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August. 2022
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Metals & Minerals Rises to the Occasion in Project Spending Index

A glance at Industrial Info's latest North America Industrial Spending Index shows the Metals & Minerals Industry with a 38.64% increase in project spending from a year earlier.

The index puts Metals & Minerals project spending at $54.07 billion for the month of June, up from $39 billion in June 2021. Each month, the index compares the current active spending rates to the previous year, in order to get a measure of growth or contraction in the industrial market.

For June, spending was up in all but two (Oil & Gas Pipelines and Alternative Fuels) of the 12 industries tracked by Industrial Info (see below).

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Joe Govreau, Industrial Info's vice president of research for the Metals & Minerals Industry, attributes the project spending boom to battery metals, the energy transition, critical minerals and the shoring up of industry supply chains.

Speaking at a recent Industrial Info webinar, Govreau said one of the key drivers of mining activity is the energy transition, which is changing the types and amounts of mined commodities in demand. Buildout of mines to extract lithium, copper, cobalt and other commodities is a direct result of the energy transition. For more information, see July 14, 2022, article - Global Mining Activity Remains Strong in Face of Changes.

Indeed, mega-multibillionaire and Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas) Chief Executive Officer Elon Musk was recently quoted as saying the business of refining lithium for batteries is "basically like minting money right now."

One lithium project being tracked by Industrial Info is Li-Cycle Incorporated's (NYSE:LICY) (Toronto, Ontario) lithium hydrometallurgical refinery in Rochester, New York. Construction kicked off at the start of 2022, with completion planned for second-quarter 2023. The company says it is working to build out a network of feeder plants to process spent electric vehicle (EV) batteries and battery manufacturing scrap.

The refinery hub will be able to process 35,000 tons per year of metals-rich black mass battery material, equivalent to supply 225,000 EVs per year. Li-Cycle plans to process the material to produce graphite, copper sulfide, gypsum, manganese carbonate, cobalt sulfate, nickel sulfate, sodium sulfate and lithium carbonate. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the project report.

Li-Cycle has received a $200 million investment from Glencore plc (Baar, Switzerland), which is enlarging its footprint in the market for EVs. For more information, see June 3, 2022, article - Glencore Stakes Out Bigger Role in Battery Market, Adds Nickel Capacity.

In May, Li-Cycle marked the opening of its third "spoke" facility as part of its feeder network. Located in Gilbert, Arizona, the facility has the capacity to process up to 10,000 tons of manufacturing scrap and end-of-life batteries per year.

And on the Steel Side...

Govreau said he believes the North American steel industry is at the tail-end of a project buildout period.

As if to bolster that thought, Celso Goncalves, chief financial officer of Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio), recently said the steel producer has no plans for any new major capital projects on the horizon.

Cleveland-Cliffs touts itself as the largest steel supplier for the U.S. automotive market. As such, the company saw U.S. auto production plummet from 17 million units per year to only 13 million units during the past two years due to COVID-related issues and ongoing supply-chain constraints. Chief Executive Officer Lourenco Goncalves said during the company's second-quarter earnings conference call that he's waiting for auto production to begin increasing, beginning in the second half of this year, to start meeting pent-up demand for cars, trucks and SUVs.

On the other hand, Nucor Corporation (NYSE:NUE) (Charlotte, North Carolina), in June completed the $550 million expansion and modernization of its Gallatin Thin Slab Steel Mill in Ghent, Kentucky, and its Brandenburg, Kentucky, plate mill is on schedule for a late-2022 production start. Subscribers can click here for the Gallatin project report and click here for the Brandenburg Steel Plate Mill project report.

Meanwhile, Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana) has announced plans enter the aluminum business with the construction of a 650,000-ton-per-year low-carbon, recycled aluminum flat-rolled mill in the southeast U.S., with two supporting satellite recycled aluminum slab centers, at a cost of $2.2 billion. The facilities will serve the automotive market. Subscribers can click here for the related project reports.

Subscribers can click here for all project reports cited in this article and click here for all related plant profiles.

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