tungsten prices continue to riseWith the price of ammonium paratungstate (APT ) up 58% so far this year and 69% over the past six months, tungsten remains one of 2005s hottest commodities.
Below are two recent articles – one from London’s Metal Bulletin discussing expectations for further APT price increases and a second by Charles Wyatt of Minesite.com analyzing the solid fundamentals and robust pricing in the tungsten market and for the other commodities to be produced from Tiberon’s 77.5%-owned Nui Phao deposit.
European APT sale bodes ill for US consumers
Pittsburgh 21 March 2005 14:27
US ammonium paratungstate (APT) prices appear poised to rise again this week after a sale at $155 per tonne unit was reported in Europe at the end of last week.
The market participant who made the sale expects to be able to book a sale in the USA early this week at around $160-165 per short ton unit.
“The reason I can make these sales is that no one has any material,” he said. “This thing still has legs.”
The last confirmed business in the USA was in a range of $140-145 per stu.
Copyright © Metal Bulletin PLC. All rights reserved.
------------------------------------------------------------------------------------------------
Feature Story Published by Minesite.com
This article can be accessed on the web at: https://www.minesite.com/storyFull.php?storySeq=643
Date: March 23, 2005
Tiberon Minerals Offers Exposure to Strong Price Rises In A Selection Of Metals And Minerals.
Mario Caron, president and CEO of Canadian listed Tiberon Minerals gave an excellent presentation at our 21st Minesite Mining Forum on 1 February, but it may have escaped the attention of some in his audience that tungsten has been one of the fastest moving metals, price-wise, this year. A combination of increasing world consumption and decreasing exports from China have powered a rise of 58 per cent this year alone and 65 per cent over the past six months. It puts the 16 per cent rise of nickel this year in the shade, as it does for the lesser performances from copper, aluminium and gold. All these metals, however, have end markets. The price of tungsten is simply a guide to what a consumer will pay for a purchase contract over varying periods. For Tiberon this cannot be bad as it is expected to announce an offtake agreement for its tungsten shortly.
Tiberon has a 77.5 per cent controlling interest in, and is operator of the Nui Phao tungsten-fluorspar deposit in Vietnam with proven and probable reserves of 53 million tonnes, making it one of the largest such deposits in the world. By 2008, Nui Phao is scheduled to become a major low-cost producer of tungsten, a strategic metal, and fluorspar. Significant by-product revenue will also be derived from bismuth, copper and gold. An offtake agreement for the bismuth was announced towards the end of last year with Sidech of Belgium, which is the world leader, to take all the output which is expected to amount to 1,000 tonnes/year for the first five years. The price would be based on market prices published at the time in the Metal Bulletin. Sidech will also lend its expertise to enhance the recovery of the bismuth products produced at Nui Phao.
Tungsten and bismuth together should account for around 44 per cent of revenue with fluorspar contributing an approximately equal amount. Demand for acid-grade fluorspar, which is used as a coolant in HFC freezers and refrigerators, has driven the price to the highest point seen in the last fourteen years as it has the great advantage of being environmentally neutral. Tungsten is a strategic metal with amazing physical qualities in terms of hardness, density and a high melting point and it is in demand from a wide range of applications from lighting filaments, speciality steels and electronics to bullets. Four years ago the US Army announced that it was switching from lead to tungsten for its 5.56 mm bullets to avoid environmental damage - slightly farcical when the purpose of bullets is considered. The sum then went as follows. If each of 200 million bullets sprayed around the world by the US army contains an ounce of tungsten it will take 3,500 tonnes of the metal, which is equivalent to an eighth of current world consumption.
Not a lot more has been heard about this plan. Presumably because the US has been spraying even more bullets and the price of tungsten has been rising. The important change in the tungsten market occurred when China, with an 80 per cent market share, ceased tungsten concentrate exports in 2001 to meet increasing internal demand and to develop value added industries able to compete internationally with their former customers. For several decades China dominated the market to the extent that virtually no exploration has been carried out. As a result Tiberon, with its development-stage Nui Phao tungsten deposit in Vietnam, is one of the few companies positioned to meet the need of end-users for a stable, non-Chinese tungsten supplier.
In January the company revealed the results of an interim feasibility study for the Nui Phao project which were very robust. The conclusion was that an open pit mine could produce 69,000 tonnes of tungsten trioxide, 3.5 million tonnes of acid grade fluorspar concentrate , 15,000 tonnes of bismuth as well as gold and copper over a 16 year mine life to give a 22.4 per cent fully leveraged rate of return. The project is therefore poised to become one of the world’s largest and lowest cost producer of tungsten and fluorspar as will surely be confirmed in the final feasibility study which is expected to be completed by the end of June. In fact the figures should be even better as a result of the price rises of the principal products.
This should help the financing to be completed by the end of the year with a view to start-up late in 2007 and commercial production early in 2008 when it is expected to generate annual pre-tax cash flow in excess of US$47 million. The tungsten offtake contract is awaited with interest to see if a Chinese company gets involved. Its involvement might not end there as Vietnam is on China’s doorstep and there are signs that China wants to get a hand on western production of a number of metals and minerals.