September 2007 specialist
Australian tungsten and tungsten/molybdenum explorer and aspiring mine
Metals, commissioned independent specialist metal marketing consultants,
GBRM Ltd, to conduct a comprehensive update of the world-wide market for
primary tungsten production in the form of ores, concentrates and intermediate
products such as ammonium para-tungstate (APT). This study is intended to be
used in the feasibility study for the Watershed scheelite (calcium tungstate)
project and as an overall update of the original tungsten market study prepared
by the same group and published in the Vital Metals Prospectus in 2005.
completed new study, the company says, “would appear to be the most
up-to-date and comprehensive review of the tungsten market situation available
in the world at this time. The investigation includes a new look at the current
and developing uses of tungsten, new technologies, a detailed look at existing
and new planned production within China, which
still dominates world production, new deposits and planned new mines outside of
production and production cost trends and a detailed look at the global
supply/demand equation in coming years.
result is a 50-page document, which presents a full picture of the future
outlook for tungsten from a primary production view.
principal conclusions of the study are:
Over the five years to end 2012, global consumption of tungsten metal is
expected to increase from its current level of approximately 81,200 t
(including 59,800 t of new primary production – the balance being re-cycled
scrap) to 109,328 t; thereby requiring almost 82,000 t of primary output – an
increase of some 22,000 t of ‘new’ production.
While there has been a significant increase in exploration and mine development
activity outside China in recent
times, no major new production, apart from the restart of the CanTung mine in
2005, has actually been realised and is unlikely to occur until at least late
Rapid increases in mine development and operating costs is increasingly
indicating that a further advance in price structures is necessary before new
mine developments will actually be achieved.
China has not
only curtailed its domestic mining programs but has now become a significant
importer of tungsten concentrates and tungsten scrap.
The forecast is for global prices for APT (ammonium paratungstate – most tungsten concentrates are
processed chemically to APT) to reach and even exceed $300/metric tonne unit – a
25% increase over the current pricing level.
Almost no tungsten concentrates are currently produced in US dollars, so that
even if the US dollar continues to decline, the global market price for
concentrates and APT will adjust to reflect this change.
goes on to conclude “A strong
escalation in prices has already occurred over the past three years. However
with producers struggling to meet demand, global mining costs continuing to
increase, and the Chinese Government likely to impose tighter production quotas
and higher export tariffs to maintain reserves, further global price escalation
summary pages from this report will be available in the next few days on the
Vital Metals website at http://www.vitalmetals.com.au/metal_markets/tungsten.phtml.
Chadwick is editor and proprietor of International Mining Magazine –