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A Road Map to Technology Metals - Part 3: Specialty Metals

Wednesday September 25, 2013 14:18

Since covering precious metals and rare earth elements in previous issues, we have come to the last in our series.  Today’s article is to introduce you to specialty metals. This isn’t a term as clearly defined as the previous two groups; both precious metals and rare earth elements are groups of elements on the periodic table. Specialty metals are called specialties for other reasons.

Some publications list this group under the headline “minor metals” which only defines a metal not traded at LME. What makes specialty metals special, apart from their technical properties and use in high-tech products, is the fact that many of them do not occur in nature in their pure form. They are primarily obtained as by-products of other metal mining or smelting operations. Hence, determining their availability in the future requires studying the markets of the “primary” products they are obtained with.

For illustration purposes, please take a look at this “Risk List” published by the British Geological Survey detailing and explaining supply risks for each of the metals in great detail. You will find many of the metals featured in this series high up in their charts.

Covering all metals in short supply is a difficult undertaking; in our series, we will therefore filter the world of “Specialty Metals” down to metals that are both in demand and physically available to investors. This list is likely to grow, so this blog will surely be updated as we move along on this journey.

Gallium (Ga)
Found mostly in bauxite, aluminum and zinc, as well as Germanium ores; typically in trace amounts of about 0.01% and as gallium compounds which are then converted to metals.  Gallium is currently an irreplaceable component in LEDs and other semiconductors.

Indium (In)
Rarely found in nature, it is commonly obtained from zinc or silver ores. Indium is widely used in optics and glass production (mostly as Indium-Tin oxide, also known as ITO) because of its ability to refract light. It is also used in flat screens (mobile phones, laptop computers) and photovoltaics.

Germanium (Ge)
One of the metals that are actually found in nature. Today, Ge is used mostly in fiber optics to prevent silica from deterioration. It has a high index of refraction and is also used in wide angle lenses, microscope lenses, night vision lenses and so on. Some publications suggest Ge may replace Ga in semiconductors, or silicone in computer chips. We’ll monitor these developments.

Thallium (Tl)
Found in copper, lead and zinc ores, not in nature. It, too, is used for light refraction in many optical applications. Furthermore, its conductivity changes with temperature making, it useful in infrared and gamma radiation detectors. It is not considered a risk metal, however, because none of these applications requires large enough volumes. In fact, production has been reduced since 2009 due to low demand.

The stars of this group are the first three metals; let’s keep Thallium in mind, however, because it will take only one new application to bring it back on the charts. We will add more specialty metals as they enter the arena of investable technology metals.

Finally, here is the third of our charts on applications of technology metals. This one featuring residential buildings. It should be noted that industrial buildings, too, are making significant strides towards sustainability which always equal using more technology metals. We described a forerunner of this trend in our report on BMW’s i3 electric vehicle launch event in which the real message was all-around sustainability, including the building the car is made in.

Residential buildings do, however, contribute largely to the production of greenhouse gases and use of fossil fuels. Their conversion to sustainable technologies will play a major role in shifting towards a zero emission environment. So here are the metals that will enable the shift:

For a high resolution version of the picture click here.

By Bodo Albrecht
tminsider@eniqma.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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