• Peter Gadsdon

Antimony Outlook, new battery applications and a reliance on artisanal mining, with Hallgarten & Co

Mining Network: “To kick things off, what is antimony and what's its main uses in the market?”

Hallgarten & Co: “Okay well, antimony you've all seen in one of its manifestations. It's been used as far back as the ancient Egyptians, so the famous Egyptian eye with all that mascara, you know Cleopatra etc. That was actually antimony that they used to use as an original makeup but for most of the last few hundred years antimony’s’ main uses have been as an alloy with lead because everybody who knows lead knows it's very soft, so to harden it up they used antimony as an alloy. As a result of that, antimony was a major metal in wartime situations, due to the use of lead in ammunition. It's still used in ammunition but it's become one of its secondary uses since really the 70s-80s. The new application was flame retardants/fire retards so around 65% all antimony is now used in flame environment, and it is the major flame retardant component in plastics and in textiles, construction materials, those type of things. So, it's become really important in that space. It's all around you, you just don't know it's there. Best example is in your car or the side panels, dashboard all around you. You've got all this plastic and of course plastic burns like crazy in a fire situation and so most of those panels that you've got around you are actually like 6%-7% antimony because at those levels if there is a fire, the antenna component slows down the fire. It doesn't stop it, but it can potentially stop things from catching fire in a situation like that. The main uses are they're used in electronics, in some chips but the usage, as has anything to do with chips is all micro, so the usage is pretty small. The big new usage which we'll talk about later is in antimony molten-salt batteries. Which is the new technology in mass storage devices, up there competing or I’m complimenting dare I say vanadium and vanadium redox flow batteries. So, that's the main usage of antimony. There's some of the lead acid batteries as well because of the lead component but most much of that is recycled. So, it's all like a bit of a closed circuit there in lead acid batteries.”

Mining Network: “As you said we'll want to go onto the battery side of this as well in a moment. I did read a report recently saying that in 2020 the market size was around $2 billion, does that sound about right.”

Hallgarten & Co: “Probably better not to talk in terms of the market size, in dollar terms. To talk about the absolute size which is 170,000 tons a year. What has happened is over the last 12 months the price of antimony’s gone from $5,500 a ton to in the last week topping $13,000 a ton. So, whatever the size of the market was a year ago it's now around 130% bigger than it was back then. So, it was 2 billion it’d now be 5 billion. Really the best way of calculating is just multiplying 170,000 by 13,000 and then you'll have the big number. It's a big market now, very big one. Not as big as tin but very sizable and there are shortage situations that have broken out and that's what some propelled the price (amongst other things) to this current level.”

Mining Network: “With this shortage is this more due to the supply side of this market and if you don't mind where is most of the supply coming from?”

Hallgarten & Co: “It’s mainly from the supply side because China has been the biggest producer of antimony for a very long time, since before the first world war. China's been probably the world's largest producer since like the 1850s. So, this is the metal that China has dominated the longest. When no one even knew about rare earths, China was dominating antimony. It didn't really matter to the rest of the world because they could get these supplies from there and there were a lot of mines outside China. Really since the 1980s predatory pricing by the Chinese has driven away most of the production outside China and so China ended up, not only being the largest processor but also the largest miner with something between 80%-90% of the market. what's happening in recent times though, is that Chinese production has been in a secular decline because they have one really big mine that has been sometimes 30% of the global production and that's a really old mine, it goes back to the 1500s in fact and it's got shrinking production. The Chinese also shut down some polluting mines and some polluting processing plants and so Chinese share of mine production has fallen from nearly 90% down to probably around 60% and they've been making up the difference so that they can keep their processing dominance going, by buying up artisanal products. Which they've been ripping out of Burma, Laos, Honduras and Bolivia. Sort of 30 worldly locations that they can do a bit of predatory buying, snap up the product from micro producers and then take it back to the mothership for processing. So, that is how they manage to maintain their dominance in the processing space where they still have probably 90% of the global processing capacity.”

Mining Network: “It doesn't seem too sustainable, especially in places like Myanmar where there is conflict that you're going to have issues.”

Hallgarten & Co: “Absolutely, well there are several motives for the rise. One is secular decline in Chinese production. Two is the coup in Burma which happened late last year. Three there was all the dislocation that was caused by the pandemic into shipping, to containers, at the moment for instance there's a $1000 premium per ton for product delivered into the US, over the product delivered to Rotterdam. There's a similar type of premium between a product out of ports in China and Rotterdam. So, definitely shipping dislocation has had a big effect upon the situation. We can't forget the demand side, where for a number of years there was a sword dangling over the head of the antimony market, in the form of fears that regulators in the EU and in some US states were going to crack down on the use of antimony as a fire retardant in clothing. Specifically, children's pyjamas, which is like a micro fraction of the antimony market but that was one of the things to keep the price down around five and a half thousand. Really last year all the regulators realized that there was no replacement for antimony in these pyjamas it was either you put it in the pyjamas, and you know face the risk, or you end up with the children in flammable pyjamas. Which do you prefer? So, the regulators step back and that then took away a threat that had been dangling over the antimony fire retardant market for a long time. That then brought renewed buyers into the space. Everyone was de-stocked as well after the pandemic. So, there was no product lying around spare.”

Mining Network: “Just quickly on demand because we did touch on that very quickly there. I believe we spoke before, and you were mentioning around 2%-3% percent growth per annum in the antimony market in years gone by. Has that changed this year and are you expecting that to be changing in the years to come?”

Hallgarten & Co: “The growth in the space has been steady, something like the growth in western GDP. So, it's like 2%-3% a year, sometimes a bit lower and sometimes a bit higher. Particularly back in 2014 and 2012 when the price spiked last to $14,000. There was quite a bit of replacement going on in the space but as much as could be replaced, has been replaced. So, now we're sort of like at a rock bottom there. So, the growth in that space of flame retardants, batteries, lead acid batteries and ammunition are pretty stable, just trending up with us. The big new usage though is potentially the molten-salt batteries. Now the judges are out on how big this will be, if it'll be big at all? If it is gaining traction as a mass storage mode then the potential to light a fire and demand, is big. The problem there would be that there's a price, like in vanadium, that goes too high then the application doesn't get traction because it becomes unviable as a means of storage. The molten-salt batches if you can briefly digress into those? Primarily used for on-grid and off-grid storage. A large amount of electricity in off-peak periods. So, whereas for instance solar and wind are very regular. Well, we know when the sun shines, the sun doesn't all shine, particularly in Britain. So, you store it when you can but that's not necessarily when the users want the electricity. The peak periods for most uses are between like 4pm and 8pm. So, if you can generate wind or solar and put it into large storage devices then you can release it to the grid later on in the day/night when the real demand is there. So, that's the primary application of these things but at the moment, for instance you know the largest current applications out of the desert in Nevada? Where there's a really big solar array? They are storing the power that they generate off the solar array onto molten-salt batteries.

Mining Network: “Do you see these as a competitor to the redox flow batteries?”

Hallgarten & Co: “Redox flow batteries are more off grid than the antimony molten-salt. They're very different, primarily in the pricing as well. The problem that vanadium has had, is that its price (as we mentioned in our talk the other day), has oscillated between $6 and $30 from time to time. When it goes above $10, in theory, the battery operators just stop making the batteries because they claim that it's unviable. Antimony at $14,000, (or $13,000 as it is at the moment) is okay. If it went above $15,000, I think it might actually choke off the demand for development of the molten-salt batteries it becomes too expensive. There's a little statistic out there, where the largest developer of these batches said that for each gigawatt hour of storage capacity in molten-salt batteries, 1% or 1700 tons of antimony is required for each gigawatt of storage. So, out of 170,000 tons a year that's 1%. If you suddenly had demand for 10 gigawatts of storage that would be 10% of the global demand, so if antimony molten-salt gets traction and starts to absorb multiple gigawatts of antimony product into its demand, then we could be seeing a lot higher growth than rather tepid demand increments from just five returns. So, it's anybody's guess how much it could be but it's not going down, let's put it that way.”

Mining Network: “Well it sounds like a contender. Like you said, it doesn't need to be off-grid like vanadium and it also has the perks of not being subject to cold weather or particularly hot weather as well, which is a great benefit for a battery. Not many batteries can claim that.”

Hallgarten & Co: “Yes. Particularly lithium-ion batteries do not operate well in cold weather environments and then in hot weather environments they can spontaneously combust so like lose-lose situation with lithium-ion batteries when they're out in the elements. Whereas these antimony molten-salt batteries you know make their own heat in the cold environments and they don't catch fire in the heat, they're hot already. So, yeah that's true.”

Mining Network: “Just really quickly because I know we are short on time but could you just break down the chemistry or sort of what's actually in these molten salt batteries? Obviously, there's the antimony but what else is actually in there as well?”

Hallgarten & Co: “Well quite a lot of that is proprietary because the main development of these batteries is this company Ambry. Ambry was founded by a professor at MIT a bit over 10 years ago with the backing of Bill Gates of Microsoft and Vinod Khosla of Sun Microsystems. Since then, they've done another big financing with Reliance Industries in India the massive conglomerate and Pulse the massive New York hedge fund throwing in the money. So, you've got pretty powerful backers behind it, but they don't want their ‘secret sauce’ bandied around. I know bits about it, but it doesn't include magnesium as well. So, it's a different chemistry set to what you've got with lithium-ion batteries and it definitely doesn't have cobalt which is an advantage.”