www.irannovation.com rubin pajoohan fartak co. international engeenering
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Rubin Pajoohan Fartak co. International Engeenering
What are minerals?Why is mining important?Geography of miningDemand for mineralsReserves and resources
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Metals are chemical elements that conduct electricity .
In nature, they occur in the form of minerals, which are chemical compounds
containing metals and with specific chemical and physical characteristics .
Minerals occurring in sufficient quantity and grade to be economically exploitable
are called ores .
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Aluminium: Transport, packaging, construction, high tension power
lines Copper:Electrical conductors, construction,
transportGold:Investment, jewellery, electronicsLead:Batteries, pigments, ammunition,
radiation shieldingNickel:Stainless steels, electroplatingPlatinum:Jewellery, catalystsSilver: Electronics, sterlingwareTin: Tinplate in packaging, solder,
pigmentsZinc: Galvanizing, brass and bronze
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Metal Share in total value of metallic mineral
production % (estimates)
Volume of output (metal content in
kilotonnes)
Iron ore 21.9 800 000Copper 18.0 16 900
Gold 13.5 3Nickel 4.9 1 300
Zinc 3.4 10 300Bauxite 1.5 31 000Others 36.8 ..
All metals 100.0 ..
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Around twenty developing countries depend on mining for more than half their export income –
and the number is increasing Ease of entry into mining
No need to mobilize domestic capitalEasy access to technologyNo need for government financed infrastructureEasy market accessTransparent and simple standardsMinimal need for marketing
Scale of revenues The world’s largest mines generated annual sales of
more than US$ 12 billion, annual profits of more than US$ 8 billion in 2006-2007
Governments can easily appropriate rents
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27%
6%2%
51%
14% Metals
Industrial minerals
Diamonds
Coal & uranium
Crushed rock
YEAR 2005 TOTAL ~ 910 billion USD
Source: Raw Materials Group, Stockholm 2006.
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18%
29%
23%
11%6%
4%2%7%
Gold
Iron ore
Copper
Nickel
Zinc/lead
PGMs
Bauxite
Other
YEAR 2005 TOTAL ~ 250 billion USD
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GLOBAL MINING – GEOGRAPHY 1990
1. China 10.1%
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0
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1990 1995 2000 2003 2004 2005 2006
Largest 3 largest 10 largest
% of total value of non-fuel mineral productionat the mine stage
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Asian minerals and metals demand has grown very rapidly and Asian countries have accounted for almost all of the increase in demand over the
past five yearsChina is now the world’s largest steel producer,
steel consumer, steel exporter and iron ore importer, the world’s third largest iron ore
producer and the third largest steel importerMetals use per capita is still very low in
countries such as China and India, but they are still at a stage where metals consumption
relative to GDP is rising and large populations make them more than significant forces on the
market
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Demand will continue to be strongly linked to Asian growth and high rates of
increase are expected Once the recovery from the recession is
completed, capacity is expected to just keep up with growth in demand in the
long term (next 8-10 years)A large share of output growth will take
place in developing countries (Africa and Latin America), where there is now strong
investor and exploration interest
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Metal Share of value added% ,Gold 100Platinum Group Metals 100Tin 83Copper 77Lead 77Nickel 70Zinc 63Cobalt 33Bauxite/aluminium 9
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Reserves Resource baseAluminium 81 1065
Copper 22 736Iron 65 886
Lead 17 607Nickel 30 526Silver 15 731
Tin 28 759Zinc 20 778
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ASSUMPTIONSMetals use has
increased by 5 % annually in the past
and continues to do so until year 5 ;
from year 6 to year 15, metals use grows at an
annual rate of 20 ;% from year 16 to year 24
it grows at 10 ;% from year 25 to 35 it is
constant ;from year 36 onwards it
declines by 2 % per yearThe average life of
metal containing products is 15 years
67 % of the metal in a product can be
recycled .
Hotelling: Mineral prices should rise at the same annual rate as the rate of
interest – if the price increase is lower, then more should be produced, if higher,
resources should be left in the ground However, technology changes and new
resources are discoveredOver most of human history, real mineral
prices have declined – technological progress has offset depletion
Is the trend about to change?
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