Given the recent increased presence of mining companies in Kenya, prospectors are beginning to find new and potentially profitable deposits where no one knew they existed. From oil to gold to natural gases, prospectors have been rushing to cash in on all the action.

It’s no surprise when Cortec Mining Kenya Limited, a local exploration firm, makes plans to start production on a mining project in South Eastern Kenya. Earlier this week, the firm announced plans to set up a processing and testing plant within the next two years. What’s more, Cortec intends to invest up to USD 200 million (KES 17 billion) to extend an ongoing drilling project in Mombasa.

The mineral was first discovered in 1774 and was initially named Columbite. It wasn’t until the mid 1800s, when scientists verified its unique properties, that the mineral attained the name Niobium.

It is a rare metal, which, according to the Center for Sustainable Minerals Development, has a Relative Supply Risk Index of 7.6 (Tungsten ranks the highest on their list with a Risk Index of 9.5 while Copper is the lowest at 4.3).

This comes a few months after Pacific Wildcat, a Canadian-based mining company, discovered Niobium deposits at the Milima Hills site near Mombasa.

So why, exactly, does Niobium trump oil?

High Demand

The 2012 Mineral Commodity Summaries Report states that the world’s niobium reserves stood at an estimated 3 million metric tons in 2011. Global Voices estimates an annual demand of 200 million pounds or 90,718 metric tons per year, growing at a rate of between 5% and 7% annually.

On the other hand, BP reports that petroleum reserves stood at 1.65 trillion barrels of oil (225 billion metric tons) in 2011 with an annual demand of 219 million barrels or 30 million metric tons (7.33 barrels of crude oil is equivalent to 1 metric ton).

I Am Gold, an international mining company and World Gold Council member with operations in 3 continents, reports that demand for Niobium has seen an annual increase of about 10% over the past decade.

Minerals UK has a Risk List for the world’s mineral deposits and notes that the Brazil currently accounts for 97% of its global production.

Numerous Uses

Niobium is mainly used as an alloying agent for jewelry, a catalyst for various chemical processes and for the manufacture of super-alloys and super-conductive magnets. It is also used to reinforce steel used in automobiles, buildings and oil pipelines.

Principle markets for Niobium include the automobile industry, the petro-chemical sector, heavy engineering, power plants, aircraft engines, particle accelerators and magnetic resonance imaging (MRI machines)

Annual global revenue from Niobium was USD 2.8 billion (KES 238. 3 billion) in 2011 while the Organisation of the Petroleum Exporting Countries (OPEC) notes that net export revenues for oil stood at about USD 1.03 trillion (KES 87.7 trillion).

Mining Technology reports that Niobium catalysts can be used to convert palm oil into bio-diesel.

According to a recent statement from The Nation (Malawi), niobium exports could earn Malawi up to USD 100 million (KES 8.51 billion) per annum in export revenue. This is based on the fact that the country plans to produce 3000 metric tons a year.

From a more local perspective, Cortec intends to produce between 2900 and 3600 metric tons of Niobium every year once they reach full capacity. The firm intends to dig deeper going as far down as 2700 meters.

Meanwhile, Tullow Oil PLC announced that it had found 20 meters of net oil per day in the Ngamia 1 well a few months ago. The company estimates that Kenya has about 2 billion barrels worth of oil deposits (273 million Metric Tons).

Below is a comparative analysis of the two products:

*When Niobium was selling at USD 28 (KES 2400) in the global market.