China to Reduce Exports of Tungsten

By Michael Montgomery—Exclusive to Tungsten Investing News

The price of tungsten has risen 54 percent on the year to around $300/mtu. Most of the price surge is credited to Chinese consumption, which accounts for 37 percent of the world’s total tungsten demand. Just like with rare earth and molybdenum exports, Chinese officials are cutting back exports of tungsten. With cutbacks in the REEs and moly exports have had positive impacts on price, most notable in REEs.

The cutbacks in exports quotas for tungsten are far less severe than the 72 percent reduction in rare earths. Chinese officials have stated that they have “decided to cut tungsten export quota for 2011 by 300 tonnes to 15,700 tonnes compared with 16,000 tonnes for this year,” as reported on Steel Guru. This export reduction will place upward pressure on prices, especially when coupled with increasing demand in China and worldwide; however, the modest size of the reduction will prevent the exploding of prices, like that experience by other reduced Chinese export commodities, from occurring in the tungsten market.

The Chinese government is also considering strategic reserves of ten metals, tungsten included. The combination of a reduction of exports as well as a potential buildup of stockpiles may force China to become a net importer of tungsten, a major benefit to non-Chinese producers of the metal.

Tungsten Mining News

Woulfe Mining Corp. (TSXV:WOF) announced the sale of shares as to Korea Zinc for funding of its ongoing tungsten/molybdenum project. “The Korean company signed an initial agreement to buy 33.3 million new shares, or a 13.46 percent stake, in Woulfe Mining for C$10 million ($9.8 million)… Korea Zinc will also purchase new shares in the three units for a total C$40 million,” according to Sungwoo Park, for Bloomberg.

The deal will raise capital for the development of Woulfe’s Sangdong mine which produced tungsten until the early 1990’s when low prices forced the mines closure. However, the rebounding price of tungsten has made the viability of the mine a reality. “The breakeven price calculated in the scoping study was $167/mtu, which gives the project some attractive economics at today’s prices,” stated Woulfe Mining CEO, Brian Wesson.

Australian-listed Minemakers Limited (ASX:MAK) has announced that it would list Tasmanian assets into a separate company named TNT Mine. The company hopes the IPO will raise A$10 million. “TNT would hold the tin and tungsten mines of Aberfoyle and Storey’s Creek, as well as the Lutwyche tin/tungsten deposit, the Anchor tin mine, the Royal George tin mine, and the Great Pyramid tin deposit, as well as various other exploration targets,” reported Esmarie Swanepoel, for Mining Weekly. Minemakers is hoping to list TNT Mine in the first quarter of 2011.