Borates are important in the modern economy. The minerals, named as such because they contain the element boron, are most well known for their use in the touch screen glass that is the key to most smartphones and tablets. Because of the demand for the final products that include borates, they have become a world commodity and borate producers such as Rio Tinto Minerals are becoming major players on the world stage.
Bob Katsiouleris, Chief Commercial Officer of Rio Tinto Minerals, discussed the current economic situation around Europe as it pertains to borates. “[The] situation in Greece is significantly worse than what you see on TV,” he said. “The Southern Mediterranean today is probably one of the most economically depressed portions of the world.” He explained that currently Greece is at 21.8% unemployment, up from 13.6% in January of 2010. For those under thirty years of age, the situation is much worse, with unemployment reaching about 50%. In Spain, the situation is even more dire. The unemployment rate is already at 22.8% and Katsiouleris described their economy as being “in a complete collapse”.
This proves to be a difficult situation for Katsiouleris’ Rio Tinto because many of Rio Tinto’s clients come from the Southern Mediterranean. Specifically, Spain and Portugal use borates in the production of tiles to give them a smooth, glossy finish. With those two economies in as much distress as they are now, the demand for borates has dropped, hurting Rio Tinto. Yet, even with these economic challenges, Katsiouleris said that a few tile companies were able to overcome this European economic problem through exports. These companies were able to find a large market for tile and by exporting are able to stay afloat.
Katsiouleris then spoke about the issue of currency exchange rates. Rio Tinto’s biggest competitor is a Turkish government-owned minerals company where the recent devaluation of Turkey’s Lira has made it more difficult for Rio Tinto to compete in Europe since it costs the Turkish company fewer Euros to produce the same amount of product.
Turning to the future, Katsiouleris said, “Minerals, especially in the U.S. economy will have a very big role to play.” He spoke of the population of India, “65% of the affluent Middle Class is under forty, what do they want? Glass.” This glass contains borates which will drive up the demand for more of the minerals, which will help out his company Rio Tinto.
Due to this demand, Katsiouleris recommended that people paint soon because, “The price of paint [which contains borates] is going to quadruple in the next year.”