Chinese corporations started buying up producers of niobium

The largest in mainland China molybdenum producer China Molybdenum Co. acquired the Brazilian unit of Anglo American Plc, which produces niobium and phosphates, reports Bloomberg. The deal cost the company $1.5 billion, 50% larger than analysts expected value.

Although the price of niobium has fallen in the last year because of reduced demand for steel, at least 15 companies competed with China Molybdenum for the right to buy these assets. In particular, a global leader in the manufacture of phosphate fertilizers the American Mosaic, an Australian producer of coal and steel South32 and the Swiss chemical company EuroChem Group AG.

Niobium — heavy refractory metal, built in 1801 and used in production since 1925. Having a high plasticity, corrosion resistance and good weldability, niobium is used in the production of more durable and lightweight steel for the manufacture of industrial pipes and aircraft parts.

About 85% of the world’s supply of niobium falls on the Brazilian company Cia. Brasileira de Metalurgia & Mineracao (CBMM). According to a report by the U.S. Geological survey (USGS), Brazil, as a leader in reserves of niobium, produced in 2015 year 50 thousand tons of metal.

According to estimates by Bloomberg, the global demand for niobium is from 90 thousand to 100 thousand tons per year (the demand for copper is 23.3 million tonnes per year). In the period from 2000 to 2010, demand for niobium has grown at an average rate of 10%, which was associated with the growth of steel demand in the BRICS countries. About 90% of the total consumed in the world of niobium ferroniobium accounted for, used mainly in the steel industry. The world’s largest consumers of ferroniobium are the USA, Japan and China.

Due to the fact that in General the cost of steel, the price of niobium is a small percentage, in the future its use will increase in all segments of final consumption. So, if in 2000 per 1 ton of steel was added 40 g of ferroniobium, by 2008 this figure rose to 63 g / tonne. Analysts Bloomberg noted that both the USA and Europe included niobium in the list of strategically important mineral.

Despite the fact that in Russia there are deposits of niobium (Lovozerskoe, Beloziminskoe, Katuginsky and Tomtor Deposit), the domestic market is experiencing an acute shortage of ferroniobium, which are compensated by imports from Brazil. The main producer of niobium products is Solikamsk magnesium plant. Russia’s share in world production of niobium is less than 1%.