Strictly Boardroom touches base with Newman fresh from his return from the Indaba conference, to take a closer look at the ever-changing face of mineral supply.

Given that the majority of supply-side changes are evolutionary rather than revolutionary, we perhaps do not appreciate the marked changes that accrue over time.

Some examples from the last decade serve as a wake-up call that the nothing ever stays the same for long – with the underlying drivers including both new technology development and also the critical role of government.

So think back to 2003: MIM was in the process of succumbing to a bold bid from Xstrata – deemed a high-risk transaction by analysts.

The collective mining sector was worth around $US150 billion, being the approximate value of annual sales across the iron, copper, gold, coking coal, zinc, nickel, lead and platinum industries.

The Indaba conference back then attracted 1800 delegates.

In the background, China’s hunger for mineral resources was emerging.

Now fast-forward to 2013: the champion of Xstrata’s growth over the last decade, Mick Davis, is back on the hunt for assets again, with a war-chest approaching $2 billion.

Mining sector sales have quadrupled – courtesy of China’s voracious appetite – with more than $600 million in annual sales benchmark across the same metals industries as listed above.

Indaba delegates now number 7500.

Along the way a few other things have changed too.

Here are observations on selected changes to the minerals supply between 2003 and 2013.

Some of these developments are well known, others have happened very slowly but surely – the collective changes in just 10 years are quite stunning:

1. Nickel: Australian nickel supply has had a solid decade – up around 28% since 2003 to now approach 240,000 tonnes of annual production. That’s good.

   What few market participants envisaged way back in 2003, however, was the dawn of the rise of Indonesian and Philippines nickel supply, in part to serve China’s nickel pig iron sector.

   Indonesian nickel mine production has grown from 144,000 tonnes per annum in 2003 (below Australia at that time) to around 750,000t a decade later – a rise of more than 400%.

   Similarly, the Philippines produced less that 25,000t mined nickel in 2003 – but hit 300,000t in 2013, a 1200% escalation.

   High-quality sulphide assets command a premium in nickel – but the last decade has belonged to nickel laterites. The future of nickel supply is one of competing technologies;

2. Iron ore: The China-led demand story in iron ore is well known – with Australia having been the principal beneficiary.

   Take the role of India, however, to demonstrate the role of government in influencing supply-side outcomes.

   From less than 50 million tonnes in 2003, Indian iron ore exports were flying until politics got involved.

   By 2009, exports into the seaborne market from India exceeded 110Mt. Courtesy of political intervention that number had diminished to only 13Mt in 2013.

   Australia picked up the slack in the export market with thanks;

3. Uranium: Kazakhstan’s story in uranium over the last decade is not as well-known as it deserves to be. The rise of Kazakhstan to world number one producer status owes its origin in both technology deployment and also to supportive government.

   Back in 2003, Australia trailed Canada in uranium mine supply – with Australia’s 8900tpa up against more than 12,000t from Canada.

   Kazakhstan back then was principally a bit player – with annual production below 3500t.

   However, move forward a decade and Australia has gone backwards, down to under 8000tpa.

   Not surprisingly therefore Australia still trails Canada – although the latter has not fared much better, with Canadian production down to around 10,500t in 2013.

   These numbers illustrate the lost opportunity for both Australia and Canada.

   Kazakhstan proved the clear winner – having risen to more than 27,000t annual production in 2013, principally via in-situ leach technology deployment.

Nickel, iron ore and uranium have all had significant price spikes along the way – with winners and losers among the supplying countries.

The next decade will no doubt witness new windows of technological and market opportunity: identifying the “what”, “where” and “when” of future developments will separate the 2020 winners from the losers.

Good hunting.

Phil Newman is the CEO of CRU Consulting, a division of independent metals and mining advisory CRU Group (phil.newman@crugroup.com)

Allan Trench is a professor of mineral economics at Curtin Graduate School of Business and professor (value and risk) at the Centre for Exploration Targeting, University of Western Australia, a non-executive director of several resource sector companies and the Perth representative for CRU Consulting, a division of independent metals and mining advisory CRU Group (allan.trench@crugroup.com).