Companies in the tungsten supply chain are abuzz over a recently announced joint venture that could drastically change the tungsten supply landscape.
This amidst the past week or so, which generated several big metals news stories including skyrocketing rare earth metal prices, the ongoing LME aluminum warehouse story and our own unique coverage examining how producers profit from current practices.
But on June 24, MetalMiner reported that only one tungsten junior mining project would likely receive funding: the Nui Phao project in Vietnam, owned by the Masan Group.
Indeed, that has happened, and much sooner than we originally anticipated, as H.C Starck has formed a joint venture with Nui Phao to process “all of Nui Phao’s tungsten concentrate into higher value-add tungsten chemicals, including ammonium paratungstate (APT) and blue tungsten oxide (BTO).”
The joint venture will process 6,500 tons of tungsten trioxide annually, according to the press release. But perhaps the most important element of the deal involves the purchase commitment made by H.C. Starck for its own internal production.
Great Hedge Against China
With China controlling over 59% of total world tungsten reserves, this announcement not only helps loosen the stranglehold the Chinese have over this market, but also paves the way for a conflict-free source of supply. The Nui Phao deposit will rank as one of the largest with an expected 15-year mine life, according to the press release.
What This Means for the Tungsten Market
“This mine is just coming into production, so it remains to be seen what effect it will have on the market,” said Tyler Showalter, design engineer and quality control manager at Buffalo Tungsten. Starck will have to invest more money to make the higher-value items (APT & BTO) as the project originally did not have that capability, according to Showalter.
Showalter also believes it will take another year or two to bring the project to market, so the positive impacts won’t show up for a little while.
Moreover, Showalter thinks it’s a good arrangement for both parties, as the mine needs a steady customer to remain viable and now Starck can source material without any issue dealing with conflict minerals.
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