Technology metals manufacturer HC Stark aims to increase its presence in Asia, and it believes a deal with Nui Phao is just the way to do so.
Global technology metals manufacturer HC Starck recently signed a joint venture agreement with Nui Phao Mining, a subsidiary of Masan Group, one of Vietnam’s largest private-sector business groups, for the production of value-added tungsten chemicals in Vietnam.
What makes the partnership with Nui Phao significant is that the company is developing one of the world’s largest tungsten mines; it has an expected 15-year life and is located in Vietnam. The German company believes the deal with Nui Phao is just the ticket to increase its presence in Asia.
As part of the venture, the companies will begin work on the construction of a tungsten chemical plant, with the first stage to start production sometime in August. The plant is expected to be completed in 2014.
Nui Phao will hold a 51-percent stake in the venture, while HC Starck will hold the remaining 49 percent, according to HC Stark’s statement. Through the partnership, the companies will look to produce value-added tungsten chemicals like ammonium paratungstate (APT) and blue tungsten oxide (BTO) from the entirety of Nui Phao’s materials. The venture is expected to produce 6,500 tons of tungsten trioxide per year. HC Starck has committed to purchasing a significant share for its own use.
The importance of tungsten to HC Starck
HC Starck’s CEO, Andreas Meier, told Metal-Pages in a recent interview that he believes tungsten demand is starting to stabilize. Prices have stepped down from their 18-month highs and “destocking initiatives in the tungsten supply chain may be coming to an end.”
With that in mind, Meier admitted that the company is “reluctan[t] to become reliant on increasingly tight export supplies from China,” particularly if it is looking to target the Japanese and South Korean markets. It will continue on this path with the value-added tungsten products from its joint venture with Nui Phao.
“Our view remains unchanged that China is heading for more added value-products to be produced in China and if you look how export licences have been reduced we see that outside of China when GDP growth rates recover it will again become very tight,” Meier told Metal-Pages.
Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.