Measuring Competition for Valuable Minerals
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
Everybody loves a little competition.
It levels the playing field and ensures prices and products are kept affordable and available. But how do you measure and track the competitiveness of specific sectors?
The Herfindahl-Hirschman Index (HHI) is a commonly accepted measurement of market concentration, and in today’s case, we use it to show which mineral sectors have healthy competition between countries, as well as the sectors that are more monopolistic.
What is the Herfindahl-Hirschman Index?
The HHI is calculated by squaring the market share of each competitor and then summing up the resulting numbers. It can range from zero to 10,000.
The closer a market is to a monopoly, the higher the market’s concentration, and the lower its competition. If there were only one company in an industry, that company would have a 100% share of the market, and the HHI would equal 10,000, demonstrating a monopoly.
Conversely, if there were thousands of firms competing, the HHI would be near zero, indicating almost perfect competition.
- HHI below 1,500: a competitive marketplace
- HHI between 1,500 – 2,500: a moderately concentrated marketplace
- HHI of 2,500 or greater: a highly concentrated marketplace
Interestingly, the same technique is also used by the U.S. Department of Justice to look at market competition and potential anti-trust violators, as well.
Global Metal Production
Today’s chart uses data from the World Mining Congress to look at the competition for global minerals between countries. The HHI scores show the minerals most and least exposed to competition, while uncovering opportunities for countries looking to bolster their own mineral production.
Here are 33 minerals ranked, going from highest score (most monopolistic) to lowest (least monopolistic):
|Rank||Mineral||HHI Score||Type of Mineral|
|#1||Niobium (Nb2O5)||8,413||Iron and Ferro-Alloy Metals|
|#2||REE (Rare Earth Elements)||7,219||Non-Ferrous Metals|
|#3||Oil Sands||6,871||Mineral Fuels|
|#4||Tungsten (W)||6,828||Iron and Ferro-Alloy Metals|
|#5||Platinum (Pt)||5,383||Precious Metals|
|#8||Vanadium (V)||3,573||Iron and Ferro-Alloy Metals|
|#9||Coking Coal||3,423||Mineral Fuels|
|#10||Cobalt (Co)||3,184||Iron and Ferro-Alloy Metals|
|#11||Palladium (Pd)||3,163||Precious Metals|
|#12||Aluminum (Al)||3,078||Non-Ferrous Metals|
|#13||Chromium (Cr2O3)||2,942||Iron and Ferro-Alloy Metals|
|#14||Molybdenum (Mo)||2,812||Iron and Ferro-Alloy Metals|
|#15||Boron (B)||2,749||Industrial Minerals|
|#16||Lithium (Li2O)||2,749||Non-Ferrous Metals|
|#17||Steam Coal||2,639||Mineral Fuels|
|#18||Lead (Pb)||2,505||Non-Ferrous Metals|
|#19||Uranium (U308)||2,233||Mineral Fuels|
|#20||Tin (Sn)||2,036||Non-Ferrous Metals|
|#21||Iron (Fe)||2,015||Iron and Ferro-Alloy Metals|
|#23||Zinc (Zn)||1,687||Non-Ferrous Metals|
|#24||Manganese (Mn)||1,627||Iron and Ferro-Alloy Metals|
|#26||Copper (Cu)||1,136||Non-Ferrous Metals|
|#27||Titanium (TIO2)||1,120||Iron and Ferro-Alloy Metals|
|#28||Silver (Ag)||1,015||Precious Metals|
|#29||Salt (NaCl)||982||Industrial Minerals|
|#30||Nickel (Ni)||949||Iron and Ferro-Alloy Metals|
|#31||Natural Gas||884||Mineral Fuels|
|#33||Gold (Au)||557||Precious Metals|
The data here makes it clear that mineral production is not uniformly distributed throughout the world, giving some countries huge advantages while revealing potential supply problems down the road.
Renewables in the Spotlight
While commodities like gold and oil have robust levels of competition around the world, the renewable energy industry relies on more obscure raw materials to make solar, wind, and EVs work.
Rare earth elements (REE) rank #2 on the list with a HHI score of 7,219, while battery minerals such as graphite (#6), vanadium (#8), cobalt (#10), and lithium (#16) also appear high on the list as well.
According to a recent study, the production of rare earth elements is an area of particular concern. Used in everything from electric motors to wind turbines, rare earth demand will need to increase by twelve times by 2050 to reach emissions targets set by the Paris Agreement.
The only problem is that China currently controls 84% of global production, which increases the odds of bottlenecks and scarcity as demand rises. This ultimately creates an interesting scenario, where a sustainable future will be at the mercy of a few a producing nations.
Visualizing the Scale of Global Fossil Fuel Production
How much oil, coal, and natural gas do we extract each year? See the scale of annual fossil fuel production in perspective.
The Scale of Global Fossil Fuel Production
Fossil fuels have been our predominant source of energy for over a century, and the world still extracts and consumes a colossal amount of coal, oil, and gas every year.
This infographic visualizes the volume of global fossil fuel production in 2021 using data from BP’s Statistical Review of World Energy.
The Facts on Fossil Fuels
In 2021, the world produced around 8 billion tonnes of coal, 4 billion tonnes of oil, and over 4 trillion cubic meters of natural gas.
Most of the coal is used to generate electricity for our homes and offices and has a key role in steel production. Similarly, natural gas is a large source of electricity and heat for industries and buildings. Oil is primarily used by the transportation sector, in addition to petrochemical manufacturing, heating, and other end uses.
Here’s a full breakdown of coal, oil, and gas production by country in 2021.
If all the coal produced in 2021 were arranged in a cube, it would measure 2,141 meters (2.1km) on each side—more than 2.5 times the height of the world’s tallest building.
China produced 50% or more than four billion tonnes of the world’s coal in 2021. It’s also the largest consumer of coal, accounting for 54% of coal consumption in 2021.
|Rank||Country||2021 Coal Production|
|% of Total|
|#7||🇿🇦 South Africa||234.5||3%|
India is both the second largest producer and consumer of coal. Meanwhile, Indonesia is the world’s largest coal exporter, followed by Australia.
In the West, U.S. coal production was down 47% as compared to 2011 levels, and the descent is likely to continue with the clean energy transition.
In 2021, the United States, Russia, and Saudi Arabia were the three largest crude oil producers, respectively.
|Rank||Country||2021 Oil Production |
|% of Total|
|#3||🇸🇦 Saudi Arabia||515.0||12%|
OPEC countries, including Saudi Arabia, made up the largest share of production at 35% or 1.5 billion tonnes of oil.
U.S. oil production has seen significant growth since 2010. In 2021, the U.S. extracted 711 million tonnes of oil, more than double the 333 million tonnes produced in 2010.
Natural Gas Production
The world produced 4,036 billion cubic meters of natural gas in 2021. The above graphic converts that into an equivalent of seven billion cubic meters of liquefied natural gas (LNG) to visualize it on the same scale as oil and gas.
Here are the top 10 producers of natural gas in 2021:
|Rank||Country||2021 Natural Gas Production |
|% of Total|
|#8||🇸🇦 Saudi Arabia||117.3||3%|
The U.S. was the largest producer, with Texas and Pennsylvania accounting for 47% of its gas production. The U.S. electric power and industrial sectors account for around one-third of domestic natural gas consumption.
Russia, the next-largest producer, was the biggest exporter of gas in 2021. It exported an estimated 210 billion cubic meters of natural gas via pipelines to Europe and China. Around 80% of Russian natural gas comes from operations in the Arctic region.
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