China's stranglehold on the tungsten market
Marketwatch - November 10, 2006 7:27 AM ET
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SAN FRANCISCO (MarketWatch) -- Used in everything from light bulbs to bullets, tungsten is a metal that's all but monopolized by China, which produces about 85% of the world's supply -- leaving the U.S. at a handicap.
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One of the largest known deposits outside of China is being developed by Tiberon Minerals in Vietnam, said Roulston. "Tiberon is in the planning/financing stage and expects to start construction soon," according to HRA's Coffin.
Roulston said he toured a small "past-producing mine" earlier this year in Thailand, a country which used to be a major producer of tungsten, which came from small, very high-grade deposits. A small company called Amanta Resources "is looking at it as a possible larger, lower-grade mine," he said. Roulston owns shares in Amanta, as well as Galway and Playfair Mining Ltd.
Meanwhile, Coffin called Vancouver-based Primary Metals Inc. "one of the few survivors of China's period of predatory pricing." It owns a 100% interest in the Panasqueira tungsten mine in Portugal. That mine "has been going for a hundred years and should have enough ore to go for a lot more," said Coffin, who owns shares in PMI and Playfair Mining.
"PMI has a very small float (about 15 million shares out) so it flies under the radar, but it has been very profitable and should continue to be so," he said. The stock is "fairly cheap relative to the profits they can generate," he said, though it is not very liquid.
North American Tungsten owns the Cantung mine site in the Northwest Territories, which the company said is the Western world's largest tungsten supplier. It also owns the Mactung deposit which lies on the Yukon Territory and Northwest Territories border. Coffin said Mactung is the biggest undeveloped tungsten deposit in the West.
Playfair Mining has said it has four "advanced-stage" Canadian tungsten projects. "PLY probably has the best upside since they are just starting to get their story out," said Coffin.
Over in the U.S., Galway Resources has resumed work on the Indian Springs tungsten property in northeastern Nevada that was dropped in the early 1980s by Utah International (later acquired by BHP Billiton (BHP)) because of low prices for the commodity, according to Hinchcliffe.
The new, increased pricing environment for tungsten will enable the company to move quickly into the scoping-study level for the property, likely by March 2007, he said. Other than that property, he said he believes there are no other "serious" tungsten projects in the U.S.
Permitting is a crucial issue at the Indian Springs property, but it's possible that if all goes well with the continued development of the project, Galway could begin mining the deposit in "something like 4 years," said Hinchcliffe.
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