Antimony: Put It on Your Radar
Tuesday July 23, 2013, 4:30am PDT
By Andrew Topf - Exclusive to Resource Investing News


The silver-grey metalloid is quietly making its way onto investors’ radar with some solid fundamentals, due mostly to an undersupplied market.

Like rare earths and graphite, most antimony is mined in China, specifically at the Xikuuangshan mine in Hunan province, the world’s largest antimony deposit. Antimony is typically extracted from the sulfide mineral stibnite, with lower grades concentrated by floth flotation and higher grades smelted.

The US Geological Survey (USGS) estimates there are about 1.83 million tonnes of global antimony reserves, with total production in 2012 of 180,000 tonnes. China produced the lion’s share, 150,000 tonnes, with the remainder produced by Russia, South Africa, Tajikistan, Bolivia and a handful of other countries. The United States does not mine any primary antimony, although one company in Montana was able to produce antimony metal and oxide using foreign feedstock, notes USGS.

As well as through mining, antimony can be derived by recycling lead-acid batteries, and it is also produced as a by-product of smelting other metals, mainly gold, copper and silver.

Top critical metal

While most people have never heard of antimony, it is without a doubt one of the most vital materials due to its primary use as a fire retardant. Compounded as antimony trioxide, antimony is used in fire-retardant bedding, children’s clothing, toys, aircraft and car seat covers — a sector that makes up about 60 percent of the antimony market. Antimony is also consumed in alloys for batteries, plain bearings and solders. FUTURE APPLICATIONS INCLUDE USE AS A COMPONENT IN PHASE-CHANGE MEMORY, WHICH COULD LEAD TO A DRAMATIC INCREASE IN COMPUTER TRANSFER SPEEDS.

The British Geological Survey in 2012 named ANTIMONY THE MOST AT RISK OF A SUPPLY DISRUPTION due to the high concentration of production in one country: China.

Chinese monopoly cracking

In a story that sounds familiar to followers of rare earths, the Chinese stranglehold on antimony production is weakening, and that is providing opportunities for non-Chinese companies and investors in the west. According to an infographic published by Visual Capitalist, 17 percent of antimony supply is sourced from small, illegal, polluting mines in China. Like the recentcrackdown on illegal rare earths concentrate, these mines are gradually being identified and shut down, resulting in fewer antimony exports.

Minormetals.com reported that Hunan province has curbed output to comply with Chinese government restrictions; along with shutting illegal mines, the government has a mandate to protect domestic supply of antimony to feed China’s industrialization. This supply is threatened because, as Visual Capitalist points out, China has nearly exhausted its supply of high-grade antimony ore.

Seven-fold price increase

As a result of the above-mentioned factors, antimony has enjoyed a significant price increase over the past several years. In 2002, the metal was being sold for $2,000 tonne, but by 2011 it had risen a whopping 700 percent, to around $15,000 per MT. While the price has dropped from its 2011 highs, it is still selling at a considerable premium to previous lulls, currently sitting just under $10,000/MT.

At those prices, antimony consumers may look to substitute the metal for something else, but as Minormetals.com points out, that will be difficult because ALTERNATIVES TO ANTIMONY ARE HARD TO FIND.

Bullish outlook

The reduction in Chinese exports of antimony has not been made up by non-Chinese mines, most of which closed down due to Chinese dominance in the sector and a flagging metal price. That makes for a healthy antimony market, with demand outstripping supply resulting in a climbing price. Strong demand for antimony combined with dwindling and precarious supply will exacerbate the current supply deficit notes Visual Capitalist, with the price expected to climb 5 percent annually TO REACH $20,000 per tonne by 2020.

Antimony has not escaped the notice of Hallgarten & Company’s principal mining analyst, Chris Ecclestone, who told The Metals Report recently that antimony is his favorite specialty metal.

“The antimony market has seen little investment for years because of waning China dominance. Now, new applications for antimony are shaking out the old producers and changing the market dynamic,” said Ecclestone, who observes that “every metal mineral has a different story.” “Most Western mines closed down decades ago, but recently, a few Western mines have reopened, although not enough to make up for reduced Chinese exports. As a result, I expect antimony to be strong.”

How to invest in antimony

Without a physical metals market, antimony investors must place their bets on mining equities.

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