Tungsten tipped to become scarce from 2015

Tungsten is one of a number of “critical elements” that will become increasingly scarce from 2015, according to a well-known mining consultant.

Lara Smith, managing director of South African group Core Consultants, told the Geological Society of South Africa that tantalum and certain types of rare earths would also be become much harder to find over the next three years.

The European Union and the US Department of Defence have already put these three metals at the top of their critical list.

China is the world’s main producer of tungsten but is now the major user as well.

The Chinese already account for more than half of world appetite and with thier tungsten demand growing rapidly, they have adopted measures to protect supplies

This is throwing up huge opportunities for the development of tungsten ores, concentrates and intermediary products outside of China, said Smith.

The growth in demand has necessitated the sale of government stockpiles, Smith asserted, adding that the market is likely to face a 15,000 tonne (t) deficit this year. According to the US Geological Survey, the US stockpile has already fallen from around 35,500t to 7,500t over the past ten years.

Rising Chinese inflation is also likely to push tungsten prices higher.

A number of companies in Europe are in the process of establishing new tungsten mines to try to meet the expected gap in supplies.

Ormonde Mining (LON:ORM) is awaiting final permitting for its Barruecopardo tungsten mine in Spain that will produce 227,000 tonnes per year.

W Resources (LON:WRES) is also busy in Spain, exploring and defining a new mine and tailings treatment plant at La Parilla in the south-west of the company.

In the UK, Wolf Minerals (LON:WLFE) has just started development of its Hemerdon project in Devon having agreed a financing package in May.

Story by ProactiveInvestors