01 Feb 2015 Europe scrabbles for it. China wants to keep it, but...

01 Feb 2015

Europe scrabbles for it. China wants to keep it, but few are urgent about mining it. In the first instalment of our Elements of risk series, Eoin Redahan looks at tungsten.

Usually 9.5 out of 10 is an excellent mark, but not if you are tungsten. In a Risk List compiled by the British Geological Survey in 2012, the hard metal was considered the second most precarious in terms of future supply, behind rare earth elements.

Unfortunately, tungsten is not a material that can be easily sidestepped. Substitute materials are expensive, and it plays an important role in cutting tools, drill bits, light bulb filaments and armour-piercing bullets.
And yet it is not scarce. There are 3.5Mt of it buried beneath the ground. It’s just that a certain communist state produces almost all of it. Of the 71,000t churned out last year, China accounted for 60,000t. To make matters more worrying, the Cantung mine, in Canada, which has long been the largest producer outside China, will cease production in 2017.

In the short term, several green and brownfield projects will fill the Cantung void, but they are coming through slowly. Wolf Minerals’ Hemerdon Mine, in Devon, UK, will start producing in the third quarter of 2015. It is expected to provide 3,500t annually over its 10–15-year life.

Another mine that will soften the Cantung exhaustion is the Nui Phao project in Vietnam, which, according to Mineral Consultant Roskill, could produce 6,500tpa for 16 years. The worrying thing, however, is that you can count the number of these new projects on two hands.

In the long term, China is unlikely to export much of its tungsten. The reason for this is probably less to do with a political power play and more with the fact that it needs the material for its own ends. So, while export restrictions have recently been relaxed, this measure may prove hollow.

As Metal-Pages’ World Tungsten Report noted in 2013, China isn’t exactly brimming with tungsten. ‘Chinese tungsten producers are struggling to maintain output at current levels due to a lack of investment and declining ore grades at current mines.’

Therein lies a large part of the supply problem. Tungsten struggled to charm investors at the best of times. With few willing to invest in any mines at all, the prospect for tungsten looks bleak. Without new mines, manufacturers will rely on a slow trickle from a few mines, a significant portion of which will be short-term brownfield sites.
In short, you don’t need to worry about the price of your drill bits and bullets for the moment, but in the next few years, expect tungsten prices to rise.

Did you know?

The word tungsten comes from the Swedish tungsten, which means heavy stone. It also has the highest melting point of all the elements, at 3,422°C.

2013 world tungsten production by country in tonnes, according to the US Geological Survey

• Austria 800
• Canada 2,200
• Portugal 800
• Other countries 3,700(approx.)
• Bolivia 1,200
• China 60,000
• Russia 2,500
• World total 71,000(approx.)

http://www.iom3.org/news/elements-risk-tungsten?c=574