SCUP Report

Table of Contents

Abstract

At present (2008–2009), the world is experiencing a deep global recession. This is affecting the mining industry since minerals and metals are used in primary manufacturing and construction. Already, mining companies are shutting down some operations and delaying expansions and new projects. We believe these economic conditions will continue until sometime in 2010 and then gradually improve. Thus, our five-year projected growth rates for mining chemicals are actually a composite of overall negative growth through 2010 and then a positive growth rate from 2011 to 2013. Mining countries and regions, of course, will be affected differently. The lowest-cost producers in Asia and South America will survive the economic downturn better than producers in North America and Western Europe. The same holds true for mining chemical producers.

This reports uses a functional classification system for the major chemicals used in mineral processing operations that includes flotation reagents (e.g., frothers and collectors), flocculants, solvent extractants and grinding aids. Detailed market estimates for these chemicals are provided on a country-by-country basis.

Brief descriptions of important suppliers in the international specialty mining chemical business are also provided in three major classification segments: global corporations with broad product lines, global companies specializing in a few mining chemicals, and regional companies.

The following pie chart shows world consumption of mining chemicals on a volume basis:

Regardless of when business conditions improve in the current economic slump, suppliers of specialty mining chemicals will have to adopt corporate strategies that are consistent with future, not historical, market conditions. Relevant success factors will depend not only on the timing and extent of an economic recovery, but also on the type of specialty mining chemical business involved. For global companies able to offer a broad product line, but subject to increasing global competition, success factors include the ability to (1) offer dependable technical service, (2) abandon unprofitable product lines on a timely basis, and (3) contemplate joint venture, licensing, or reselling arrangements with low-cost suppliers, especially in less developed countries. For companies specializing in a limited product line, success factors include the ability to customize products, emphasize performance rather than cost, and maintain unexcelled technical service. For regional suppliers, particularly in less developed countries, success factors include the ability to gain access to technology at reasonable cost, and exercise entrepreneurial skills with appropriate government support.