tungsten ranked at 8.5

Extract from a story in todays SMH.

Its obvious if HAZ get their act together there is potential to make substantial money in the Tugsten market.

JAPAN is more dependent than most on the free flow of energy and raw materials to keep its economy ticking over. And like most industrialised countries, it is alarmed by the grip that China holds on what we might call ''strategic'' metals.

That's why Japan Inc - a mix of government and large-scale businesses acting in concert for the national good - moved last year to reduce Japan's dependence on China for the supply of the so-called rare earths that have become indispensable for just about every bit of high-tech gadgetry you can imagine.


China did that by becoming the major debt and equity backer of Lynas Corp's (ASX: LYC) Mount Weld rare-earths project near Laverton, in Western Australia, and its associated, and occasionally controversial, processing facility in Malaysia.

The deal gave the Japanese supply offtake rights, which will account for about 25 per cent of that country's consumption of rare earths, reducing its reliance on China, which currently accounts for as much as 90 per cent of global supplies.

Now, according to the British Geological Survey, rare earths sit at 8 points on its supply risk index, with 1 point indicating a very low risk of supply issues and 10 points indicating a very high level of risks around supply.

Those at the upper end of the scale, like rare earths, are pretty much China-controlled metals, the main exception being platinum group metals (South Africa has the controlling hand there).

Garimpeiro's interest in all that is that while rare earths are ranked at 8 points, tungsten is ranked at 8.5 points.

It is little wonder then that Japan Inc has also been out and about doing what it can to secure long-term supplies of the metal hardener.

China controls more than 80 per cent of the world supply of tungsten and, as has been its wont in the rare-earths sector, it has been actively managing its industry to ensure its own needs are met by imposing export restrictions, thereby maximising the value of what it does export at the same time.

China is also the biggest consumer of tungsten and most analysts agree that some time in the next couple of years, it could be looking to import some of the stuff itself. That has underpinned a rise in tungsten prices from $US340 a tonne unit (10 kilograms of contained metal) in January to more than $US480 a tonne unit.

So, the urgency for Japan - and the rest of the industrialised world - to break China's stranglehold on the market for tungsten is real, remembering that among its many uses, tungsten also has armour piercing abilities that defence forces around the world kind of rely on.