EDITORIAL & OPINION – COMMENTARY — Projects to boost niobium supply

Demand for niobium has increased over the past decade, rising from an average of just over 19,000 tonnes between 1990 and 1993 to a record level of 28,740 tonnes in 1997. Despite this sharp increase, prices have remained stable, owing to the efforts of three leading niobium producers to match output to demand. The producers are CBMM and Catalao of Brazil, and Niobec of Canada.

The strength of these three companies has largely obviated the need to develop new sources of niobium — despite strong growth in demand over the past two years. As a result, no significant new sources of niobium production have, as yet, appeared. This situation may change, however, as several attractive deposits are under investigation and feasibility studies are being under taken at other sites around the world. Paranapanema of Brazil plans to establish a plant capable of producing up to 4,000 tonnes of niobium products, including oxides and alloys, per year. Niocan, meanwhile, plans to produce up to 4,540 tonnes of ferro-niobium annually, and Reunion Mining of Britain has entered into an agreement with an Austrian and a Dutch firm to develop the Mabounie deposit in Gabon. Annual ferro-niobium capacity is anticipated at 6,000 tonnes.

Between 1996 and 1997, shipments of niobium oxide rose by 75% to 2,731 tonnes. The increase was due to increased demand for superalloys used in commercial aircraft, gas turbines and corrosion-resistant applications. However, the market for niobium superalloys is cyclical. The consequences for the aerospace industry of the financial crisis in Asia are difficult to assess. A downturn in superalloy consumption, and therefore in niobium demand, is unlikely to be seen for some time. Manufacturers have large order backlogs, and cancelled orders are being directed to other customers. Therefore, if the economic downturn spreads no farther than Asia, the Commonwealth of Independent States and Latin America, the effects on niobium demand will be small.

On the other hand, if growth slows in most industrial countries, it is likely that worldwide shipments will decrease. Demand for niobium, which is expected to have exceeded 29,000 tonnes in 1998, may decline as much as 10% by 2000. Longer-term prospects look good, and demand is expected to be strong after the turn of the century.

— The preceding is an excerpt from The Economics of Niobium, published by British-based Roskill Information Services.