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TORONTO (miningweekly.com) – China is becoming more active in investing in foreign molybdenum projects because its supplies from domestic mines are coming under pressure, Teck Resources' Michael Schwartz said on Sunday.
In a presentation on the outlooks for copper and molybdenum at the Prospectors and Developers Association of Canada convention in Toronto, he pointed out that two of the major moly projects that needed capital going into the economic crisis have now been financed by China.
Moly Mines has arranged funds for its Spinifex Ridge project, in Australia, from Hanlong Mining Investment, while US-based General Moly announced just this Friday, that it had also signed a deal with Hanlong to fully finance its Mount Hope project in Nevada.
“The indication is that the Chinese mining life domestically is shortening up, the grades are getting worse and the costs are going higher,” Schwartz said.
“And we are seeing this as the Chinese are starting to go outside of their walls to pick up new production.”
The price of molybdenum, which is used to strengthen steel, had recovered to $18,60/lb by last week, which is well off the lows of $8/lb in April last year, but still a far way from the $30/lb-plus levels seen in the second half of 2008.
“The Chinese are going to be short of molybdenum going forward. They know about it and they are going out to find sources for it,” Schwartz commented.
Freeport-McMoRan Copper & Gold is the biggest producer of molybdenum.
