BY BRIAN WAWN, PROJECT MONITOR
In the early 1900s, Australia produced around half of the world’s tungsten, mainly from far north Queensland. But from then on, Queensland mining in this sector went into long-term decline.
By the 1940s, Australia produced less than five per cent of the world’s total, mainly from King Island in Tasmania.
Today, China accounts for over 80 per cent of global production. Australia accounts for less than 1 per cent.
However, there is some optimism in the Australian tungsten sector about the growth outlook.
As stated by Vital Metals Managing Director Mark Strizek, the sector has seen “significantly higher Australian dollar tungsten prices in recent months”, while “the overall industry slowdown has led to a significantly reduced operating and capital cost structure”.
This year, tungsten prices have risen by about 15 per cent in US dollar terms and over 30 per cent in Australian dollar terms. Behind this lies increasing global demand and restrictions by China on exports of tungsten products.
Encouraged by this price increase, Vital Metals announced on 17 July that it is considering a major expansion of its Watershed project in far north Queensland, tripling annual ore production from one million tonnes to three million tonnes.
The Japan Oil, Gas and Metals National Corporation (JOGMEC) is helping to finance a feasibility study of Watershed, with this to be completed in late 2013.
Also in far north Queensland, the company Carbine Tungsten plans to redevelop Mount Carbine, where previous tungsten production was discontinued in the 1980s in the face of low prices.
This will entail the processing of stockpiles and open-cut mining; the company is already processing tailings from previous operations.
A Sydney-based company plans to redevelop the historic operation at King Island in Tasmania. An updated feasibility study of the project, called Dolphin, will be completed in late 2013.
And in Western Australia, the company Tungsten Mining completed a scoping study in June on the Kilba project (southwest of the Pilbara region). It plans to start a feasibility study in coming months.
In all four cases, processing will lead to a tungsten concentrate for export.
According to Geosciences Australia (the Federal government’s national geoscience agency), Australia has 11 per cent of the world’s tungsten resources, suggesting there is considerable scope for expansion in this sector.
The increase this year in tungsten prices is not necessarily a forerunner of other mineral-price increases; because of China’s control over supply, tungsten may be a special case.
However, Mr Strizek’s comment on easing costs pressures is a good sign for the mining industry as a whole.
Statement by Mr. Fumio Kishida, Minister for Foreign Affairs, on the Issuance of the Appellate Body Report concerning “China - Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum” in the WTO Dispute Settlement Proceedings.
On August 7 (same day local time), the Appellate Body of the World Trade Organization (WTO) issued its report, upholding the Panel’s conclusions that China’s export restrains are inconsistent with the WTO Agreement and China must bring these measures into conformity with its obligations under the WTO Agreement in the dispute “China - Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum”, in which Japan, the United States, and the European Union had filed their complaints against the People’s Republic of China with respect to its export restrictions.
Japan highly values the issuance of the Appellate Body’s Report entirely supporting the Japan’s claims. Japan finds it deeply significant that the Appellate Body makes clear that export restrains of the imposed by China which would favor Chinese domestic industry for the use of exhaustible natural resources, cannot be justified, under the guise of protecting environment or conserving natural resources under the WTO rules.
As a result of this report, Japan calls for China to faithfully and promptly bring its WTO inconsistent measures into conformity with its WTO obligations under the WTO Agreement.
While China has defended its move, findings from the WTO in August would suggest that China has been directed to export some of its supply and keep markets open. Interesting China is appealing. (They want to keep supply local as much as possible)
------------------------------------------------------------------------------ Final finding of today suggests that Japan has sought to increase their defence budget.
Japan News By TOKO SEKIGUCHI Aug. 30, 2014
TOKYO—Japan's Defense Ministry has requested a budget of ¥4.899 trillion ($47.1 billion) for the coming fiscal year starting April 1, a 2.4% increase over the amount for the current year. If granted, it would be the third year in a row Japan has expanded its military spending.
The figure, requested by ministry Friday, doesn't include spending related to U.S. bases in Japan, or for the purchase of a new government airplane for Prime Minister Shinzo Abe. If these items are included, the total budget request would be ¥5.054 trillion, the largest ever for the ministry. It would also come as Mr. Abe continues his program to beef up the country's defense capabilities.
Interesting thing is that CNQ and other tungsten producers in Australia should benefit greatly from increased military spending, which leads to increased manufacturing and from the fact China is not bending over to WTO in releasing rare metals.
Japan which led the complaint will be looking to source what they can and hopefully we benefit.
My impression was, and still is, that Mits have a genuine interest in CNQ, and funding is ready to go, but CNQ are still looking for more than what is being offered. I only hope we see the benefit of any delayed tactics soon.
Have a great Sunday all.
CNQ Price at posting:
9.9¢ Sentiment: Buy Disclosure: Held
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