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With China’s export policies spreading concern about the future supply of critical metals, such as antimony, bismuth and rare earths, some junior miners are rising to the occasion, exploring deposits in North America and Europe to ensure a stable supply of these metals, which are needed for key industries, such as manufacturing and technology.
By Karan Kumar – Exclusive to Resource Investing News
Antimony, platinum group elements, mercury, tungsten, rare earths, niobium, strontium, bismuth, thorium and bromine topped the British Geological Survey’s list of elements whose supply is at the most risk. China is the leading producer of 28 of the 52 metals on the BGS list, including antimony, bismuth and rare earths.
“Nationalism is something of a growing roadblock, as countries decide to insert themselves into the mining operations of those that are looking to produce these strategic metals, or attempt to restrict their export or usage,” Jon Hykawy, head of global research at Byron Research Markets, told Resource Investing News. “But even though most of the rare earths and some other materials, like antimony, are largely mined in China, there are very good deposits elsewhere.”
Juniors mining at risk elements
That’s where Adroit Resources Inc. (TSXV:ADT), listed on the Toronto and Frankfurt stock exchanges, steps in. Adriot’s antimony mining operation in Italy is expected to start production in 2015, Catherine Feore, Vice President of Marketing, told Resource Investing News. “We aim to have a mine life of 10 years, producing 10,000 tonnes a year, which would make Italy second after China on currently available production figures.”
Feore said “antimony demand is increasing and supply is going down.” She pointed out that according to data from the US Geological Survey, China produced 180,000 metric tons of antimony in 2008, dropping to 120,000 metric tons in 2010. Globally, 135,000 tons were produced in 2010. Of the Chinese production 50 percent comes from one mine.
Vancouver-based Mountain Lake Resources (TSXV:MOA), a gold exploration company, is “only exploring for antimony by accident because we found it on a discovery stage property called Little River that we originally optioned in 2008 for its gold showings,” spokesman Greg Lytle told Resource Investing News. “Time will tell if we can source the origin of the antimony showings we have found to date, but we remain encouraged by the fact that the Beaver Brook antimony mine 80 km north of Little River was originally found by accident too. Beaver Brook is one of the largest antimony deposit in the world outside of China and the only primary producing antimony mine in North America, outside of Mexico, that we are aware of.”
On the bismuth front, Fortune Minerals Ltd. (TSX:FT,FWB:FMP), based in London, Ontario, has its Nico project in the Northwest Territories in the latter part of the permitting stage, Chief Executive Officer Robin Goad told Resource Investing News, adding that the project is expected to be in commercial operation in 2014. The Nico project has a mine life of 18 years based on a current production rate of 4,650 tonnes of ore a day. The mine contains about 109 million pounds of bismuth, 907,000 ounces of gold, 82 million pounds of cobalt and 27 million pounds of copper.
“Three of the four metals that will be produced from our Nico deposit, including bismuth, cobalt and gold, all have BGS risk ratings of more than 5, making Nico an important strategic source of supply for these metals.” Goad cautioned that China’s resource nationalism “could be a concern for global manufacturers that need reliable sources of supply for their critical raw materials. Nico will be a fully vertically integrated, reliable, North American-based producer for certain critical industrial metals.”
The size of the bismuth market “is not well understood,” Goad said, “but we believe it is between 15,000 and 20,000 tonnes per year, 75 percent of which is currently supplied from China. Our mine will produce about 1,700 tonnes per year.”
Supply outside of China
Both Feore and Goad said the market for critical metals is constrained because of the dominant supply coming out of China or politically unstable regions such as the Democratic Republic of Congo, the world’s biggest supplier of cobalt or Rwanda, the leading producer of tantalum.
“There would be additional demand if there were additional supplies coming from producers in North America,” Goad said. “We think there is a good market niche for developing specialty metals and we have been pursuing this sector for many years now. We are also looking for strategic relationships to help finance our projects with partners that have a need for the materials we will produce .”
Adroit’s Feore said that “what governments have to realize is they should be doing their utmost to encourage exploration of all these critical metals. Sometimes people think of somewhere remote in Latin American, Africa. But you have resources at your doorstep. The BGS study showed that rare earths are not even in the high risk category. It is antimony, platinum group elements, mercury, tungsten. What I would absolutely love to see is governments, particularly the EU, to stop making exploration so difficult. The EU should be encouraging people to do exploration. You should not be turning toward other jurisdictions. You should recognize you have resources in your own countries.”
Securities Disclosure: I, Karan Kumar, hold no direct investment interest in any company mentioned in this article.