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By Tom Vulcan

What do red traffic lights, anti-dandruff hair shampoos and brown-tinted photographs have in common? The answer: selenium.

The addition of selenium gives the glass in traffic lights that vibrant red. Selenium also puts the ‘Sel' in Selsun Blue shampoo (in the same way that bismuth puts the ‘Bis' in Pepto-Bismol). And, finally, selenium is used to tone photographic prints to give them that muted, antique sepia hue.

But, as we'll see, selenium has some very much more important—and interesting—uses than just these three.

What Is Selenium?

Selenium is a red-gray, lustrous metalloid (or semi-metal) similar to tellurium; hence its name, which comes from the Greek word selene for "moon" (tellurium comes from the Greek tellus for "earth"). The metal was discovered in 1817 (35 years after tellurium) by the Swedish chemistry professors J. J. Berzelius and J G Gahn.

Selene

Source: Selenium-Tellurium Development Association

While not as scarce as tellurium (which is the 75th-most abundant element on Earth), selenium, in 69th place, is still quite rare. Estimates of its overall abundance in the Earth's crust range from 0.03-0.08 ppm (parts per million). And its oceanic abundance has been estimated at around 0.4-5 ppb (parts per billion).

Selenium is never found as pure metal in nature; nor can you find any selenium ores or ore deposits. However, the metal is present in minor quantities in many different minerals; in particular, sulfides of copper, iron and lead.

Whence The Selenium?

All selenium is produced as a byproduct of the mining and processing of a couple of base metals. Some 90 percent comes from copper ores, while lead ores make up most of the remaining 10 percent. (A negligible amount is also derived from the processing of nickel.)

Selenium and tellurium, however, are usually just two of such byproducts from copper and lead ores, with gold and silver (and, sometimes, palladium and platinum) being usually equally, if not more, important byproducts. That's why you'll find selenium quite often produced by the precious metals operations of both refineries and mining concerns—like those at Umicore and Southern Copper Corporation, for example.

Selenium produced as a byproduct of copper refining is extracted from the anode or tankhouse slimes (where it can be present in concentrations anywhere from 5 to 25 percent by weight) produced in the refining process. (Anode slime—as wet and viscid as the name suggests—is the gunk that falls to the bottom of an electrolytic cell as the impure copper anodes dissolve in the refining process, as well as that left sticking to the remains of the anodes post-processing.)

The extraction process is, however, a complex one, requiring a number of different treatments.

Flow Process of the CCR Refinery

Source: Xstrata/Falconbridge

Exact figures for selenium production are not the easiest numbers to come by. Miners and refiners are either extraordinarily coy about revealing precise production figures, or such figures are not considered that important and therefore are not easily available. What's more, as the USGS notes about information covering U.S. selenium production, some figures have been "withheld to avoid disclosing company proprietary data."

Further issues complicate the calculation of production numbers. Although most selenium production is geographically concentrated in those countries where copper itself is refined, in a number of cases, spent anodes and anode slimes are exported, and selenium and other impurities are extracted elsewhere. For example, in the U.S., according to the U.S. Geological Survey's [USGS] latest yearly summary on selenium: "One copper refiner exported semirefined selenium toll-refining in Asia, and another refiner generated selenium-containing slimes, which were exported for processing."

In addition, some copper ores contain more selenium than others. For example, while much of the copper ore mined in South America has a very low selenium concentration, the copper ore mined from porphyry deposits in the Western U.S. is replete with the metal.

Given these caveats, and the fact that "Australia, China, Kazakhstan, and the United kingdom are known to produce refined selenium, but output is not reported, and information is inadequate for formulation of reliable production estimates," the USGS estimated world refinery production in 2009 (excluding that in the US) to have been on the order of some 1,500 tonnes, down from around 1,510 tonnes in 2008.

Selenium Refinery Production 2008-2009 (Tonnes)

Note: "Other Countries" includes Serbia and Germany

Source: USGS

Absent any disclosure by the USGS, best estimates for North America (including the U.S.) put production at around the 600 tonnes mark, with the U.S. as one of the midranking producing countries of selenium.

When it comes to selenium refining, historically, Japan has been the world's largest refiner for a number of years, followed by Belgium and Canada.

Selenium Refinery Production 2004 - 2009 Tonnes)

Source: USGS

Uses Of Selenium

While estimates within the industry vary considerably as to the proportional breakdown of selenium's use in the two most important applications of the metal—glass and metallurgy—the actual range of its uses is not in dispute.

Selenium is consumed in:

  • Glass
  • Metallurgical applications
  • Agriculture (animal feed and fertilizer)
  • Pigments
  • Electronics
  • Batteries
  • Chemicals

But selenium consumption in glass has decreased significantly recently (20 percent between 2008 and 2009), and the Selenium-Tellurium Development Association (STDA) now estimates that glass and metallurgical applications account for some 25 percent and 35 percent, respectively, of total selenium consumption. Others, however, put the figure for glass much higher, around 40 percent; even 50 percent in the U.S. (although they agree on a figure of 35 percent for metallurgical consumption). Whatever the figures may actually be, though, these two applications remain the most important uses of selenium.

Selenium - End Uses

Source: STDA

Somewhat like the effects drink has on man, as described by the porter in Shakespeare's "Macbeth" - "it makes him, and it mars him; it sets/him on, and it takes him off ... ," selenium is an element of contraries: It both oxidizes and deoxidizes; it can both add and remove color; and it can both conduct electricity and be nonconductive. In application, it is used for all these characteristics.

Glass

Selenium (anywhere between 10g and 30g per tonne) is used to remove the green tint, caused by iron impurities, from the glass used to make containers, bottles, etc. And, in somewhat larger quantities, around 1kg per tonne, it is used to decolorize the heat-absorbent glass used in automobile and office windows.

The metalloid is also used to add color (particularly red) both to glass and to vitreous glazes.

Metallurgical Applications

The addition of selenium to certain steels and copper-based metals can significantly improve their machinability. Plus, in steels, selenium can act both as a deoxidizer and grain refiner.

Batteries

Once again employed as a grain refiner, selenium can be used in the cell connectors and grids of certain lead-acid batteries.

Pigments

Producing colors anywhere from yellow to maroon, selenium pigments (nearly always in conjunction with cadmium) are used in ceramics, glazes, paints and plastics. According to the USGS, because these pigments are expensive, "... they are reserved for use in plastics processed at temperatures of up to 400° C and for plastic products used in high-temperature environments (up to 500° C) when it is important to avoid deterioration of the color, especially if the color is part of a visual safety code, such as might be used for cable coverings, steam line coverings, and other products."

Chemicals

Although it can be used as a deoxidizer in steels, selenium and its compounds are also used as oxidizing agents and catalysts for a number of organic chemical processes, including dehydrogenation, hydrogenation, oxidation (of course), isomerization and polymerization.

In particular, selenium is used to oxidize acetaldehyde, alkyl aromatics, ketones and olefins.

Agriculture

Take too much selenium, and you'll be poisoned. However, too little and you'll come down with either Keshan or Kaschin-Beck disease. (Again, we see selenium working in opposite ways.) But in moderation, selenium has been recognized since 1957 as an essential trace element, not only for humans, but also for all animal species.

As far back as 1265, Marco Polo heard word of a plant that, if eaten by horses, would make them sick (including their hooves dropping off): The plant had such a concentration of selenium in it as to be toxic. More recently, a number of mining operations have had to address the issue of elevated levels of selenium being found in groundwater.

Since selenium is a vital micronutrient, fertilizers containing the element are used in areas of the world where there is a deficiency in the soil, such as China, Denmark, Finland, New Zealand and parts of the Eastern and Northwestern United States. Selenium is also often added to animal feed, both to make up for any existing deficiencies and to act as a prophylactic against various diseases.

And then, of course, on a more mundane level, selenium disulfide is just great at getting rid of dandruff!

Electronics

It is in the realm of electronics, though, that selenium continues to have some of its most interesting uses—not the least because this unusual metalloid is both photoconductive (as the intensity of its exposure to light increases, its conductivity increases) and photovoltaic (it converts light into electricity).

So on the one hand, selenium's photoconductivity makes it useful in high-speed printers (when used in compounds with arsenic). And, on the other hand, because of its photovoltaic qualities, selenium is ideal for new generations of thin film voltaics, typically in compounds together with copper, indium and gallium—the so-called CIGS solar cells—or together with just copper and indium in "CIS" solar cells.

While the jury remains out as to who will eventually win the solar cell "race," both CIGS and CIS solar cells do have one particular advantage over rivals such as cadmium telluride cells—they don't contain the same amount of toxic cadmium.

In the past, two significant uses of selenium were in photocopiers (from which, for a time, and until there were no more drums left, a deal of secondary selenium was recycled) and rectifiers. Except in some highly specialized rectifiers, however, the use of selenium in both has now all but ceased.

The Selenium Market

Most selenium is bought and sold on the basis of long-term contracts, and as can be seen from the chart of the price for free market selenium, the metal has had a fairly wild ride over the past five to six years. Like a number of the other minor metals, it has also seen (and continues to see) a deal of speculation. (As a relatively small market in terms of volume, selenium's price can easily be moved by not very large purchases or sales.)

Selenium Pricing

Selenium Pricing

Source: http://www.minormetals.com/

The wild rise, and subsequent fall, in the metal's price in 2005 is due in part to the Chinese double bidding in the market at the time, which caused no little consternation amongst traders in selenium.

Currently, the metal trades around an average somewhat north of $30 per lb. Back some 12 years ago or so, as recorded in the Canadian Minerals Yearbook 2008, the average annual price for the metal was only some US$2.274 per lb, an indication of just how much the price has risen over those years.

China remains the world's largest consumer of selenium, using it not only for agricultural and glassmaking purposes, but also for the production of the manganese and ferromanganese used in steel—the country's greatest use of the metal. In fact, major quantities of the selenium produced in both Japan and South Korea are shipped to China.

Quite logically, some of the largest selenium producers are also some of the largest copper producers, but discovering reliable production figures both for them and other selenium producers is extremely difficult.

Estimates from within the industry paint the following rough picture of the major producers:

  • The three largest producers (each producing probably more than 250 tonnes of selenium per annum) are (in order): Aurubis (Frankfurt: NDA)—particularly in the guise of Retorte, in Germany; Pan Pacific Copper (owned by Nippon Mining & Metals: 66 percent, and Mitsui Mining & Smelting: 34 percent) in Japan; and Xstrata (LSE: XTA) out of Norway and the old Noranda CCR facility, in Montreal-East, Quebec, Canada.
  • In the U.S., since ASARCO went bankrupt, any figures for its current selenium production have been increasingly difficult to find. While in 1995 the company produced some 150 tonnes, now its production is thought to be around 2 tonnes per month, or 20 to 40 tonnes per annum.
  • Also in the U.S., Kennecott (now part of Rio Tinto) probably produces around 170 tonnes a year, while Phelps Dodge (PD) (part of Freeport McMoRan Copper & Gold) (NYSE:FCX), which produced some 200 tonnes in 1998, doesn't now produce a kilo, rather selling its selenium-producing slimes to others.
  • Other Japanese producers, Sumitomo Metal Mining and Mitsubishi Materials account for around 200 tonnes and 100 tonnes a year, respectively.
  • In the erstwhile Soviet Union, Kazakhmys (LSE: KAZ) in Kazakhstan, and Uralelectromed in Russia, each produces around 100 tonnes per annum. Norilsk Nickel (LON: MNOD) produces some selenium from its nickel operations.
  • In China, a noted major producer is Jiangxi Copper (HSKE: 0358.HK), with output of some 100 tonnes per annum.
  • In Europe, Sweden's New Boliden (STO: BOL) produces around 100 tonnes annum, and while Umicore (EBR: UMI) describes itself as having a selenium production capacity of some 600 tonnes (out of its precious metals refining division at Hoboken, Belgium), it probably only actually produces somewhere between 100 and 200 tonnes per annum.
  • In Mexico and South America, Southern Copper Corporation (NYSE: PCU) probably produces around 60 tonnes per annum. (In 2008 it produced some 44.2 tonnes out of its Ilo facility in Peru and 47.3 tonnes out of its La Caridad facility in Mexico.) Codelco, the Chilean state copper mining concern, is also produces moderate amounts of the metal.
  • India's Sterlite (NYSE: SLT) is also a producer of moderate amounts of selenium.

Three other companies, in particular, all buy their raw materials from copper refineries and subsequently sell selenium, either refined, recycled or upgraded: Canada's 5N Plus (Bloomberg Ticker — TSE: VNP); Chile's Cormiquim; and Pacific Rare Specialty Metals & Chemicals, a subsidiary of II-VI (NASDAQ: IIVI) in the Philippines. But, to avoid double counting, they've not been included among those companies listed before them.

Opportunities In Selenium

Since selenium is, by its nature, a byproduct, there are no totally "pure play" investment opportunities in the metal—except, of course, in the physical metal itself. (And whatever that "play" may be, not only will it always be closely linked with primary copper production, but it will also always be attractive to, and open to influence by, speculators.)

On the one hand, when larger mining concerns produce selenium, they do so alongside the likes of copper (predominantly), lead and nickel—whether refined "in-house" or sent off to the toll-refiner.

On the other hand, when such concerns sell off their selenium-bearing slimes, the refiners of those slimes are then going to produce not just selenium from them, but also tellurium (with which selenium is usually found), and any other metals (especially precious ones) worth extracting.

What's perhaps more interesting to those looking for investment opportunities are some of selenium's potential applications—both current and in the future. Not the least because, over the past several years anyway, there has been a degree of replacement of selenium by other materials in a number of its more established uses—for example, in glass.

Although any success CIGS and CIS solar cells enjoy may not have any really great effect on the selenium market itself, it is probably advisable to keep a watching brief on what's going on in this sector. In the same way, CO2 lasers and thermoelectric coolers using selenium—both for military and industrial uses—will be worth keeping an eye on.

Other areas involving metal may also turn out to be of interest. Consider recycling: In the past, when there were lots of old photocopier drums around, the STDA reckoned that some 15 percent of refined selenium came from secondary sources. Now the figure is probably closer to 2 to 5 percent. The efficient recycling of the metal from other sources may, at some time in the future, offer some interesting opportunities, as, too, will be the actions of mineral exploration companies currently hunting down tellurium: Will they capture the accompanying selenium they may find?

Afterword

Finally, as a caveat (or not) to any interest in the metal, currently probably only around 50 percent of the selenium dug out of the ground is actually extracted and refined. That leaves a lot of room for further application in the future.

Author's Disclosure: none

Source: Selenium: Contrary Stuff