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Waning domestic prospects send China looking elsewhere for molybdenum

TORONTO (miningweekly.com) – China is becoming more active in investing in foreign molybdenum projects because its supplies from domestic mines are coming under pressure, Teck Resources' Michael Schwartz said on Sunday.?

Ina presentation on the outlooks for copper and molybdenum at theProspectors and Developers Association of Canada convention in Toronto,he pointed out that two of the major moly projects that needed capitalgoing into the economic crisis have now been financed by China.

MolyMines Ltd (MOL.TO) has arranged funds for its Spinifex Ridge project, in Australia,from Hanlong Mining Investment, while US-based General Moly announcedjust this Friday that it had also signed a deal with Hanlong to fullyfinance its Mount Hope project in Nevada.“The indication is that theChinese mining life domestically is shortening up, the grades aregetting worse and the costs are going higher,” Schwartz said.“And we are seeing this as the Chinese are starting to go outside of their walls to pick up new production.”

Theprice of molybdenum, which is used to strengthen steel, had recoveredto $18,60 by last week, which is well off the lows of $8/lb in Aprillast year, but still a far way from the $30-plus levels seen in thesecond half of 2008.“The Chinese are going to be short of molybdenumgoing forward. They know about it and they are going out to findsources for it,” Schwartz commented