United States Adds Zinc and Nickel to Critical Minerals List

MONTREAL, Nov. 30, 2021 (GLOBE NEWSWIRE) -- Osisko Metals Incorporated (the "Company" or "Osisko Metals") (TSX-V: OM; OTCQX: OMZNF; FRANKFURT: 0B51) is pleased to announce that the United States now considers zinc (and nickel) as critical minerals. The US Geological Survey (USGS), in a recent report, is proposing both metals be included in the redrafted critical minerals list, as a result of re-evaluation of global supply-chain security. This was drafted as zinc inventories decline and spot prices rise in a context where the US and several other nations, including the European Union, announce major infrastructure investment plans that will require zinc for galvanization of steel components.

Nickel and zinc are the only two new additions to the US Critical Minerals List as refined zinc metal imports were relatively high at 710,000 tonnes in 2020, representing 83% of domestic consumption, according to the USGS. Global supply chain trends make this problematic. “For zinc, the global concentration of mine and smelter production has notably increased during the past few decades,” the USGS said, adding that “this change has been driven mainly by increased production in China”. As more supply is concentrated in one country, the potential risk factor increases, particularly if that country is designated a mineral competitor, as is the case with China.

Zinc is an integral component of sustainable infrastructure spending through galvanization (i.e. corrosion resistance) of steel parts, which accounts for over 60% of zinc demand. With higher environmental and stringent sustainability criteria, average zinc usage is expected to increase across the construction, infrastructure and transport industries.

Current inventory levels remain extremely low and have dropped by more than 50% over the last 5 years. Further exacerbating the situation, North American supply production is expected to decline by over 35% in the next three years due to mine closures and falling production in older mines highlighting the placement of zinc as a critical metal. There are very few zinc development projects in the pipeline to meet production shortfalls this decade.

Lead is more interestingly poised on the USGS supply-risk table. LME inventories have dropped 75% in the last five years, again due to a growing concentration of global mining and smelting capacity in China. The USGS is ahead in analyzing global supply patterns and the resulting potential threats to critical minerals availability compared to the European Union.