China Increasing Vandium UseVanadium a key component of U.S. mining strategy - Denison
The shift ofChinese steel manufacturers to higher-quality steel products means goodnews for vanadium miners, says Denison Mines CEO Ron Hochstein.
Author: Dorothy Kosich
Posted:Wednesday,02 Mar 2011
RENO, NV -
Denison Mines CEO Ron Hochstein says vanadium is a keycomponent of the company's U.S. strategy as China makes a shift to moremanufacturing of high strength, low-alloy quality type steels.
In apresentation to the BMO Capital Markets 20th Annual Global Metals &Mining Conference in Florida, Hochstein noted that Chinese government isencouraging China steel manufacturers to utilize more vanadium in orderto lower the number of steel mills in the country, as well as helpingto reduce pollution generated by steel manufacturers.
Hochsteinestimated that 61,000 tonnes of vanadium are required to satisfy thecurrent global market. The U.S. Geological Survey estimates that 56,000metric tonnes of vanadium were mined in 2010. World resources ofvanadium are estimated at 63 million tons.
Metallurgical use ofvanadium, primarily as an alloying agent for iron and steel account forabout 97% of U.S. vanadium consumption in 2009, said the USGS. There iscurrently no acceptable substitute for vanadium in aerospace titaniumalloys.
Denison (TSX: DML, NYSE Amex: DNN) is now qualified to supplyvanadium to the only U.S. producer of titanium alloys, Hochstein said.
Meanwhile,Hochstein also discussed Denison's agreement with White Canyon Urainumat a total consideration of Cdn$56.6 million, which was made public onFebruary 22. White Canyon (TSX-V: WU) is a Perth-based company with U.S.operations based in Moab, Utah and holdings which include six projects,covering 15,500 acres in the Red Canyon district of Southern Utah.
WhiteCanyon has been mining uranium from its Daneros Uranium Mine sinceDecember 2009. The uranium is processed at Denison's nearby White MesaMill. Hochstein suggested that due to undercapitalization, WhiteCanyon's U.S. properties have not yet been adequately explored.
Denisonhas three U.S. uranium mines in operation, Beaver, Pandora, and Arizona1. Meanwhile White Mesa offers an ore-buying program for independentminers who mine uranium and vanadium. White Mesa's estimated productionthis year is 1.2 million pounds of uranium and 2.2 million pounds ofvanadium.
Denison's 2011 sales forecast calls for 1.3 million poundsof uranium sales and 2.8 million pounds of vanadium sales. Miningrevenue is expected to be $118 million.
The company is aiming forsustainable uranium production of 10 million pounds annually by 2020through a portfolio of U.S., Canadian and international projects. In hispresentation, Hochstein told analysts and institutional investors atthe BMO conference that the company's pipeline of diverse projectsreducing political, geographic and permitting risks for Denison.
Denison intends to spend $28.8 million in exploration and development spending this year.