Industrial Minerals: Unearthing Opportunities in the Earth’s Bedrock

1 March 2024

Andrew Rowell

Senior Communications Advisor

The world of investing often conjures images of bustling stock exchanges, high-frequency trading algorithms, and the relentless pursuit of profit. But what if I told you that some of the most valuable commodities lie not in the ticker symbols of precious metals companies on the ASX, but rather in the very bedrock beneath our feet? Welcome to the realm of industrial minerals, where the unassuming grains of sand, the fiery hues of garnet, ancient limestone and the crystalline purity of silica hold immense potential for savvy investors.

Silica: The Glassmaker’s Gold

Silica, also known as silicon dioxide (SiO₂), is the unsung hero of modern civilization. It’s the stuff that makes up the glass in our skyscrapers, the fibre optics that transmit data at the speed of light, and the silicon wafers powering our digital devices. But beyond its ubiquity, silica is experiencing a renaissance.

The global silica sand market stood at a robust US$22.85 billion in 2023, and it’s projected to grow at a CAGR of 5.8% through 2032, reaching a staggering US$37.95 billion¹. The glass industry, with its insatiable appetite for silica, is the primary driver. As solar panels become mainstream, governments worldwide are pushing for cleaner energy, further boosting silica demand. And let’s not forget water filtration—silica sand plays a crucial role in purifying our most precious resource.

Over the past decade, silica prices have danced to their own rhythm. Supply disruptions, environmental regulations, and technological advancements have all played their part. But one thing remains clear: the upward trajectory. As the world embraces sustainable practices, silica’s value is likely to keep ascending.

Investors eyeing silica stocks should keep a keen eye on the Asia Pacific region. With India and China leading the charge in infrastructure development, whole grain silica sand is in high demand. The glass industry, construction, and automotive sectors will continue to fuel growth. A key factor for investors to note is the level of purity (ie 3N, 5N etc), with the Ns referring the number of 9s (99.9% = 3N, 99.999% = 5N) with more Ns resulting in higher value products.

Limestone: The Ancient Rock with Modern Applications

Limestone, the bedrock of civilizations past, is far from obsolete. Its versatility spans from construction to agriculture, and its enduring appeal lies in its simplicity.

The limestone market has witnessed steady growth, driven by infrastructure projects, urbanization, purification and agricultural applications.

The global limestone market size was valued at US$72.31 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 7.3% from 2023 to 2030².

Limestone prices have remained resilient, reflecting its indispensability. As developing nations invest in infrastructure, limestone demand is expected to persist.

For listed company investors, limestone is often only produced as a by-product, however it is a commodity that is likely to have less volatility and produce a more stable production profile.

Sand: The Unsung Hero

Sand—the humblest of minerals—holds the world together. From concrete to silicon chips, it’s the unsung hero of progress. But don’t underestimate its significance.

The industrial sand market is estimated to reach US$37.95 billion by 2032, growing steadily at a CAGR of 5.8%³. Urbanisation, infrastructure projects, and the relentless march of technology drive demand. Whole grain silica sand, with its structural integrity-enhancing properties, is indispensable.

Sand prices have weathered storms—economic downturns, environmental concerns, and geopolitical shifts. Yet, they’ve held steady. As the world rebuilds post-pandemic, sand’s value will surge. Asia is expected to dominate growth in the construction sector, with sand imports expected to rise rapidly as local stocks diminish.

Investors, take note: sand is the bedrock of progress. As cities rise, as technology leaps, as the world thirsts for sustainable solutions, sand will remain steadfast. It’s not glamorous, but it’s essential. For Australian investors, there are a number of ASX-listed companies, particularly in Western Australia, that have defined very large sand/silica deposits to be exploited over the coming decade.

Garnet: At the cutting edge

Garnet—the fiery gemstone that graces our jewellery—also has an industrial alter ego. Its hardness, sharp edges, and resistance to chemical corrosion make it a sought-after abrasive material. But there’s more to this crimson beauty. The global garnet market is poised for growth. The global garnet market was valued at US$355.6 million in 2020 and it is expected to reach US$516.8 million by the end of 2027, growing at a CAGR of 5.5% during 2021-2027⁴. Industries like waterjet cutting,

sandblasting, and filtration rely on garnet’s abrasive prowess. As manufacturing processes evolve, so does the demand for garnet.

Garnet prices have been on a steady climb. As supply chains tighten and quality becomes paramount, investors can expect a glittering future. The solar photovoltaic panels market, which also relies on high-purity garnet, is set to soar.

Garnet’s allure extends beyond aesthetics. As industries seek eco-friendly alternatives, garnet’s natural abundance and recyclability position it as a gem worth investing in.

In Australia, there are a few players with significant garnet resources as a focus, with several others that count garnet as a significant by-product or credit.

In the world of industrial minerals, fortunes lie hidden beneath the surface. For investors with foresight, these unassuming grains hold the promise of prosperity, often without the volatility that accompanies other commodities. So, as you consider your next investment move, remember: sometimes, slow and steady wins the race.

White Noise communications is provided a fee for service working with companies which may have exposure to commodities or securities mentioned in these articles. All articles are the opinion of the author and are not endorsed by, or written in collaboration with, our clients.

Image source: https://unsplash.com/@evandemicoli