I noted in the interview that Andrew once again made mention of his past experience running the Los Santos Tungsten mine in Spain.
Reading through the flow of posts since that Molyhil project agreement was announced at the end of last month, I notice that sentiment about this transaction has been split among holders here, with some for it and others more chary about the deal.
Personally, I fall into the former camp. I find tungsten a very intriguing metal.
Tungsten is surprisingly uncommon. Last year, only 79,000 tonnes of tungsten were produced worldwide, if the estimate from the US Geological Survey is to be believed.
By way of comparison, in that same year, around 820 million ounces of silver were produced, according to the Silver Institute, which roughly equates to just under 24,000 tonnes.
In other words, last year, for every ounce of silver produced, only around three ounces of tungsten were produced. And yet, for some reason, tungsten is cosidered to be an industrial metal, whereas silver is ranked as a precious metal.
Scarcity aside, there is reason to suspect that the prospects for tungsten may be being a little underappreciated by investors at the moment.
Tungsten is the metal of Mars, the metal of war. Being both heavier than lead and harder than steel, tungsten has been considered an important strategic metal since the First World War, and in both world wars the price of the metal went through the roof.
Over the past year, another war, this one in Ukraine, has been dominating the headlines, and the sad reality of war is that wars tend to lead to more wars. Tungsten thus would seem to be a metal that would appear to be made for the moment, and my feeling is that the Molyhil move was both canny and contrarian.
Speaking of geopolitics, there is one other crisis that I think it would be wise to keep an eye on, as it could have implications for the price of silver, the key commodity for Investigator.
Last year, Peru endured a
deeply divisive election, which was in the end narrowly won by the socialist leader Pedro Castillo, though the opposing candidate, Keiko Fujimori, suggested that fraud had taken place.
The political tensions in the country continued into the new year, and on the 7th of December president Castillo was removed from office and impeached, following on from an attempt by the leader to rule by decree. This has sparked protests across the country from his mostly rural support base.
The situation has already resulted in logistical complications at a number of mine sites, as
reported by Mining Weekly a few days ago.
Peru is the third largest silver producer in the world, and so if the tensions in Peru continue, it is not hard to imagine that this could lead to disruptions in the flow of silver from the country.
Given that there is already a demand-supply mismatch, as noted by McIlwain in that interview, any disruptions to the supply of silver from Peru could have an outsized impact on the silver price.
Something to keep an eye on in the weeks ahead.
, if you are interested in tungsten
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