Just before Christmas, North American Tungsten announced that it had concluded a series of strategic agreements, including a joint venture, to produce and market commercial tungsten products manufactured from concentrate at its mining operations. This importance of the announcement should not be underestimated, as it completed the transformation of North American Tungsten from a mining company to a more vertically integrated tungsten business.
The announcement was the result of three years of North American Tungsten's involvement with Tundra Particle Technologies (TPT), at a pilot plant in Minnesota that has developed and tested patented techniques to produce tungsten powders and intermediates from low grade concentrates. TPT sister company Tundra Composites (TC) has further developed a patented process for manufacturing tungsten composites, a process that North American Tungsten has been granted access to through a licensing agreement.
So what does all of this mean? It means that North American Tungsten has opened up another value add for its product inside North America. North American Tungsten and TPT have formed Diversified Industries LLC (TDI), and will each hold 43.2 percent in the venture, with Queenwood Capital Partners LLC of Bloomington, Minnesota, owning the remaining 13.6 percent. Diversified Industries in turn will be supplied, under a five year agreement, with 22,500 metric tonne units of tungsten concentrate, increasing the annual supply to 225,000 MTUs by 2013 from North American Tungsten.
TDI in turn is in the process of entering into a supply agreement with US ammunition maker Fiocchi to sell TUNDRA tungsten-polymer composite. TDI and Fiocchi intend to initiate the manufacture and sale of TUNDRA tungsten-polymer composites into the ballistics marketplace in the first quarter of 2009.
The deal will not only give North American a new customer, but it will also benefit in a value-add to its product generated through sales at TDI, in which it will hold a 43.2% interest.
North American Tungsten's Chairman and CEO, Stephen Leahy noted, "The success of our involvement with TPT has enabled us to move our output up the value chain, broadening our company from a producer of tungsten concentrate into a supplier of valued-added products intended for a 21st century marketplace. The TPT patented conversion process can utilize a much lower grade of tungsten concentrate than today's other tungsten processors require. North American Tungsten will have a significant outlet for lower grade concentrate.
"This whole concept of our involvement in new material processing options and participation in this new high tech tungsten composite business has been a long time coming. The ability of the company to provide low grade flotation concentrate at market pricing will not only position NTC at the forefront of new markets for tungsten, but will also provide new outlets for our low grade tungsten concentrate production well into the future."
"This is a historic launch of a revolutionary material that I believe will soon become the fastest growing segment of the tungsten market and will complete our objective of becoming a vertically integrated tungsten producer."
North American Tungsten is the Western World's largest producer of tungsten concentrate, a strategic industrial metal required in a wide variety of products ranging from jet turbine engines and high-speed cutting tools to electronic circuitry and surgical instruments.
No comments:
Post a Comment