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November 2012 - Posts

  • The Global Aluminum Industry

    It makes sense that aluminum is one of the most common elements in our planet, as aluminum is prevalent in nearly everything we use. We drink from aluminum cans, and use foil to protect and cook foods. We used the finished product for containers, transportation, and medical uses. Every day, people around the world come into contact with this product in some way, and because of its malleable and conductive properties it’s possible to see greater innovations imagined for the future.


    Quick Facts About the Aluminum Industry

    • According to the Aluminum Association, the supply in the United States alone totaled almost 25 billion pounds. This includes newly produced aluminum and recycled materials.
    • As one of the planet’s most common elements, aluminum is a highly sought material used in construction, for household purposes, and for military.
    • Aluminum production is prevalent on all major continents, with about 44,0000 metric tonnes produced in 2011. (Source: The International Aluminum Institute)
    • Aluminum comes from bauxite, an ore that is processed to separate aluminum oxide from iron oxide. Alumina, extracted from aluminum oxide, is the primary ingredient in creating the aluminum we use.

    Top Producers/Exporters of Aluminum

    According to the United States Geological Survey, the following countries lead the world in production:

    • China – China’s production for the last few years totaled almost half the global output. In addition to being a large producer, China is also one of the top importers due to growing demand.
    • The United States – The US industry currently focuses on energy efficiency in order to compete in the world market.
    • Russia – Russia is home to RUSAL, the largest aluminum company in the world. RUSAL has interests throughout Eastern Europe and parts of Africa.
    • Canada – After Russia, Canada is the second largest exporter of product, with the United States its largest trade partner.
    • Australia – The Australian industry enjoyed fast growth over the last century, thanks in part to large bauxite deposits.

    Challenges in the Aluminum Industry

    Early in 2012, The Motley Fool reported various concerns in the aluminum industry, noting in particular how some of the top aluminum companies like Alcoa did not surpass revenues from the previous year. An excess of supply can threaten future production, as it appears that manufacturers have more than is needed for projects, forcing some companies to cut production. One silver lining in this situation lies with China, which currently experiences a growing demand for this product.

    One advantage to excess supply, however, could help improve various industries. Because aluminum is lighter than other metals, use in automotive manufacturing could help reduce car emissions and increase fuel efficiency. As consumers become more environmentally and socially conscious, aluminum production and usage stands to play a larger role in industry in the future.  

    by Kathryn Lively

  • The Global Silver Mining Industry

    One may presume silver takes a backseat to gold where interest in precious metals is concerned, yet economists and manufacturers highly prized this precious metal. Like gold and copper mining, the production of silver for commercial use and luxury remains an active global industry.
    Quick Facts About the Silver Industry
    • Silver is not always mined directly. Often miners extract silver from ore or copper.
    • Like other precious metals, silver serves as an excellent conductor of heat. Automobile accessory manufacturers have used silver to help with defogging functionality on windows.
    • Silver was once considered a more prized commodity than gold in early civilizations. Wealthy people used silver for eating and storing food because they believed it healthier. Hence, the phrase "born with a silver spoon in his mouth" was coined to describe children in moneyed families.
    • As with the gold rush, the prospect of finding silver in the western part of the United States encouraged expansion and the mining boom.

    Top Producers of Silver

    The CPM Group reported approximately 735 million troy ounces of silver - over twenty-two thousand metric tons - mined globally in 2010. Of the countries responsible for this amount of precious metal, the top producers include:

    • Mexico - Mexico has a long, stored history with silver production. For half a millennium, Mexico has led the world in mining, accounting for a third of the planet's silver. China, the United States, and Canada are counted among the top importers of Mexican silver.
    • Peru - While Peru is known for zinc mining and production, Minerals Yearbook reports that the country exports nearly half a billion dollars in silver to trade partners in the US, China, and throughout the European Union.
    • Australia - According to the Australian Atlas of Minerals Resources, Mines and Processing Centres, about a quarter of the country's overall mining produces silver. Japan is Australia's primary trading partner in this industry, claiming nearly all of it.
    • The United States - Eighteen states from coast to coast produce silver to some degree. According to Bullion Spot Price, the demand for silver in the US has risen dramatically over the last decade, jumping from over four dollars an ounce in 2001 to about forty in 2011.

    Challenges in the Silver Industry

    A recent article in The Market Oracle suggests a risk in silver futures as investors turn toward precious metals for investment, based on the idea that gold and silver in particular rarely diminish in value. This said, it doesn't necessarily imply that mining for silver is at risk, but as investors find gold either too expensive or not accessible, silver will serve as a welcome substitute. Whether this would prompt a shortage in demand has yet to be seen, but with silver a useful product in electronics and other industries, as well as a luxury item, it stands to reason production will continue in the countries that most rely upon this metal.

    by Kathryn Lively

  • The Global Gold Mining Industry

    While a large percentage of gold mined around the world is used to make items of great value – notably jewelry, collectible currency, and similar possession – you may be surprised to know this precious metal is also valued in the construction of various household objects like televisions and computers. This is because gold, like other metals, is a good conductor of electricity. You may not compare a working refrigerator with an expensive wedding band, but gold can be used in both.

    Gold industry

    • No matter the time, gold remains a good investment. According to the Motley Fool, one ounce of gold was priced at close to nine hundred dollars in 2008, three times the value of one share of Google stock.
    • In South Africa, there are mines that go as deep as twelve thousand feet, topping off well over a hundred degrees Fahrenheit.
    • Most items that people may believe are pure gold, like certain coins and Olympic gold medals, are actually gold-plated.
    • Gold is a very versatile element. It can be made into thread for fabric or used to design chocolate.
    • The largest gold mine in the world, according to International Business Times, is the Grasberg Gold Mine in Papua, which has produced over two million ounces.

    Top Producers of Gold

    You are likely to find gold on every continent in the world. In some parts of the United States, like Nevada and Georgia, there are mines where visitors can pan for nuggets as prospectors did in the 1800s. When it comes to producing and exporting product, the United States Geological Survey lists the following as the top countries:

    • China – in 2011, China produced overall over 350,000 kilograms of gold. The Zijin Mining Group Ltd is presently the country’s leader in precious metal mining.
    • Australia – Australia’s output was over a quarter of a million kilograms in 2011.
    • The United States – It is estimated that three percent of the world’s output of gold comes from Nevada alone. Nevada accounts for nearly all of American production.
    • Russia – Two hundred thousand kilograms of gold were produced from Russian mines in 2011. The Polyus Company is one of the nation’s largest gold concerns.
    • South Africa – South Africa is one of the world’s leading countries in precious metal mining. In addition to gold, the country also produces large volumes of diamonds, platinum, chrome, and manganese.

    Challenges in the Gold Industry

    If there is one product that could be considered recession proof, it is gold. Gold never seems to lose value and will likely always trade high. This, of course, precipitates the challenge in meeting the demand for gold. According to BullionVault, a decline in skilled workers may contribute to a downtrend in production. Fears of mining accidents, brought to global attention in recent years, may contribute to this growing gap.

    Despite these forecasts, the potential for mining gold and other precious metals remains so long as the resources are available. We are likely to prize gold as a personal possession for many years to come.

    by Kathryn Lively