Fostering international raw materials cooperation Analysis on Industry and Trade Operational report November 2016 Abstract This report contains the operational analysis on Industry and Trade of mineral raw materials in reference to five countries: Australia, Canada, Japan, South Africa and the USA. This is the outcome of INTRAW Work Package 1.4, mapping the context, the evolution and the performance of industry and trade in these reference countries. The aims of this report are to review the mining and raw materials competitive context and framework among the reference countries. Authors Nuno Bonito, Nelson Cristo, Marta Peres and Tânia Peças (Assimagra). Acknowledgements The authors thank and acknowledge the input provided by Christopher Keane, Denise Goldsworthy, Fatheela Brovko, Matt Wenham, Navin Singh, Oliver Bonham, Ray Durrheim and Scott Swinden and thank Dominic Banfield, Eberhard Falk, Gorazd Žibret, Malcolm Robb and Marko Komac for their help in reviewing this report. Disclaimer This report reflects only the authors’ view. The European Commission is not responsible for any use that may be made of the information it contains. This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement nº 642130. 2 INTRAW PROJECT Table of contents Page 1. EXECUTIVE SUMMARY 10 2. INTRODUCTION 12 2.1 Objectives and Structure 12 2.2 Scope and Method of Assessment 13 3. AUSTRALIA 16 3.1 The Industry in a Global Context 16 3.1.1. General Economy 16 3.1.2. Territorial Organization 16 3.1.3. Minerals Industry Contribution to Economy 16 3.1.4. Non-Energy Non-Agricultural Minerals 19 3.1.4.1. Major Metallic Minerals 19 3.1.4.2. Major Industrial Minerals 25 3.1.5. Recycling 26 3.2 Economic and Market Assessment 27 3.2.1. Reserves and Production 27 3.2.2. Internal Consumption 29 3.2.3. Trade (Export and Import) 31 3.2.4. Expenditure, Taxes/Royalties, Investment and Competitiveness 32 3.2.5. Industry Structure 35 3.3 Assessment of the Regulatory Framework 36 3.4 Raw Material Supply Assessment 37 3.5 Strategic Analysis 38 3.5.1. SWOT 38 3.5.2. Competitive Context 39 3.6 Conclusions 39 4. CANADA 42 4.1 THE INDUSTRY IN A GLOBAL CONTEXT 42 4.1.1. General Economy 42 4.1.2. Territorial Organization 42 4.1.3. Minerals Industry Contribution to Economy 43 4.1.4. Non Energy Mineral Industries 45 4.1.4.1. Major Metallic Minerals 45 4.1.4.2. Major Industrial Minerals 49 4.1.5. Recycling 50 4.2 Economic and Market Assessment 51 4.2.1. Reserves and Production 51 4.2.2. Internal Consumption 53 4.2.3. Trade (Export and Import) 53 4.2.4. Expenditure, Taxes/Royalties, Investment and Competitiveness 54 4.2.5. Industry Structure 56 4.3 Assessment of the Regulatory Framework 59 4.4 Raw Material Supply Assessment 61 4.1 Strategic Analysis 62 4.5.1. SWOT 62 4.5.2. Competitive Context 62 4.2 Conclusions 62 5. JAPAN 66 5.1 The Industry in a Global Context 66 5.1.1. General Economy 66 5.1.2. Territorial Organization 66 OPERATIONAL REPORT: RESEARCH AND INNOVATION 3 5.1.3. Minerals Industry Contribution to Economy 66 5.1.4. Non Energy Mineral Industries 68 5.1.4.1. Major Metallic Minerals 70 5.1.4.2. Major Industrial Minerals 72 5.1.5. Recycling 74 5.2 Economic and Market Assessment 75 5.2.1. Reserves and Production 75 5.2.2. Internal Consumption 77 5.2.3. Trade (Export and Import) 78 5.2.4. Expenditure, Taxes/Royalties, Investment and Competitiveness 80 5.2.5. Industry Structure 81 5.3 Assessment of the Regulatory Framework 82 5.4 Raw Material Supply Assessment 83 5.5 Strategic Analysis 84 5.5.1. SWOT 84 5.6 Conclusions 86 6. SOUTH AFRICA 88 6.1 The Industry in a Global Context 88 6.1.1. General Economy 88 6.1.2. Territorial Organization 88 6.1.3. Minerals Industry Contribution to Economy 88 6.1.4. Non Energy Mineral Industries 92 6.1.4.1. Major Metallic Minerals 92 6.1.4.2. Major Industrial Minerals 95 6.1.5. Recycling 96 6.2 Economic and Market Assessment 97 6.2.1. Reserves and Production 97 6.2.2. Internal Consumption 100 6.2.3. Trade (Export and Import) 100 6.2.4. Expenditure, Taxes/Royalties, Investment and Competitiveness 104 6.2.5. Industry Structure 106 6.3 Assessment of the Regulatory Framework 108 6.4 Raw Material Supply Assessment 109 6.5 Strategic Analysis 109 6.5.1. SWOT 109 6.5.2. Competitive Context 110 6.6 Conclusions 110 7. UNITED STATES OF AMERICA 114 7.1 THE INDUSTRY IN A GLOBAL CONTEXT 114 7.1.1. General Economy 114 7.1.2. Territorial Organization 115 7.1.3. Minerals Industry Contribution to Economy 116 7.1.4. Non Energy Mineral Industries 117 7.1.4.1. Major Metallic Minerals 117 7.1.4.2. Major Industrial Minerals 121 7.1.5. Recycling 122 7.2 Economic and Market Assessment 123 7.2.1. Reserves and Production 123 7.2.2. Internal Consumption 124 7.2.3. Trade (Export and Import) 124 7.2.4. Expenditure, Taxes/Royalties, Investment and Competitiveness 127 7.2.5. Industry Structure 130 7.3 Assessment of the Regulatory Framework 132 7.4 Raw Material Supply Assessment 133 7.5 Strategic Analysis 134 7.5.1. SWOT 134 7.5.2. Competitive Context 134 7.6. Conclusions 137 8. CONCLUSIONS 138 9. REFERENCES AND BIBLIOGRAPHY 142 10. ANNEX 150 4 INTRAW PROJECT 10.1. LIST OF ABBREVIATIONS 150 10.2. NON ENERGY METALS MAIN USE (GENERAL DESCRIPTION) 151 10.3 ALPHABETIC LIST OF US STATES AND TERRITORIES 152 List of figures Page Figure 3.1: Australia – States and Territories. 17 Figure 3.2: Employment in the Australian Mining Industry between 1969 and 2014 18 Figure 3.3: Contribution to total Employment from the Australian Mining Industry between 1969 and 2014. 18 Figure 3.4: Aluminium beverage can recycling % by country 27 Figure 3.5: Australia’s percentage of World Economic Demonstrated Resources (ABS, 2012). 28 Figure 3.6: Mine production of bauxite and processed products (alumina and aluminium) 29 Figure 3.7: Mine production of iron ore and processed products (raw steel) 29 Figure 3.8: Metal consumption in Australia (2006-2013) 30 Figure 3.9: Major markets for Australian exports. 31 Figure 3.10: Imports of major minerals, oil and gas 32 Figure 3.11: Countries of origin for Australian imports. 32 Figure 3.12: Metal flows in Australia (Golev and Corder, 2014). 32 Figure 3.13: Evolution of the expenditure on mineral exploration in Australia 33 Figure 4.1: Canada Political Divisions 43 Figure 4.2: Canada´s Real Gross Domestic Product contribution by Industry (CAD billion), 2008-2013. 44 Figure 4.3: Employment in the Canadian Mining and Mineral Manufacturing Industries, 2007-2013. 44 Figure 4.4: Key steps in the disposal process for surplus electronic and electrical equipment. 50 Figure 4.5: Major mineral reserves forecast for the Canada 52 Figure 4.6: Canada´s Exports 2014 (NRCAN, 2015d). ). Note: in 2014 1 CAD was around 0.91 USD. 54 Figure 4.7: Canadian mining clusters 57 Figure 4.8: Canada’s Mining Assets, 2011 (Marshal, 2013). 58 Figure 4.9: Canadian REE projects in an advanced exploration stage in 2013. 60 Figure 4.10: Canada’s competitive context. 63 Figure 5.1: Japan’s Territory. 67 Figure 5.2: Major industrial areas in Japan. 67 Figure 5.3: Evolution of the mineral rents in Japan (% of GDP) 69 Figure 5.4: Distribution of employment by industry in Japan in 2014. 69 Figure 5.5: Top 10 copper consumption countries in 2012 70 Figure 5.6: Rare Earths in Japanese Economy 73 Figure 5.7: Trade by commodity in Japan in 2014 78 Figure 5.8: Major iron and steel export destinations 79 Figure 5.9: Japan Foreign Trade by Country/Region 79 Figure 6.1: Territorial Organization of South Africa. 89 Figure 6.2: South Africa´s employment in the Mineral Industry (%) 2011, 2012, 2013. 91 Figure 6.3: Mineral Exports of South Africa in 2013. 92 Figure 6.4: Gold production and volumes sold, 2003-2012 (t). 97 OPERATIONAL REPORT: RESEARCH AND INNOVATION 5 Figure 6.5: Gold reserves, 2003-2012 (t). 98 Figure 6.6: PGM production and volumes sold, 2003–2012 (t). 97 Figure 6.7: PGM reserves, 2003–2012 (t). 97 Figure 6.8: 2013 Top 3 mineral exports 99 Figure 6.9: 2013 export percentage of gold sales. 99 Figure 6.10: 2013 Top 3 gold exports destinations 99 Figure 6.11: 2013 export percentage of platinum sales. 102 Figure 6.12: 2013 Top 3 platinum exports destinations. 102 Figure 6.13: 2013 export percentage of iron ore sales. 102 Figure 6.14: 2013 Top 3 iron ore exports destinations 103 Figure 6.15: Mining Industry, royalties paid - Billion Rand. 105 Figure 6.16: Mining industry contribution to other sectors 106 Figure 7.1: USA States and Territories 114 Figure 7.2: Mining contribution of top USA states to GDP 115 Figure 7.3: Major USA minerals´ mines. 115 Figure 7.4: Distribution of active exploration projects in the USA in 2014. 116 Figure 7.5: Main non-energy USA Mineral Exports in 2013. 117 Figure 7.6: e-Waste Generation and Recycling in USA 2000-2012.. 123 Figure 7.7: USA selected mineral exports 2010-2014 125 Figure 7.8: USA selected mineral imports 2010-2014 126 Figure 7.9: Trends in reported exploration budgets in selected regions.