Mature markets hurt selenium growth

The established end-use markets for selenium are mature and no new major applications are foreseeable, according to research company Roskill of London. However, the firm expects demand growth to continue at its present rate of a few percent per year. Selenium output is closely linked to the level of copper production since it is recovered as a minor byproduct from the electrolytic refining of copper. this link has led to great price volatility in the past.

In addition, a shift in western world copper exploitation in favor of the large porphyry copper deposits, which contain lower selenium levels than polymetallic deposits, has reduced the availability of byproduct selenium.

The increasing trend toward the refining of copper by electrowinning, which precludes selenium recovery, has resulted in further decreases in the availability of selenium.

Roskill points out that despite slower growth in fundamental availability, selenium recovery at refineries could be made much more efficient if economic incentives were offered.

The company believes that the most important recent development in world consumption is the growth in demand from China during the last decade. Imports to China rose from about 25 tonnes in 1984 to more than 200 tonnes in 1988: the result of growing demand from their container glass and metallurgical industries.

This increase is of particular importance, says Roskill, because it offsets to some extent the decline in developed countries of the use of selenium as a decolorizer in flint packaging glass, caused by increased glass recycling and substitution by other packaging materials.

In its latest report on selenium, Roskill analyses the end-use markets and finds that just three accounted for almost three2Dquarters of world selenium consumption in 1989: photoreceptors, glass and pigments.

Photoreceptors, used in the manufacture of plain paper photocopiers and laser printers, accounted for around one-third of world consumption in 1989, making them the largest end-use market.

The main threat to demand for selenium in this use is substitution by organic materials and by amorphous silicon. However, Roskill believes that their inferior durability and higher-cost respectively will ensure continued strong demand for selenium for the foreseeable future.

Environmental concerns are affecting the selenium industry among many others; increased glass recycling and substitution by other packaging materials will lead to decline in the use of selenium as a decolorizer in St. Genevieve debentures, convertible at $2.27, would increase the number of shares issued by 6.9 million.

The company’s best known asset is a 50% interest in Louvem, which is developing the Louvicourt Twp. base metal project in a 55-45% joint venture with Toronto-based Aur Resources (TSE).

With surface exploration still in progress, minable reserves are estimated by the brokerage firm Loewen, Ondaatje, McCutcheon & Co. of Toronto to be 20 million tons grading 5.2% copper, 2.3% zinc, 1 oz. silver and 0.04 oz. gold per ton.

As Noranda currently holds 4.1 million of Louvem’s 18.1 million issued shares and has an option to buy one million more (from March 15 to April 15) at market price plus 14.9%, the metals giant has emerged as a likely target for Merrill Lynch. Aur isn’t ruling itself out of the bidding although secretary Peter McCarter hasn’t yet been approached regarding the sale.

St. Genevieve sold its 50% stake in the Chimo gold mine to Cambior (TSE) last May and has no production revenue at present. The company is still involved in exploration in the Val d’Or region through a joint venture with Wrightbar Mines (ME).

St. Genevieve spokesman Pierre La Flamme says the company is bullish on the prospects for a grassroots project at Bellechasse Que., where Golden Hope Mines (COATS), St. Genevieve and St. Genevieve affiliate Exploration Duverny (ME) continue to uncover high-grade gold veins. St. Genevieve can earn a 50% stake in the property.

With consolidated debt standing at $57 million, management values St. Genevieve at around $180 million.