Moly turns the corner Robin Bromby From: The Australian May 12, 2010 11:53AM Increase Text Size Decrease Text Size Print Email Share MOLYBDENUM was all the rage a few years back. And it had a great story: apart from its use in steel, it was particularly in demand for making oil and gas pipelines because with moly’s strengthening attributes the overall pipe weight could be much lighter.
Now Roskill Information Services, a British company that follows many of the minor metals, says molybdenum has seen its worst, and demand is recovering. It is expected small surpluses will exist for the next year, but the metal will tighten by 2011.
Roskill said the price would rebound to about $US35/lb by 2014, against the current $US18/lb.
The only worry is much planned new capacity. At present prices, mining companies might be deterred from developing operations, according to Roskill.
Moly is not a big market - at its peak demand in 2008 there was only 220,000 tonnes bought and sold.
Meanwhile, there are reports out of China that demand for molybdenum is remaining strong, due largely to the large number of railway and pipeline projects under way as Beijing pours billions into infrastructure. There are plans - delayed until there is greater market certainty - for a Russian molybdenum company, Strikeforce Mining, to float on the Hong Kong stock market. The report says there is also strong pipeline building activity in countries such as India, Kazakhstan and Russia.
And it looks as if a new use could have been found for the metal. It is reported that scientists at the University of California at Berkeley have found an inexpensive way in which to generate hydrogen from water. Up until now the electrolysing process has been carried out using platinum but the scientists have found that molybdenum also does the trick. And its 70 times cheaper than platinum.
Theres been some movement lately on the moly scene in Australia.
Last month Moly Mines came under the control of Hanlong Mining Investment after injecting $US200 million into the company, a move which backs up the reports of continuing good demand from China. This will allow development to recommence at the Spinifex Ridge molybdenum project in Western Australia.
This week we heard from Coppermoly that its farm-in partner, Barrick Gold, has started diamond drilling at the Nakru moly prospect in Papua New Guinea. Barrick can earn 72 per cent of the three tenements by spending $20m within eight years.
Now today comes news from Zamia Gold Mines that it is expanding the search around its Anthony molybdenum project in central Queensland. The resource, discovered in 2008, now stands at 81m tonnes at 0.043 per cent molybdenum. Theyll be looking at an area where drilling by a previous explorer intersected copper and gold, but there was no testing at the time for moly.
Dart Mining reports it has hit high grade molybdenum at its Unicorn project in Victoria. One intersection came in at 0.19 per cent moly. The hole had visible molybdenum and copper.
Investors interested in the molybdenum story should also keep an eye on Aussie Q Resources which has announced considerable data already and remains very active looking for moly and copper near Monto, Queensland.
MOL Price at posting:
77.0¢ Sentiment: Hold Disclosure: Held
