Big Hill To Supply A Third Of Vietnam Plant Feedstock

Western Australian’s Big Hill tungsten deposit may be in a position to supply a third of Hazelwood Resources’ requirements for a new ferrotungsten plant in Vietnam, an integrated prefeasibility study has shown.


Last month Hazelwood took a 60 per cent stake in the plant.

In the first phase the plant would have a capacity of 2.4-million kilograms of contained tungsten, in the form of 80% grade ferrotungsten, and would rely on feedstock from external sources. The first stage will be ready by the end of this year and the plant is scheduled to commence production early next year.
Stage two will double capacity to 4.8-million kilograms of contained tungsten and Big Hill is slated to provide around a third of the feedstock.


“The ferrotungsten business in Vietnam requires a long-term supply of high-purity feedstock and the development of Big Hill will allow us to increase the scale and quality of production,” said Hazelwood MD Terry Butler-Blaxell.



“We are currently conducting extensive pilot test work trials for process optimisation and product certification,” he added.


A definitive feasibility study of the Big Hill deposit will be completed by the second half of this year.


The Vietnam plant will be the largest producer of ferrotungsten outside China, capable of 25 per cent of global demand for the product.

Hazelwood Buys 60 Per Cent Stake In Ferrotungsten Project

Australian miner, Hazelwood Resources, has acquired a 60% interest in a new ferrotungsten plant in Vietnam as part of its vertical integration strategy. The plant is expected to be commissioned towards the end of this year and will be located near the port of Haiphong in northern Vietnam.

Hazelwood will pay $825,000 to acquire 60% of the share capital of Hong Kong Based Asia Tungsten Products Company Ltd and will contribute 60% of the capex and provide working capital as a loan. Capex for the first stage the project is approximately $US16.3m.

The plant will have the capability of providing 25% of the world’s ferrotungsten and will be able to operate on feedstock from multiple sources, including concentrate from Hazelwood’s Big Hill Tungsten Project in Western Australia.

At full capacity projected annual turnovers are $US150m at the current ferrotungsten price of $US31.50/kg. Profit after tax for ATC HK is projected at $US32m per annum from 2012. The project is anticipated to be cashflow positive late 2011/early 2012.

China's Special Ferroalloys Market Remains Sluggish

China's special ferroalloy market remains weak despite the fact that March is usually the traditional peak season for the steel market. Industry analysts forecast that the sluggish performance will continue in the short term and the price will fall further though at a slower rate than at present.

The price for FerroMoybdenum price fell to CNY 110,000 to 112,000 per tonne with some transactions price falls at below CNY 110,000 per tonne. Steelmakers' purchase prices are CNY 105,000 to 107,000 per tonne, down CNY 3,000 to 5,000 per tonne from the previous level.

The Prices for Vanadium-series alloys have also fallen. 50 FeV is now offered at CNY 103,000 to 108,000 per tonne with a spot price of CNY 102,000 to 107,000 per tonne down CNY 2,000 per tonne. Ferrotungsten (FeW) has slipped to CNY 118,000 to 120,000 per tonne with the lowest transaction price hitting CNY 105,000 per tonne a fall of CNY 3,000-5,000 within a week.

Traders and analysts believe the weak market attributed to the following factors:

1. Due to a fluctuating steel market, demand remains insufficient. Stock of V-contained high strength third-grade rebar has reached 250,000 tonnes in Shanghai. Stainless steel, which consumes large amounts of ferroalloys, has also witnessed a stagnant operation for a long time. The stainless steel price lost another CNY 500 to 600 per tonne this week. Besides, the high quality and special steel markets appear bleak owing to waning demand from downstream manufacturing industries. Steelmakers are mainly consuming their inventory at the moment and keep a cautious attitude towards special ferroalloy purchasing. Some plan to buy FeMn in mid- and late-March. Some end-users still hold a fence-sitting attitude and are not enthusiastic in purchasing.

2. Traders are not active in sales. As the whole ferroalloy market is weak, traders aren't confident in the future market and mainly hold a wait-and-see attitude. Some traders have been clearing out stocks in order to accelerate capital reflow.

3. Gloomy international markets are also affecting the domestic market. The steel sector has been severely impacted by the global financial crisis and steelmakers have all reduced their steel output, leading to a shrinking demand for ferroalloys. 75% FeW price has slid to USD 27 to USD 28 per kilogram from USD 29.5 to USD 31 per kilogram within one week. Vanadium pentoxide is quoted at USD 6 per pound to 6.5 per pound; FeV at USD 22.5 to USD 23.5 per kilogram, down by USD 1 per kilogram. A sluggish international ferroalloy market has changed China's ferroalloy imports and exports. Jan exports hit 89,800 tons while imports registered 100,700 tons. China exported only 6 tonnes of FeMn in January collapsing from the 1,068 tons last January. FeMo exports started to shrink last November. Figures recorded 99.5 tonnes in November 229.6 tonnes in December and almost zero in January.

Insiders point out that given waning domestic demand, interrupted exports and increasing imports, the domestic market faces growing pressure. The special ferroalloy market can barely shake off its stagnant performance in the near future, but there is limited space for further price falls as many ferroalloy producers have cut their output. Many FeW producers have halted operations. Domestic W concentrate miners have suspended production as the market price comes near to the cost line and imported resources flood in. Some ferroalloy producers keep a wait-and-see attitude after the news that preferential electricity prices have been removed and electricity prices will rise further.

As a result, less ferroalloy products will enter the home market. If the domestic steel market revives in late March or in April steelmakers will release steel capacity, resulting in a swelling demand for special ferroalloys.

Source: Steel Guru

Chinese Ferrotungsten Prices Rising On Short Supply

A shortage in supply after the Spring Festival has led to the export price of Chinese ferrotungsten to increase by USD1 per kilogram to USD 30 per kilogram.

Mines in Ganzhou in Jiangxi province, the key tungsten production base in China have been shut since last November as have a number of major ferrotungsten producers in Jiangxi and they do not plan to resume mining and production in short term.

A local ferrotungsten producer said “We expect a further rise before our restart. The restart time may be February end or March when the weather is fine for mining.”

At present, mainstream price for tungsten concentrate has risen to CNY 65000 per tonne compared with CNY 61000 to 62000 per tonne before the Spring Festival.

Ferrotungsten Higher On Lack Of Material

Reuters reports that prices of ferro tungsten in Europe crept up for the second week running as lack of new supplies from China reinforced a dearth of material in Rotterdam, traders said.

The price quoted was higher at around $30 a kg from $29 a kg last week and $25 a kg two weeks ago before as consumer enquiries for the metal used to make steel for industrial drills were met with empty hands.

"Chinese producers are closed and they will stay closed until after the holiday next week," a London-based trader said. "Most of the material in Rotterdam has been soaked up, consumers are tentatively asking for prices."

Chinese cutbacks and plant closures, expected to continue until after the Lunar New Year holiday next week. also helped support prices of magnesium in Europe.

Magnesium was quoted at around $3,000 a tonne from $2,900 a tonne, but traders said prospects were poor given the dire state of the auto industry.

Overall, traders said there was very little business being done, that they did not expect to see a real recovery until the second half of the year and that the global economic downturn would dampen activity for some months yet.

"People are living hand to mouth, they are only buying when they have to," a UK-based trader said. But he added that he thought China's steel industry was already starting to ramp up production in anticipation of infrastructure spending.

"It's easier to get things moving in China, they have a holiday so things are slow, but their inventory has disappeared and they are worried about all the cutbacks around the world ... They need more than they've got."

Ferro chrome though was struggling, slipping five U.S. cents to 70 cents a pound as producers and consumers negotiated benchmark contract settlement prices.

"The thing is people don't want to settle at these lower prices because they are sitting on stock used as collateral with banks," a Europe-based trader said.

"If the benchmark falls, banks will be knocking at doors asking for more collateral ... That's why the process could take longer this year."

Early indications for charge chrome were for a number between 85 and 95 U.S. cents a pound.

High grade cobalt used to make aerospace engines was bumping along the bottom at around $17 a pound.

London-listed miner BHP Billiton is currently not offering any cobalt which makes the
market more difficult to gauge.

Source: Reuters