Tungsten is used in lightbulbs and to harden steel found in weapon

Tag : tungsten
Andy Haslam, managing director, told Reuters in an interview on Wednesday the mine, located in north-easternAustralia, will cost about $45 million ($US40.2 million) todevelop.
"We hope to finish our bankable feasibility study by Octoberthis year and be in production in 2010," Mr Haslam said."Once the feasibility study is completed, we will look to thebanks for funding."
The rate of production is well under an initial target of 4,000tonnes per year, which was scrapped earlier this year.
Mr Haslam blamed the revision on the pressure of rising costsassociated with digging more ore linked to the major appreciationof the Australian dollar during the study period, which also drovethe Australian dollar equivalent price of tungsten down by about$70 per metric tonne unit (mtu).
Tungsten, a metal with the highest melting point, is used in lightbulbs and to harden steel found in weaponry, drilling and otherhigh-strength applications.
It has sold for about $US250 per mtu, or $US25,000 per tonne since2005, up from about $US80 per mtu, or $US8,000 per tonne in 2004.
Watershed is a large but relatively low-grade deposit, meaninglarge amounts of tungsten-bearing ore must be mined to yield themetal.
Only one other tungsten mine exists in Australia, the smallerWolfram Camp lode, which is owned by Queensland Ores Ltd andcommissioned in mid-August.
Two other mines, one in Tasmania and owned by King Island ScheeliteLtd and the other in the Northern Territory, owned by Thor Miningare in early development stages.
"Australia is not a big player on the world tungstenstage," Mr Haslam said.
At the maximum rate of production, Vital will supply about two percent of the world market for the metal, he said.
China is the world's main supplier of tungsten, but many of itsmines are getting old and yielding less rich ores for processing,said Mr Haslam.
"That, coupled with a 10 percent tarrif on tungsten exports,is reducing China's overseas shipments, he said.
"At the same time demand is growing, the Chinese government istightening its environmental controls on new mine development,meaning it is taking longer to bring new supplies there on line.
Outside of China, established suppliers also are finding itdifficult to maintain production as their mines are worked down,all of which threatens to curtail supplies needed to feed a 85,000tonne-per-year global market, Haslam said.
"Demand is growing at five per cent per annum and our ownresearch points to prices rising as a result," Mr Haslam said.
Over the next five years, tungsten prices should reach around$US300 per mtu, he said.