Antimony is the poster metal for metals with previously unknown new uses - uses that were totally unpredicted and have changed our lives forever.
DETROIT (ResourceInvestor.com) -- Resource Investor readers' comments most often ask me how, exactly, to invest in specific metals or groups of metals when I write survey articles and make predictions about supply or demand drivers. The obviously self-serving analyses put out as press releases or information by most junior miners are either selective or simply fluff, so it is impossible for me to make a recommendation to invest in one of them just based on the company's own information.
What I try to do is steer you to increasing or new demands for specific materials and point out after that, as a risk reducing factor, which companies are already producing, getting close to producing or just thinking about producing those materials.
For 2008 I'm going to continue to do that, but I'm also going to adopt the risk measurement system that I have sometimes used recently to rate or group mining ventures. I'm going to tell you in this manner what I think is the probability that a given mining venture will be able to enter the market with a normal form of a metal or mineral in time to catch a demand cycle at its top.
I'm going to concentrate on the so-called minor metals because their uses, actual and potential substitutions for them, and new uses for them are much easier to quantify because they are almost always limited, usually by the economics of supply.
Minor metals can be grouped into two categories, byproducts and primary mine production. Recycling is a critical source of supply for many of them because so many of their uses are dissipative, i.e., the use is so low per unit that the cost of selective recycling is beyond any economic return, so once mined, refined and used, they are gone forever from the supply base. The irony is that our uses for these rare elements are actually making them rarer.
I'm going to do this alphabetically and begin with the minor metal antimony, which I think should be the poster metal for metals with previously unknown new uses, which were totally unpredicted and have changed our lives forever.
Antimony
Notwithstanding the Hollywood version of the history of mankind in which the leading men of any given society are always covered in ceremonial bronze or silver armour wearing metal armbands, bracelets and rings, drink even beer from goblets made of precious metals and eat off of thick silver plates with metal knives as utensils, it is nonetheless true that for most of human history all metals were rare, difficult to purify and work, and thereby precious, and none were considered minor. The palaces as well as the ordinary people's homes had only a tiny fraction of their contents made of metal until well into the 20th century. Certainly no buildings had structural metal as the principal means of construction until at least the end of the 19th century with the completion of Chicago's "Flat Iron" building designed by Louis Sullivan, Frank Lloyd Wright's mentor.
Antimony was known to the ancient world in the West but not as a metal or one of the seven elements. It was primarily used in the powdered form of the predominant antimony mineral stibnite, Sb2S3, antimony sulphide, to darken the eyelashes and eyebrows and to highlight the eyes by outlining them as the ancient Egyptians used to do. Stibnite cosmetics dating to 3000 BC have been discovered.
Although there are ores of "native" antimony, the ancient world's paradigm model of a metal was of a lustrous malleable material which could be worked into objects of either great structural strength, e.g., alloy forms based on iron or copper, such as wrought iron, steel, hardened copper, bronze and brass, or that at least had the strength to retain their shape under their own weight, lead, gold and silver, for example. Although the ancients classified mercury as an element, it wasn't considered by them to be a metal.
In modern times we define metals more technically as having a certain type and degree of electronic property when pure. Antimony falls outside of the modern definition and so is classified as a semi-metal or metalloid in common terms.
Antimony's main use up until now and continuing as of this moment in time has been based on a property discovered of its chemical compounds only in the 20th century; the fact that some antimony compounds will not support ignition. They may burn when directly heated in an open flame, but as soon as the flame is removed they extinguish themselves by a well understood mechanism. This property has been used to "flame proof" clothing, children's clothing in particular, and so today, every industrial country on earth mandates flame proofing for all children's clothing and most clothing in general.
The second largest use of antimony has been as an additive for the lead used in automotive SLI, starting-lighting-ignition, so-called lead-acid storage batteries. The antimony "stiffens" the lead plates so that they will have no tendency to flow under gravity and thus risk shorting the battery out. Ancient Roman plumbers and builders would have loved this knowledge.
Both of these uses have been lately declining somewhat as substitutions for both applications are well known and are becoming more common as the supply of antimony has been essentially "cornered" by the People's Republic of China, which, to be fair, has nearly two-thirds of the world's known reserves of antimony.
World production of antimony in 2006 was 131,000 metric tonnes, of which China produced 110,000 metric tonnes.
There is today, as of this writing, no domestic U.S. antimony mine production. The U.S. consumed 27,600 metric tonnes of antimony in 2006, down from 36,800 tonnes in 2004.
Look at the pricing of antimony since the shutdown of the last U.S. antimony producing mine (a silver mine with an antimony byproduct) in 2004. Note also, although it is not shown on the above graph, that antimony was 88 cents per pound in 2002. This means that if you purchased physical antimony in 2002 as an investment, it would have been a much better choice than gold!
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Now I want to quote from the USGS Mineral Industry Survey of Antimony in the third quarter 2007 because I want you to see how some analysts are now coming to believe that the metals market has been manipulated during the 21st century while Wall Street pundits have been declaring that Asian demand alone is the driver of supply pricing in this world dominated, they insist, by American-style free market capitalism:
A report cited by the USGS "…stated that decades of market instability for the main minerals and metals produced by China appear to be finally over. According to (the report), boom and bust manipulation of markets and prices through alternately dumping supplies and withdrawing from the market of such commodities as antimony, tin and tungsten had all but destroyed mine output and development in competing (with China) countries....
The USGS survey goes on and makes very good reading for investors. The most important further quote for this article is "China is now the world's leading importer of antimony ores and concentrates, and its domestic antimony demand has also become the world's largest. The solid foundation for the antimony industry has reawakened interest in antimony resources in Australia, North America, Russia, South America and elsewhere, and new projects are under development."
Since China is by far the world's leading producer of inexpensive children's clothing, the decline in the use of antimony as a fire retardant in the U.S. while it is increasing in China is no mystery. Also since 75% of automotive lead-acid batteries are recycled for their lead (and antimony) in the U.S. while China is building millions more of new lead acid batteries each month for its rapidly expanding OEM automotive SLI battery industry, it is not surprising that new antimony use for batteries in the U.S. is declining while it is growing in China.
Eleven months ago, in February 2007, one of the most prestigious weekly general science journals in the world, Nature, carried a brief report of an article that had appeared earlier that month in the very technical journal, Physical Review Letters, and I want to quote just one sentence of that report for your perusal:
"Commercial rewriteable DVDs and prototype memory devices record information in phase-change materials such as germanium antimony telluride (Ge2Sb2Te5 or GST) that switch rapidly between crystalline and amorphous states when heated with a laser."
It was in my own working lifetime that the pedestrian semi-metal antimony, used for most of the time it has been known as a component of cosmetics and, in modern times, pewter cooking and serving ware and, in the last century and a half, as an additive for linotype metal and for the lead plates used in lead acid batteries, was discovered to form glasses that could be switched either by heat or an electric field rapidly between crystalline and amorphous states with a collateral switching of both optical and electronic properties. I was actually present when a group of engineers and scientists at Energy Conversion Devices, Inc., in Troy, Michigan, decided to try a thin film of germanium, arsenic and tellurium as a "recording medium" using an optical laser to write, read and rewrite information. This experiment ultimately resulted in the recordable DVD and a parallel line of research resulted in the high capacity solid state "flash" memories that are now beginning to phase out hard drives in competition with silicon based flash memories.
When someone suggested replacing arsenic with antimony for safety's sake, they did not realize that a revolution in portable entertainment had just begun.
The U.S. had in 2004 one small producer of antimony remaining. That was US Antimony Corp., [OTC:UAMY], in Thompson Falls, Montana. They produced somewhere between 750 and 1,000 metric tonnes of antimony product per year. In September 2004, USAC announced that it was foregoing antimony sales due to a shortage of raw materials. In an article in American Metal Market, September 14, 2004, pages one and two, the shortage was blamed on Chinese antimony producers simultaneously lowering export prices and putting other antimony oxide producers out of business, so as to increase demand for Chinese antimony and reduce the supply from the competition.
This global shortage of raw material and the nature of Antimony deposits make this one of the metals small miners might be interested in. The USGS Open File Report 03-019, page 10, cites a 1985 work by Plunkert from the U.S. Bureau of Mines Bulletin 675 that describes antimony mining thus: "The typically small ore bodies from which antimony is produced as a principal product do not lend themselves to exploration on a large scale. When possible, they are mined by open pit methods. Underground antimony mines are typically small, the ore body being accessed by a short adit or shaft, and are developed by drifting along the vein and stopping by simple overhand methods. Mines in which antimony is produced as a byproduct use the large-scale methods common to base- and precious-metal mines." This is reinforced on page 32: "Known antimony deposits in the United States tend to be small irregular deposits that do not lend themselves to large-scale low-cost mining methods."
In the fairly recent past, antimony mines proliferated throughout the southwestern U.S. In southern California, for example, one can find closed or abandoned antimony mines in Inyo, Kern and San Bernardino Counties. In Inyo County, antimony is found at the Bishop Antimony Mine, the Darwin Antimony Mine, the Old Dependable Antimony Mine and the Wild Rose Antimony Deposit. In Kern County, antimony is found at the Alice Mine, the Antimony Consolidated Mine, the Antimony Peak Mine, the Big Oscar Antimony Deposit, the Erskine Creek Deposits, Jawbone Canyon Mine, Jones and Wimmer Antimony Claim, the Little Caliente Spring area, the Mammoth Eureka Mine and the Rayo Mine. In San Bernardino County, antimony is found at the Antimony Mine, the Atolia Mine, the Desert Antimony Mine, and the Mountain Pass Antimony Mine. It is found in many other places in California and throughout the Southwest, possibly in commercial quantities. The problems for all of these mines were the same: low antimony prices in the past and environmental regulations requiring time and money expenditures in advance with no guarantee of either high antimony price stability or swift passage through regulatory bodies.
The following advice for prospectors and small miners, written by a contributor, was published in 2006 on a website I edited, http://www.theweekendminer.com:
"[We] got a number of questions regarding how to sell antimony; mostly what form or forms is it salable in? I really didn't know so I contacted a couple of experts.
The fellows at Amalgamet Canada gave me the following; which I believe is for a Chinese concentrate:
- 60% Sb minimum
- 0.5% As + Pb combined; usually 0.25% each; ideally 0.15% max. each
- 30 ppm Se max
- 20 ppm Hg max
- trace Te (less than 10 ppm)
- 10ppm max Sn
- trace Bi (less than 10 ppm)
- S usually 24% min.
The Western U.S. and Mexico expert has got to be John Lawrence, the president and CEO of US Antimony in Thompson Falls, Montana. Here is the text of his reply to me:
'We purchase either Antimony concentrates, hand sorted ore or various residues and metal. The concentrates and hand sort specifications are:
- 60% Antimony (Sb)
- less than 0.2% Arsenic (As)
- less than 0.2% Lead (Pb)
- less than 50 ppm Selenium (Se)
- low Bismuth (Bi)
- low Tellurium (Te)
For this we would pay 50% of the LMB Rotterdam quotation for Antimony metal. For lesser grades or higher impurities we would pay less. The price would be FOB our plant at Thompson Falls, Montana, or Madero Coahuila, Mexico.'
(Note: The price at the time of his e-mail back to me was $5,353.13 per metric tonne - 2,204.62 pounds; or about $2.43 per pound. This would make the prime ore worth more than $1.00 per pound. Not bad for picking up rocks and helping keep American industry going and growing.)"
Interestingly enough prices right now, January 2008, for antimony have doubled just in the last two years, so those of you hardy enough to look for stibnite or native antimony, which is found in California, can get $2.00 a pound for hand sorted ore. A pick up truck full could bring you several thousand dollars.
As with tungsten and basically for the same reason, market manipulation in the recent past to drive out competition, I can only recommend one investment for Americans who want to invest in an American company. It is US Antimony in Thompson Falls, Montana. US Antimony operates the only remaining antimony smelter in the US. Although US Antimony is no longer producing ore in Montana, the company is cleared to mine ore in Madero Coahuila, Mexico, where the Mexican government has encouraged it to build a smelter operation. In any case, because it gets some ore from its own Mexican operations and buys ore from Peru and even from China, if it can, and from small miners, when it can, it remains in operation.
The manufacturing of recordable DVDs and flash memories is not labour-intensive. Both technologies were invented and perfected in the United States. Germanium and tellurium are both byproducts produced now or produced in the past in the U.S. or, at least, in North America. There is antimony to be found and produced in the U.S. and Mexico. Therefore high value added recordable DVDs and flash memories can be produced in the U.S. from domestic North American raw materials. This would only take will, because there is a way.
Valuable raw materials used to make both recordable DVDs and flash memories could be recycled economically, so that the minor metals need not be lost. While the entrepreneurs among you are thinking this over please invest in US Antimony, so that we have something left to conserve.
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