Unique Physical Properties
Lead is used in a wide variety of applications due to its density, malleability, lubricity, flexibility, electrical conductivity and low melting point. It has good resistance to corrosion, is readily alloyed with many other metals and casts easily.

Vital to Energy Storage
The production of lead-acid batteries, mainly for use in the automotive industry, currently accounts for approximately 72% of the global lead metal consumption. Despite the development of alternative energy cells, the lead-acid battery remains the only source of power supply that delivers the strong surge of portable energy needed to start an internal combustion engine. These batteries are also the energy source of choice for critical infrastructures, such as telephone networks and emergency lighting systems that require reliable back-up power.

Growing Need for Battery Power Driving Demand
The demand for lead has consistently grown over the years in line with the increased use of lead-acid batteries. Since 1994, demand has grown at a compound average annual rate of 3%. Higher consumption to support domestic industrialization in China, India and other developing economies, has been the major factor.

Higher Demand = Improved Market Pricing
Over the last three years, inventories have declined substantially as a result of increased demand and limited new mine supply. These tight market conditions have led to substantially improved pricing. For instance, the average price for a pound of lead increased over 165% from 2002 to US$0.55 in the first quarter of 2006.

Tight Market Conditions a Reality
Total Western-world inventories, including shipments, represent approximately 25 days of the current demand which is very low by historical standards. Inventories, built up when formalized recycling began and uses of lead metal changed, have since been totally absorbed.With demand consistently increasing and no realistic and economic substitute for lead-acid batteries available, the market fundamentals for this vital metal are very positive.

Ivernia believes that lead has strong long-term fundamentals and a bright outlook. It is used in a variety of applications that are experiencing surging demand with every indication that these market conditions will extend well into the future.

The conditions for continued growth are well established. During the past five years, demand from Asia and China for lead has increased annually by an average of approximately 10% and 30%, respectively. Higher disposable incomes in the region have triggered growing demand for end products that use lead, such as cars, critical infrastructure and telecommunications towers.

In China alone, light vehicle production is estimated to have soared 170% since 2000 and current estimates call for faster growth in the years ahead. Among the two billion people living in China and India today, only about 1% of the population currently owns a car. It is estimated that it will take the equivalent of the annual production of a new Magellan mine every year, just to satisfy the requirements for new vehicle production in China over the next decade.

While developing countries have been the main driver behind the increasing demand for lead, they are just part of a growing global economy in which the need for battery-powered energy continues to increase.

Ivernia’s emergence as a significant global lead producer comes at a time when the outlook for lead is the strongest it has been in many years.