International Zinc Association 2014 Annual Report
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MAK I N G A DI F F E R E NC E
ESSENTIAL FOR LIFE
l Zinc is essential for all living things and plays a key role in numerous aspects of cellular
metabolism. It plays a role in immune function, protein synthesis, wound healing, DNA synthesis and cell division. Zinc also supports normal growth and development during pregnancy, childhood and adolescence.
Introduction The International Zinc Association (IZA) was created in 1991 by a group of leading zinc producers and is guided by the principal of undertaking actions that positively influence the market and image of zinc. The Association’s primary goal is to deliver value to its Members through innovative programs in its strategic focus areas of Environment and Sustainable Development, Technology and Market Development and Communications. IZA provides a forum for the zinc industry to analyze and anticipate issues affecting zinc globally and to ensure a timely and appropriate response. IZA coordinates initiatives good for zinc that are best done collectively, undertaken either directly or through involvement and support of customer groups and related stakeholders on the local, regional and global levels.
Table of Contents Chairman’s Letter................................................................................... 6 Executive Director ’s Message............................................................... 9 Environment & Sustainable Development.......................................10 Health & Nutrition...............................................................................13 Communications..................................................................................14 Zinc Nutrient Initiative.........................................................................17 Technology & Market Development.................................................18
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Chairman’s Letter Operating in the zinc mining and metals industry continues to be more challenging in terms of market access and in ensuring the Industry has a license to operate. Product restrictions, competing materials, environmental regulations and sustainability considerations are shaping our business practices at a very fast pace. To respond to these issues individual companies could try to tackle them on their own. But it is much more effective and efficient to manage these issues collectively. And therein is the raison d’être of the International Zinc Association. 2014 was another busy and productive year at IZA with significant progress on many fronts. New concentrate shipping regulations (IMO), new demands for the control of mercury emissions (Minamata Convention), and the threat of adding zinc to EU prioritization list are just a few examples of the issues that IZA and Member companies are jointly addressing. The new Life Cycle Inventory (LCI) shows significant improvement in our Industry’s environment footprint as compared to 2008; it is critical for keeping zinc on specification lists for groups such as global green building councils. There are also new challenges and opportunities in the zinc markets, which will be highlighted in the letter from the Executive Director. IZA’s Zinc Saves Kids Initiative was a tremendous spark for many zinc companies to engage in their own zinc and health sustainability platforms, thus allowing IZA to reduce its expenditures in this area. These initiatives have truly helped diffuse many of the negative arguments directed towards our Industry. But just as importantly, ZSK’s program has made a huge difference in Peru where the government has recognized the life saving effects of zinc and has made zinc part of the National Health program. Our Zinc Industry has created a valuable resource of industry knowledge and proficiency within IZA. As we have seen, this is critical to the near and long-term viability for our Industry. It is also paramount that we speak to the many stakeholder groups with one Industry voice. And IZA has done this in a cost efficient manner with cost reductions of 25% over the last two years, while still delivering on its mandate. I am extremely proud of the accomplishments of IZA and in closing would like to thank all of the IZA staff and our Member Company representatives for helping us deliver on our commitment to Making a Difference.
Andrew Michelmore Chairman INTERNATIONAL ZINC ASSOCIATION
Executive Director and CEO MMG LIMITED
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A SOUND CHOICE
l Brass is the generic term for a range of alloys made from copper and zinc. The strength,
malleability and acoustic properties of brass make it an excellent material for musical instruments. Superior antimicrobial properties and ease of machining has also led to the widespread use of brass for locks, gears, bearings, valves and decorative hardware. 7
ZINC OXIDE PUTS THE BOUNCE IN RUBBER
l Zinc dusts and powders are an indispensable raw material for a
multitude of everyday products including batteries, ceramics, cosmetics, electronics, glass, pharmaceuticals, plastics, rubber and paints.
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Executive Director’s Letter “Making a difference” is a challenging proposition and often difficult to measure. IZA is confident it has succeeded in this but it is also gratifying to hear third party, independent groups confirm this as well. For example, the Business Standard (September 8, 2014) stated; “the demand for high quality galvanized steel is set to rise globally following a successful campaign by the IZA”. The Wall St. Daily (July 31, 2014) noted; “Surprising, zinc fertilizer market growing rapidly and having an impact...50% increase in zinc fertilizer use over the past few years in China and India.” IZA’s Executive Committee suggested that IZA focus on a smaller number of higher impact programs. The Galvanized Autobody Partnership, the Zinc Nutrient Initiative and the Continuous Galvanized Rebar program illustrate the value of this approach. 2014 witnessed a serious challenge to galvanized steel in automotive body manufacture with Ford’s announcement that its highestselling vehicle, the F150 pickup, would be refitted with an aluminum body in 2015. Automotive body panels consume 600,000 tonnes of zinc each year and IZAs Galvanized Autobody Partnership (GAP) is on the front line defending this market. In July, GAP had a major breakthrough by identifying a path forward for galvanizing the new 3rd generation of advanced high strength steels. These 3rd generation steels will enable steel auto bodies to meet stringent new emission and fuel economy standards at a much lower cost than aluminum. IZA is also active in promoting the use of automotive galvanized steel in China and India, where very little corrosion protection is used. Bringing these vehicles to Western world corrosion standards would increase the market for zinc by as much as 500,000 tpy. IZA has recently signed a MoU with the World Steel Association to partner in educating and promoting the value of galvanized steel to the Chinese auto industry. IZA’s Zinc Nutrient Initiative has helped grow a new and significant zinc market in fertilizers. Market uptake surpassed 100,000 tpy of zinc in 2014 and key policy groundwork made this year in China and India is forecast to more than double this market to 230,000 tonnes in 2015 – a tremendous success by any measure. Efforts on continuously galvanized rebar (CGR) are also paying dividends. A second CGR line opened in Dubai and discussions are underway for one or more lines in North America and India. In short, IZA has facilitated a process whereby others are willing to invest upwards of $1 million to produce a new zinc coated product. ASTM has introduced a new specification for CGR and there has been strong interest in the technology from federal, provincial and state transportation agencies. Although there are highlights from many parts of the world, India deserves special mention. First, India hosted a successful Zinc College which attracted 75 students and instructors. In market development, IZA helped organize the first International Galvanizing Conference in India, attracting over 250 attendees and sponsors. IZA was instrumental in establishing a new Bureau of India Standard (BIS) requiring a minimum coating of 150 g/m2, which has the potential of creating a new market of 100,000 tpy. As well, Common Fund for Commodity-funded projects in general galvanizing and die casting were completed – both programs helped raise the quality standard of end use products, a key to long term growth. IZA is achieving these impacts through the support of the Members but also from third party sources. In 2014, zinc consuming companies, third party contributors, conferences and other revenue contributed 44% of the total IZA funds under management. Just under $2 million of third party funding was contributed to IZA’s TMD projects. Not only is this funding important but it facilitates technology transfer and market acceptance.
Stephen Wilkinson Executive Director INTERNATIONAL ZINC ASSOCIATION
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Environment & Sustainable Development IZA’s ESD activities provide a platform for the zinc industry to participate in regulatory discussions providing a conduit for industry concerns and ideas to be heard by the regulatory community, ultimately resulting in a more balanced approach to environmental regulations. It also connotes corporate responsibility and serves to build public trust through the industry’s active participation in environmental, sustainability and health stewardship programs. Regulatory
Sustainability
In 2014, IZA again produced required information needed for regulatory agencies to base their decisions on sound science. Highlights include:
In 2014 IZA completed an update to the global average life cycle assessment (LCA) for special high-grade zinc. This latest update incorporates the most recent data from Member companies, and, more importantly, an expanded geographic range and percentage of global production. Results for the principle categories show a 20% or better reduction in impacts related to global warming, energy demand, and environmental emissions.
• IZA efforts on the International Maritime Organization (IMO) rules on the transportation and dumping of hazardous solid materials resulted in savings of $1-2 per tonne of shipped zinc concentrate. • IZA’s coordination of filing for compensation under the European Union CO2 Emission Trading Scheme (ETS) led to tens of millions of dollars in compensation to the zinc industry in Europe. • IZA played a pivotal role in persuading the EU Commission to not include zinc on the prioritization list of chemicals under the Water Framework Directive. Inclusion on this list would have major market implications. • IZA in its role as REACH Secretariat for Zinc, Cadmium and Indium has successfully met all required deadlines for compliance.
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IZA is updating international LCA databases with this new information and is incorporating these results into a new recycling and sustainability communications campaign.
l In addition to its beauty, zinc possesses a long lifespan
ZINC IS A HIGHLY SUSTAINABLE BUILDING RESOURCE
and requires minimal maintenance. Zinc is abundant and occurs naturally in the air, water and soil and is fully recyclable from construction scrap to end of use.
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KEEPING CHILDREN STRONG
l Diarrheal diseases are the second-leading cause of death of children under the age
of 5. The internationally recommended way to treat childhood diarrhea is with zinc and oral rehydration salts (ORS). Together, Zinc+ORS are proven to stop diarrhea, restore strength and even save lives.
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Health & Nutrition IZA has taken a global lead in advocating programs aimed at addressing zinc deficiency. In 2014, Zinc Saves Kids, IZA’s flagship initiative in support of UNICEF, had a major impact in Peru. Specifically: • Close to one million children aged 6-36 months were treated with 5 mg of zinc as part of a multiple micronutrient package to combat chronic malnutrition.
Additionally, a number of member companies have introduced zinc and health programs as part of their CSR efforts. The zinc industry is now contributing more than $3 million annually in India, Laos, Peru and several countries in Africa. The United Nation’s “Mining Compact for Child Health” has recognized the zinc industry for its contributions.
• The number of health centers incorporating zinc for diarrhea treatment almost tripled, leading to an average reduction of 25% in diarrhea episodes and 40% less in duration and severity. • The Government of Peru approved a national plan to reduce chronic malnutrition and anemia to 10% and 20% respectively by 2016 and allocated a multi-million dollar fund for a comprehensive health care and nutrition package including zinc. • The success of the program will be showcased across Latin America in 2015.
“I would like to express our gratitude for the valuable support of IZA during the year 2014, through the “Zinc Saves Kids” campaign. Since 2010, the alliance of UNICEF and IZA has contributed to significantly improve the nutritional status of children under five in Peru.” Paul Martin REPRESENTATIVE
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Communications Websites
Publications
IZA maintains a public information hub on the web in support of Zinc, IZA programs and Members. The flagship site zinc.org has been replicated and translated for the Chinese, Indian, Brazilian and Latin American markets. IZA also maintains a series of technical sites with specifications and engineering data on galvanizing, diecasting, health and agriculture.
Publications released by IZA in 2014 included: Zinc in the Environment: Understanding the Science, Hot-Dip Galvanizing in Mining, Continuous Galvanized Rebar – An Introduction as well as fact sheets on Zinc Reserves, Conflict Minerals and Zinc Recycling. IZA also publishes monthly newsletters highlighting current developments in each of the IZA program areas. IZA produced a variety of materials for display including posters, banners and electronic materials which highlight zinc’s sustainability attributes, illustrate specific zinc applications or collectively show the wide range of uses for zinc in industrial design and everyday products.
Conferences IZA organized a number of successful conferences, training courses and seminars in 2014. The 2014 International Zn and ZnO Conference, held in California, was attended by 378 persons marking the highest attendance in its 23-year history. Delegates came from 175 companies and 31 countries. A highly successful Zinc College was held in Udaipur, India in association with Hindustan Zinc with over 75 in attendance. Major galvanizing conferences were organized by IZA in India, China and Mexico with a focus on new technology and market growth opportunities. Numerous market development sessions were also conducted during the year.
Media Outreach IZA has built a diversified communications network of Government agencies, NGOs, and end user partners with shared interests in promoting the benefits and value of zinc. In addition to significantly extending media reach, these partners serve as a network to monitor and track zinc issues and allies in championing positive zinc messages. The association with “Zinc Saves Kids” in support of UNICEF continues to be a strong asset for IZA and the image of zinc.
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UNIQUELY MODERN
l Zinc’s phosphorescent properties have made it a key ingredient in TV screens and light
emitting diodes (LEDs). Zinc varistors are widely used in electrical systems for circuit protection and miniature heat sinks made of zinc help cool sensitive electronic components in laptops, tablets and smartphones.
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FOOD SECURITY
l One-half the world’s agricultural soils are estimated to be deficient in zinc, leading to decreased crop
production and nutritional value. As part of a balanced soil nutrient approach, adding zinc to soils can increase crop production and nutritional status (i.e. higher zinc levels) of those crops for consumption.
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Zinc Nutrient Initiative The Zinc Nutrient Initiative’s (ZNI) objective is to increase the fertilizer market for zinc by addressing deficiency issues in soils and crops, thus improving food quality and security as well as human health. In 2014, the program continued to build on the success of recent years with a number of key deliverables, including: • Achieving annual market consumption of 120,000 tpy zinc through policy interventions in China and India.
• Increasing support of ZNI by expanding affiliate membership to 30 leading fertilizer companies who now contribute one-third of the total funding.
• Implementing new efforts with policies which could more than double the market growth to 231,000 tpy zinc.
• With CFC funding support IZA also showed crop yield increases of more than 50% in Malawi. As well, uptake of zinc in the crops— for better nutrition and health was doubled.
• Helping to impact overall zinc demand and price according to articles in media outlets such as the Wall Street Daily.
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Technology & Market Development G A LVA N I Z E D A U T O B O D Y PA R T N E R S H I P ( G A P ) The automotive industry is under constant pressure to reduce vehicle emissions and increase fuel economy and the threat of substitution for zinc coated products is high as evidenced by Ford’s announced switch for body panels of their high volume F-150 truck series from galvanized steel to aluminum. IZA’s Galvanized Autobody Partnership (GAP) is a coalition of zinc, steel and auto companies aligned to protect and grow steel use in the auto sector through technical innovations in advanced high strength steels (AHSS) and ensuring these evolving steel grades can be galvanized. GAP highlights in 2014 include:
• IZA also launched a similar program in India to raise awareness of the benefits of galvanized steel with Indian automakers, which could add an estimated 150,000 tpy of zinc consumption. Since inception GAP has concluded 65 research projects allowing all new advanced high strengths steels (AHSS) to be galvanized thus maintaining 120,000 tpy of zinc that could have gone to other materials. The total market for galvanizing auto bodies and structures amounts to 600,000 tpy.
• A new 3-year phase of GAP was launched anchored by 19 global steel manufacturers and one global automotive producer. • A major breakthrough occurred with the identification of a path forward for galvanizing new 3rd generation AHSS steels. This development will enable automakers to produce steel-based vehicles that meet targets of increasing the corporate average fuel economy (CAFE) in the US from the current 29 miles per gallon to 54.5 mpg in 2025 and reducing CO2 emissions from 160g per kilometer today to a maximum of 95g by 2020 in the European Union.
Continuous Galvanized Rebar (CGR) The objective of IZA’s Continuous Galvanized Rebar (CGR) program is to commercialize the technology for CGR used in concrete infrastructure projects. The process is similar to continuous galvanizing sheet steel with the bars passing through a zinc bath containing a small amount of aluminum. The resulting coating is almost pure zinc with excellent adherence to the steel. CGR exhibits superior corrosion resistance in concrete and can be bent on-site to tight radii without cracking or flaking of the coating; saving significant time and costs. CGR milestones in 2014 include:
• IZA entered into a Memorandum of Understanding with the World Steel Association to coordinate efforts to promote greater use of galvanized steel by Chinese automakers. Bringing Chinese automakers up to standards of galvanizing 90% of the vehicle body and exposed panels would add an estimated 350,000 tpy of zinc consumption.
• Following a successful pilot project in China, a CGR line was launched in Dubai and galvanizers in North America and India have also expressed investment plans.
(Continued on page 21)
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BEAUTY THAT’S MORE THAN SKIN DEEP
l Zinc castings can be made to look like solid gold, weathered brass, stainless
steel and even leather. Because of zinc’s density, cast zinc parts provide a feel of substance and durability that simply cannot be matched by plastic and other light-weight metal components. For countless decorative and functional applications no other material and process can match the properties and economics of zinc diecasting. 19
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For over a century, zinc has enhanced the longevity and performance of steel. When left unprotected, steel will corrode in almost any environment. Zinc coatings protect steel by providing a physical barrier as well as cathodic protection for the underlying steel. No other coatings provide a more effective and economical way of protecting steel against corrosion. ZINC PROTECTS
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Technology & Market Development • A duplex coating process for CGR was developed and trademarked as BlueBarTM
calls for a US $1 trillion investment in infrastructure, which, along with the growing intensity of steel use and construction activities, will drive zinc demand in the near term. IZA’s market development activities have focused on standards development and awareness and communication campaigns for galvanized sheet in automotive and construction, as well as general galvanized long products. 2014 highlights include:
• IZA developed a new ASTM standard for CGR. A subcommittee WK 46112 “New specification for zinc coated (continuous hot dip galvanized) steel bars for concrete reinforcement” was established to prepare this standard.
• The Bureau of Indian Standards approved the I-277 Standard for galvanized sheet steel which specifies a minimum coating weight of 150 g/m2 on galvanized sheet steel. It is expected that this will lead to an increase of 80,000 tpy of zinc.
• Marketing collateral highlighting the CGR process and its advantages was developed and used to promote CGR to material engineers and government representatives responsible for infrastructure and transportation projects.
• With the Indian Sheet Steel Building Group that was launched in 2013 IZA offers a technical platform that provides expert guidance and develops and promotes industry standards to sheet steel manufacturers, fabricators of building products and engineering professionals.
There is strong interest in CGR because it can be produced at a significant cost savings compared to other corrosion resistant rebar systems. CGR represents a new zinc market opportunity in excess of 200,000 tonnes.
• In July, IZA organized a highly successful galvanizing conference bringing together more than 250 attendees including representatives of railway, airport and road transportation authorities.
REGIONAL PROGRAMS India India is the second fastest growing economy in the world behind China and, with zinc consumption of only 0.5 kg per capita, the growth opportunity for zinc is enormous. IZA’s market development work in India is focused mainly on the galvanizing sector as it accounts for 71% of the estimated 628,000 MT of zinc consumption. India’s 12th Five Year Plan (2012–17)
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• IZA met with a number of automakers to promote the use of galvanizing for corrosion protection and a new Indian standard for coated steel sheets for automotive bodies is under development. IZA’s efforts have already resulted in 150,000 new tonnes of zinc consumption and additional efforts to raise this to 750,000 tonnes have been identified. (Continued on page 22)
Technology & Market Development IZA’s 2nd General Galvanizing Conference was held in Xuzhou and attracted 380 participants. The goal of this conference and activities like the joint IZA/CFC galvanizing plant upliftment program are to improve product quality – a key to long-term market growth in China.
China IZA’s efforts in China continue to focus on promoting galvanizing in the infrastructure construction and automotive sectors. Highlights in 2014 include: Advocacy efforts with the Ministry of Railways resulted in the specification of galvanized steel for China’s national railway expansion, which continues to pay dividends. An estimated 200,000 MT of zinc have been realized this year with the entire project estimated to consume 1 million MT when complete.
Latin America In conjunction with the Mexican General Galvanizers Association, IZA organized the fourth Latin American General Galvanizing Conference (Latingalva 2014) in Mexico in November. The conference provided an overview of the global market for general galvanizing and highlighted key projects in Brazil, Chile and Mexico and was attended by over 220 delegates and 20 exhibitors.
IZA and the World Steel Association signed a MoU combining synergies of the GAP and WorldAutoSteel programs to expand the use of galvanized sheet steel in China.
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From electrical transmission towers to near and offshore wind turbines, zinc plays an essential role in protecting the world’s power grid from corrosion and maintenance downtime. Zinc is also being tapped for the next generation of high efficiency low-cost solar panels and is a key ingredient in some of the most efficient and high-energy batteries. POWERING THE FUTURE
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International Zinc Association Avenue de Tervueren 168/Box 4 B-1150 Brussels, Belgium tel:
+32.2.776.00.70 +32.2.776.00.89 email: contact@zinc.org internet: www.zinc.org fax: