Global lead mine output successfully rebounded to the pre-Covid-19 peak of 2019 in 2022, according to recent data published by research firm BMI, a Fitch Solutions company.

The report, titled ‘Global Lead Mining Outlook’, highlights that further progress will be gradual and deliberate.

While the recovery of the lead mining sector to its pre-pandemic levels is positive news, according to BMI, achieving additional gains will be a slow process, necessitating sustained efforts over time.

The report underscores how investments in the establishment of new lead mines and the expansion of existing facilities will encounter limitations owing to growing environmental resistance against lead-related projects. This opposition is particularly pronounced in mainland China, North America, Peru and Australia.

Despite these challenges, BMI predicts the lead mine output will eventually reach the pinnacle it achieved in 2013 by the year 2032. The expected recovery is based on strong demand for lead concentrate from global refineries that cater to the automotive industry. This demand will serve as a driving force for continued investment in new lead mines throughout the current year.

Favourable global lead prices combined with the diminishing disruptions caused by the Covid-19 pandemic are expected to propel a robust expansion in global lead mine production. This growth is projected to continue until it eventually stabilises in the long term.

Historical data reveals that lead production faced a decline, plummeting from its peak of 5.5-million tonnes in 2013 to a cyclical low of 4.4-million tonnes in 2020.

Nevertheless, a steady recovery trajectory began in 2021. The report's forecast expects an average yearly growth rate of 1.5% from 2023 to 2032. This trajectory is expected to elevate yearly output to levels close to the 2013 peak by the end of 2032.

BMI reiterates the challenges tied to investments in new lead mines and the expansion of existing facilities. Environmental opposition against lead projects is on the rise in China, North America, Peru and Australia. Notable instances of legal actions, government reviews and protests against major mining corporations engaged in lead operations are expected to discourage further investments.

The growth of lead mine production is poised to be driven by a succession of polymetallic mineral projects. Lead is often a by-product of the extraction of other metals such as zinc, silver or copper. Elevated prices for zinc and copper, in particular, are expected to stimulate investments in projects that yield lead alongside these metals. In the global context, the leading lead producers, namely mainland China, Australia, the US and Peru, are projected to contribute to about two-thirds of the global lead mine production this year.

These countries host the most substantial array of lead mine projects on a global scale.

CHINA
BMI expects a growth rate of 1.5% in lead production within mainland China for the current year. This trajectory follows a year-on-year contraction of 5% in 2020. Although modest growth is projected in the subsequent years, the output is forecasted to remain nearly one-third below the peak of 3-million tonnes achieved in 2013.

The commentary acknowledges the potential for upside to this forecast. This potential stems from the diminishing exports of Russia to foreign markets, coupled with declining domestic demand and prices in Russia. These factors are likely to lead to a reduction in Russia's production over the medium term. Given that Russia's output constitutes about 5% of the global total, BMI suggests a marginal impact on supply and investment elsewhere.

The consolidation of lead mines driven by environmental concerns and orchestrated by the government is expected to curtail the growth of lead mine production in China in the forthcoming years. Moreover, the slow expansion of domestic lead refineries in China is identified as an additional obstacle to mine production growth. The commentary expects China's refined lead production to experience gradual growth, averaging a yearly growth rate of 1.1% from 2023 to 2032.

THE US
The 2023 lead production forecasts for the US have been revised upwards, predicting a rise of 9% to reach 304 400 t. However, sustained yearly lead production growth is expected to be limited until new projects commence operations after 2025. The commentary's forecast indicates an average yearly output growth rate of 5.4% between 2023 and 2032, attributed to a robust pipeline of domestic projects.

The US is poised to maintain its status as a prominent global exporter of lead ores and concentrates. This export dependency arises from the scarcity of domestic primary lead refineries.

According to the US Geological Survey, the last primary lead refinery in the US closed its doors in 2013. As a result, BMI predicts that the nation's mined production will continue to be directed towards international markets, while domestic consumption will rely on refined imports.

AUSTRALIA
Australia's lead sector is forecast to witness gradual growth in the upcoming years, following a period of substantial contraction spanning from 2015 to 2019. The BMI commentary predicts that the country's lead production will expand from 532 000 t in 2023 to 636 000 t by 2032, showcasing an average yearly growth rate of 2.1%.

PERU
Peru's lead sector is expected to experience modest production growth in the years to come, supported by a robust project pipeline involving minerals where lead is frequently extracted as a by-product. However, BMI notes that political uncertainty is likely to persist in Peru owing to upcoming general elections scheduled for April 2024. This uncertainty is expected to impact the country's regulatory environment, particularly concerning the mining sector, which could deter potential investors.

Further, challenges such as roadblocks and attacks on mining operations are expected to impede Peruvian mining production growth. Recent disruptions caused by roadblocks have interrupted supply flows to mines, while protestors have entered mines and caused damage to equipment.

Lead mine production's continued status as a by-product of other major mineral extractions, notably silver and zinc, underscores the projection of growth in the years ahead. Nevertheless, the forecast suggests that declining zinc prices will limit the growth of lead mine production, as the appeal of zinc projects diminishes over time.