The High North – Top Mining Region of the World

Voksenåsen, November 14-15 2012

Magnus Ericsson

Copper drawing: Kaianders Sempler.

Nordic

mining from

a world

perspective

Global metal mining

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Source: Raw Materials Data, 2012.

Global metal mining

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China

14.8 %

Source: Raw Materials Data, 2012.

Global mining - incl. coal

Source: Raw Materials Group, Stockholm 2010.

China

29 %

Source: Raw Materials Data, 2012.

Metals value 2011

Source: Raw Materials Group, Stockholm 2012.

Total value at mine stage for metals: 618 billion USD

Iron ore

Copper

Gold

Nickel

Zinc

PGMs

Silver

Potash

Phosphate

Diamonds

Others

REE

39 % 13 %

16 %

REE value 2011

Source: Raw Materials Group, Stockholm 2011.

Total value at mine stage for metals: 618 billion USD

Iron ore

Copper

Gold

Nickel

Zinc

PGMs

Silver

Potash

Phosphate

Diamonds

Others

REE

REE

0.15 %

Mineral criticality

Source: Eggert 2007.

Imp

act

of

su

pp

ly r

estr

icti

on

s

Supply risk

Reliability of Supply:

• Geological

• Technical

• Environmental &

Social

• Political

• Economical

Supply

restrictions:

• Price elasticity

• Substitution

• R&D

Iron ore Manganese

Lithium

Aluminium

Copper

PGMs

REE

Metal volumes

Source: Raw Materials Group, Stockholm 2012.

• Iron ore 2 000 000 000 ton

• Copper 15 000 000 ton

• REE 130 000 ton

• Gold 2 500 ton

• Platinum metals 200 ton

Copper price

Source: Raw Materials Data, Stockholm 2012

0

1000

2000

3000

4000

5000

6000

7000

8000

9000 1900

1903

1906

1909

1912

1915

1918

1921

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1966

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1972

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1981

1984

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1990

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1999

2002

2005

2008

US

D/t

(2005)

33 years

-3.5%pa

40 years

2.3%pa 29 years

-3.5%pa 10-15 years

2-3%pa ?

Copper price

• Society needs metals.

• Global industry.

• Iron ore, copper and gold dominates.

• Cyclical, long term business.

• Booming sector.

Mining facts

• Background facts.

• Three myths.

• Global trends.

• Nordic experiences.

• Future ?

Agenda

• Metals are depleting.

• Mining is not sustainable.

• China is conquering the world.

3 myths

Are metals

depleting?

Manganese drawing: Kaianders Sempler.

Resource base growth

Source: Crowson.

Metals are

not

depleting!

Manganese drawing: Kaianders Sempler.

Vanadium drawing: Kaianders Sempler.

Is mining

sustainable?

Garpenberg – operating since

the 13th century

Courtesy: Boliden.

Vanadium drawing: Kaianders Sempler.

Mining is for many

countries and regions

the only alternative for

economic development!

China

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• Largest explorer since 2010. Poor results.

• Foreign expansion slow, not continuous.

• Continued high demand for quality ore.

• Large miner – but

many small, high cost mines.

• Engine of demand –

reduced growth pace.

Trends

Tungsten drawing: Kaianders Sempler.

0

10

20

30

40

50

60

70

1850 1870 1890 1910 1930 1950 1970 1990

Europe

USA

China

USSR/CIS

Australia/Canada

6 resource rich dev.

countries

% of global mining

Global mining – 19th/20th century

Global mining - 1984

Source: Raw Materials Data, 2012.

Global mining - 2010

Source: Raw Materials Data, 2012.

Global trends

• Mines moving to developing countries.

• Minerals & mining in political focus.

• Policy processes running in many

countries.

• Resource nationalism.

• Boom decade ahead.

• Production costs increasing –

metal prices will remain high.

Nickel drawing: Kaianders Sempler.

Nordic

countries

• Largest mining region in the EU.

• Most dynamic exploration and

developments in the EU.

• Strong mining cluster.

• Politically high on agenda.

• Public in general supportive.

• > 250 Mt ore by 2020.

Nordic mining industry

Nordic exploration

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MSEK

0

500

1000

1500

2000

2500

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Norway

Greenland

Finland

Sweden

Nordic ore production 2010-20

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0

50

100

150

200

250

300

Sweden

Norway

Greenland

Finland

Mt

Nickel drawing: Kaianders Sempler.

Nordic countries

• New strategy in place.

• Intense public debate.

• State mining support.

Finland

Sweden

• Major producer.

• Policy process running.

• Weak leadership. Norway

• Lagging behind.

Future ?!

Thorium drawing: Kaianders Sempler.

Metal prices index 2012

Source: Raw Materials Group, Stockholm 2012.

Mining industry Capex

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Source: Raw Materials Group, Stockholm 2012.

billion USD

Nordic countries I • Large and vibrant mining industry.

• Equpment suppliers, service providers and

consultants are global leaders.

• Innovative R&D.

• Critical to the supply of minerals to Europe.

• Norwegian oil fund - best in the world?

• Solid reputation in Africa –

no colonial history.

• Nordic mine regions and African mineral

rich countries same relation centre/periphery!

Nordic countries II • Finland has taken the lead, but jointly

much stronger in Brussels.

• Nordic knowledge and experience is

asked for by African countries.

• Become more important for European

supply with minerals and metals. But.....

• Lack of coordination:

• In the international arena

• Between the countries

• Infrastructure projects

Nordic countries III • Industry already integrated.

• Common denominators for national policies.

• Coordination in international activities.

• European Bureau of Mines to

Finland/Sweden.

• Development thinking into mineral policy

and mining into development policy.

• Active participation in the realisation of the

Africa Mining Vision.

• Nordic experiences for Africa and the EU !

Conclusions

Drawings: Kaianders Sempler.

• Mining creates values & jobs.

• Regional economic motor.

• Global markets are favourable.

• No recycling without mining.

• Nordic knowledge/experiences in demand.

• Industry integrated in Nordic countries.

• Political coordination lacking.

• Time is ripe for action!

Copper drawing: Kaianders Sempler.

Raw Materials Group

Luleå University

of Technology

PO Box 3127

SE-169 03 Solna, Sweden

Tel: +46-8-744 00 65

E-mail: magnus.ericsson@rmg.se

www.rmg.se

Takk/Kiitos/Tack!

061030

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Sweden/Finland

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