cogema (now Orano) on the Shea Creek uranium discovery in Saskatchewan, Canada. 1990-99: Managed the Hope Bay Gold Project with BHP Minerals, discovering three high-grade gold deposits. 2007: Joined Fission Energy as VP of Exploration before rising to the rank of COO. 2009: Led the technical team that discovered the high-grade J Zone uranium deposit at Waterbury Lake and sold to Denison Mines. 2012: Used airborne radiometrics and radon in-lake survey technology to discover the Triple R uranium deposit on the Patterson Lake Property, with an indicated resource of 102M lbs of U3O8. 2013: Received the Mining Person of the Year Award from the Northern Miner. 2014: Received the Bill Dennis Award for a Canadian discovery.

Ronald Netolitzky

Ross McElroy

1964-67: Graduated from the University of Alberta with a B.Sc and M.Sc. in Geology.
1985: Became President of Delaware Resources and acquired the Snip property.
1986: Struck a gold discovery at the Snip property, which produced 1Moz of gold over its lifetime.
1988: Invested in Consolidated Stikine Resources and drill-tested Eskay Creek, which would go on to produce 3.3Moz of gold and 160Moz of silver over its lifetime.
1990: Sold Eskay Creek stake to International Corona for $67/share as part of an acquisition.
1990: Received the Bill Dennis Prospector of the Year Award.
1993: Purchased 100% of the Brewery Creek property as president of Loki Gold.
1996: Transformed Brewery Creek into a heap-leach operation.
1996: Merged Loki Gold with Baja Gold and Viceroy Gold to create an entity with an annual production of 200Koz of gold.
1996: Received AME’s E.A. Scholz Award for discovery and development achievements.
2003: Acquired the Galore Creek property for Spectrum Gold, later merged with NovaGold Resources and partially sold to Teck Resources for $275M.
2007: Oversaw Yamana Gold’s $577 million acquisition of Viceroy Resources as chairman.
2010: Oversaw Osisko Mining’s $372 million acquisition of Brett Resources as chairman.
2015: Inducted into the Canadian Mining Hall of Fame.

1987: Graduated from the University of Alberta with B.Sc. in Geology.
1987: Joined uranium giant Cameco and worked on the McArthur River discovery in Saksatchewan’s Athabasca Basin, which is now the world’s largest uranium mine.
1989: Worked with French nuclear Company Cogema (now Orano) on the Shea Creek uranium discovery in Saskatchewan, Canada.
1990-99: Managed the Hope Bay Gold Project with BHP Minerals, discovering three high-grade gold deposits.
2007: Joined Fission Energy as VP of Exploration before rising to the rank of COO.
2009: Led the technical team that discovered the high-grade J Zone uranium deposit at Waterbury Lake and sold to Denison Mines.
2012: Used airborne radiometrics and radon in-lake survey technology to discover the Triple R uranium deposit on the Patterson Lake Property, with an indicated resource of 102M lbs of U3O8.
2013: Received the Mining Person of the Year Award from the Northern Miner.
2014: Received the Bill Dennis Award for a Canadian discovery.

This combined experience is coming to bear in one company to uncover Canada’s next mineral frontier.

Bringing Experience Together: SKRR Exploration

SKRR brings together the experience of two great explorers to uncover the next mineral frontier, Saskatchewan. This junior explorer is working on the next great discovery with 6 projects in the Trans-Hudson geological corridor

Father Lake Nickel Project: Copper, Nickel
Ithingo Project: Gold
Irving Project: Gold
Cathro Project: Gold
Leland Project: Gold
Olson Project: Gold
Manson Bay: Gold

With a proven location and legacy of exploration success, SKRR is ready to unlock the next mineral frontier in Saskatchewan and continue the tradition of a dedicated few uncovering the next great discovery.

Real Assets

The World’s Top 10 Gold Mining Companies

Together, the world’s top 10 gold mining companies account for roughly 22% of the share of the total gold market.

Published

3 months ago

October 19, 2021

Bruno Venditti

The World’s Top 10 Gold Mining Companies

Unlike paper currency or many other types of assets, gold has maintained its value throughout the ages.

First used by cultures in modern-day Eastern Europe in 4,000 BC to make decorative objects, the metal today represents a global business with operations on every continent, except Antarctica.

The industry is dominated by a select group of majors.

Together, the world’s top 10 gold miners produced 27.48 million ounces (Moz) in 2020, worth approximately $48 billion, according to data from Mining Intelligence.

North America Leading

At a country level, China is the largest producer in the world accounting for around 11% of total global production.

However, no Chinese company appears among the top miners.

Rank	Company	Headquarters	Country	2020 Production (Moz)
1	Newmont	Denver	USA 🇺🇸	5.88
2	Barrick Gold	Toronto	Canada 🇨🇦	4.84
3	Polyus	Moscow	Russia 🇷🇺	2.87
4	AngloGold Ashanti	Johannesburg	South Africa 🇿🇦	2.81
5	Kinross Gold	Toronto	Canada 🇨🇦	2.38
6	Gold Fields	Johannesburg	South Africa 🇿🇦	2.13
7	Newcrest Mining	Melbourne	Australia 🇦🇺	2.06
8	Agnico Eagle	Toronto	Canada 🇨🇦	1.73
9	Polymetal International	St. Petersburg	Russia 🇷🇺	1.40
10	Harmony Gold	Johannesburg	South Africa 🇿🇦	1.38

At the top of the gold mining companies list, Colorado-based Newmont has ownership of mines in Nevada, Colorado, Ontario, Quebec, Mexico, the Dominican Republic, Australia, Ghana, Argentina, Peru, and Suriname.

As the only American company on the list, Newmont produces 21% of the yellow metal poured by the top companies.

Canada, which is known for its mining industry, has three companies on the list; Barrick Gold, Kinross Gold, and Agnico Eagle, producing 32% combined.

Russia, which is expected to become the world’s top producer by 2029, has two companies ranked. Together, Polyus and Polymetal represent 15% of the top miners’ production.

The top 10 players account for ~22% of the total market share, which is anticipated to grow due to increased merger and acquisition activities.

Wealth and Luxury

Over six and a half thousand years after its discovery, more than 90% of the gold mined annually is destined for jewelry, bullion, and coins.

Jewelry: 36.83%,
Investment: 46.64%,
Central banks: 8.58%,
Technology: 7.95%

The metal is also used in dentistry, as it is the best material for fillings and crowns since it is easy to insert, and is non-reactive with the human body.

Golden Future

Global production fell by 1% in 2020, the first decline in a decade, according to the World Gold Council.

Some analysts argue the world has reached “peak gold” – which means that the maximum rate of extraction has passed and the production of the metal will continue to fall until, eventually, mining for it shall cease entirely.

Demand, however, shows no sign of slowing down as the golden metal remains firmly synonymous with security, stability, and longevity.