Wednesday, September 9, 2009

H.C. Starck Canada announced expansion will move forward to accommodate increased tungsten production

Written by CATHY DOBSON   Source - The Observer

A glimmer of hope that the economy may be improving was offered up by H.C. Starck Canada Tuesday when officials announced an expansion will move forward.

Construction started in 2008 on a new building to accommodate increased tungsten production but no equipment was installed, said facility manager Carol Gilmurray.

Instead, the multi-million-dollar expansion plan was abandoned in March because economic indicators were so discouraging, she said.

At the time, the decline in the North American tungsten powder market put the project on ice, she said.

"But now we see some small signals, they call them small, green shoots, that give us hope that a recovery is on its way.

"We want to be ready when it arrives," Gilmurray said.

Tungsten carbide is used to make drill bits.

This is the first major expansion for H.C. Starck Canada, which was established in 1996 and has a staff of more than 30 people working at its Vidal Street plant.

It's possible that additional technical staff will be needed once the new building is outfitted and production begins.

Sunday, September 6, 2009

Russian workers in a tungsten fabrication plant in the Primorye region staged a hunger strike

By KARINA IOFFEE - Source Associated Press

YASNOGORSK, RUSSIA — Three decades ago, the Yasnogorsk Machine-Building Factory stamped out thousands of pounds of steel and iron into parts for wagons, pumps and locomotives for Russia's mining industry.

Now two-thirds of its stamping and welding machines have been shut down. The old Soviet-era equipment is rusting, and fewer than 280 employees clock in every day — from a peak of 7,000. The factory that kept this town alive since the days of the czar is on its last breath, the victim of a global recession that has shaken Russia to the core.

Yasnogorsk is one of about 500 communities across Russia built around a single company, whose very existence hangs by a delicate thread. The challenges such "monocities" face are compounded by the legacy of the Soviet era, as well as deep-rooted Russian traditions that make it hard to start over somewhere else.

"What's happening in our town is not capitalism," said Alexander Gorbachev, a 59-year-old mechanic previously employed at the factory, who now works at a small machine shop.

To help keep food on the table, Gorbachev (unrelated to the former Soviet leader) does what millions of Russians did during earlier times of trouble: He grows his own potatoes, beets and other vegetables and sells the rest at the market. "It's like we're in medieval times again."

Russia's unemployment has risen to 8.3 percent, and industrial output declined by more than 14 percent in the first seven months of the year compared with 2008.

In Gus Khrustalny, 100 miles north of Moscow, workers at the local decorative glass factory were paid with the crystal vases they made because the company had no money.

In April, workers in a tungsten fabrication plant in the Primorye region staged a hunger strike after they weren't paid for months. And in Yasnogorsk, factory employees estimate they are collectively owed about 6 million rubles ($200,000) in back wages.

These towns all saw their peak in the Soviet era, when a few plants would produce, say, all the Soviet Union's tires. The whole system lurched along guided by a massive bureaucracy of central planners rather than market forces.

But in 1991, after 70 years of Soviet rule, the huge, clanking structure collapsed. Some factories simply closed their doors. Others were purchased for a pittance by a generation of future young billionaires, now called oligarchs, who milked them for profits rather than investing in them.

"We've seen that all those factories that were privatized eventually went bankrupt," said Nikolai Medvedev, 55, who has worked at the Yasnogorsk plant for more than 30 years, sharpening metal parts. "The management is bad, because the owners who buy the factories don't really care about Russia. Their souls are in the West."

Many Russian industries have benefited from the privatizations, with more efficient companies that offer employees competitive wages. But others have been unprofitable for decades and are still simply limping along.

In Yasnogorsk, the factory opened in 1895 and expanded over the years in this town of 18,000 people. Along with jobs, the factory provided social services — everything from medical treatment and child care to family holidays at a local resort.

In 1991, factory owners gradually cut back on these services. In the past six years, the factory has changed owners at least twice, and recently went bankrupt for the second time.

Now children sit at home, alone, and parents worry they will turn to drugs or petty crime. Doctors and other professionals have fled the town, so residents are forced to travel close to an hour to see a pediatrician or an optometrist.

The park in the center of town, with its once-proud Romanesque Palace of Culture, is a seedy wasteland, its cultural center in shambles, its fountains broken and trash and bottles littering the paths.

Residents say their town is slowly dying.

"There is no future for my kids here," said Sergei Ovsyanikov, a father of two and a plumber at the factory. "They will probably have to leave once they grow up."

Ovsyanikov knows it's only a matter of time before his own job is eliminated.

He could take part in government retraining programs or look for work in Tula, a medium-sized city 40 minutes away by train. Some of his laid-off co-workers already commute daily to Moscow, three hours each way. Although he is only 35, he says he is too old and too tired to retrain, relocate or make a long journey to work every day.

"It's just too hard," he said. "If I get fired, then I'll do what I have to do. Now I'm just waiting."

Nikolai Petrov, an expert on regional issues at the Carnegie Moscow Center, said being unemployed is different for workers in Russia than in many other industrialized nations.

"In Western Europe, if you lose your job, you just move somewhere else, but in Russia that's not an option for most people," he said.

Many people who moved to Siberia and the Far East during the Soviet era, when they were paid premium wages, found themselves unable to return west to what is sometimes called "mainland" Russia after the Soviet collapse.

"Just selling your apartment in a town that is economically depressed is impossible. And even if you do manage to sell it, the money you receive is not enough to buy housing in a larger city where there might be work," Petrov said.

Economists say some monocities would be in better shape if Russia had made the massive investment needed to phase out antiquated industries and create a modern capitalist economy. Too much of Russian industry, some say, is still state-owned and managed.

Yevgeny Yasin, a former economics minister and director of the New Economics School in Moscow, said Russia's government uses protectionist and other measures to keep a strong grip on the country's privately owned industries. Company managers, he said, haven't learned how to survive in the open market. "The social mechanism must change," he said.

Management at the Yasnogorsk Machine-Building Factory, which took over from previous owners just three years ago, said it is trying hard to attract new business, even taking orders it would have rejected in the past.

"The crisis dictates its own rules," Nikolai Dupak, general director of the factory, said in a written statement. "We had big plans to diversify our production, but we didn't have time to realize them...But we have a commitment to our workers and it's our goal to make sure they get paid all they are due."

Besides the drop in orders, the factory was slapped with a fine of almost $2 million from the regional government for what Dupak called a "bookkeeping error," which Yasnogorsk Machine-Building has not been able to pay. Officials from the region did not answer repeated requests for comment.

The federal government has helped industries limp along, with subsidies and tariffs. But many workers want Moscow to do more.

Several in Yasnogorsk said they hope Prime Minister Vladimir Putin will drop in on them, like he did on another small, economically depressed town near St. Petersburg in June. There, Putin reprimanded the owner of one shuttered factory for poor management and ordered him to sign an agreement to pay back wages.

In the meantime, patience is wearing out.

"I pay my taxes and do everything I'm supposed to," said an exasperated Ovsanikov. "But I don't feel like life is getting any better. In fact, it's getting much worse."

Friday, September 4, 2009

Geodex Minerals Moves One Step Closer To A Prefeasibility Study On The Sisson Brook Tungsten-Moly Project In New Brunswick

By Alastair Ford

Autumn, as the Brits have it, or fall, as they say in Canada, looks like being an interesting time for tungsten development company Geodex Minerals. Over the summer Geodex completed a further round of drilling at its Sisson Brook tungsten-molybdenum project in New Brunswick. This consisted of 4,900 metres drilled out in 28 holes, and was designed to bring much of the inferred material at Sisson Brook into the measured and indicated categories. The results from that drilling will hit the market in the coming months, and if they live up to the company's expectations they'll be part of the basis for a prefeasibility study on Sisson Brook. A resource upgrade is due out in October.

After that the next step, says new chief executive Mark Fields, will be to raise the money for that study. This, he estimates, will cost in the region of C$1.7 million. As far as raising the necessary funds to get started goes, Mark explains that there have been some preliminary discussions, but says that the work in earnest will begin after the Labor Day holiday is over. That's when the Canadians really go back to work after the summer, ready for the fall trading season.

One issue that Mark and the markets will have to address is the company's share price. At C$0.115 per share Geodex is trading a long way off the C$0.40 level it was at a year ago. There's been some evidence of the recovery that many of the world's mining juniors have enjoyed this year, in that the company's shares are now the better part of 50 per cent up on the 52 week low of C$0.075 that they hit at the nadir. Still, tungsten can be a hard sell, even in the face of strong demand from steadily increasing Chinese and global infrastructure spend, and Geodex is some way from production yet. That it'll need a further C$15 million or so after the prefeasibility is completed for the full feasibility, and a further US$341 million to build the project also goes some way towards explaining a certain level of scepticism. The company's market capitalisation is only just north of C$10 million.

But Mark Fields knows all this. He's run development stage assets before, and successfully too. He wouldn't, he says, have joined Geodex, if he didn't believe in the story. He's had plenty of time to check it out, given that he's had long acquaintance with founders Jack Maris and Jack Marr, and that he's been a shareholder for some time too. The release of the company's preliminary economic assessment for Sisson Brook (otherwise known as a scoping study), does, he says, confirm the company's transition from an exploration company to a development stage company. With that in mind, he adds that it's unlikely that the release of any of Geodex's individual drill results this fall will move the company's shares. With over 46,000 metres of drilling now completed, those days are gone. But a positive move towards a prefeasibility study, on the basis of a strong resource upgrade would be another matter. That might be enough to shift Geodex's shares high enough for it to be willing to bear the pain of further dilution without too much complaint.

With the recent unfreezing of the capital markets, the ongoing health of the Chinese economy and the ratcheting up of US infrastructure spend, there's certainly plenty to whet the appetites of investors. The tungsten price is weaker now than it was a year ago, but, like Geodex, it's off its lows. And in the preliminary economic assessment Geodex demonstrated that it had 91 million tonnes at a grade of 0.125% WO3 equivalent in the measured and indicated categories. And, if this month's drilling delivers, there ought to be more to add to that.

Looking further ahead, at the moment the plan is for Geodex to bring in a partner on its own terms, when the funding requirements start to get more onerous. Such a partner would likely be an end-user of tungsten rather than a fellow miner - one looking to secure supply. "We've had some pretty close discussions with potential off-take users", says Mark. But Geodex won't rush into such a commitment until it's got all its ducks in a row. And once the autumn/fall is over, we'll know a lot more about how things stack up.

Source Minesite

Wednesday, September 2, 2009

Tiberon's Tungsten mining license may be revoked

Vietnam will probably revoke the license for a Tiberon Minerals Ltd. mining project, which may hold one of the world's largest tungsten deposits outside China, because of delays, the government said Tuesday.

Vietnam's Prime Minister Nguyen Tan Dung has instructed the Ministry of Natural Resources and Environment and the government in the northern Thai Nguyen province, where the mine is located, to examine the US$147 million Nuiphaovica project and "terminate its investment and mining licenses if any violations are found," according to a statement on the cabinet's website.

"We haven't received any official announcement from the Vietnamese government and so we have no comment for now," Phan Minh Tuan, a director at Ho Chi Minh City-based Dragon Capital Group, which runs a fund that bought Tiberon in 2007, said by telephone from Hanoi Tuesday.

Tuan, who is also the chairman of the Nuiphaovica venture that developed the mine, estimates the total cost of the project at $400 million.

Tungsten, used in light-bulb filaments and to strengthen steel, may advance to near a record in 2013 as China, the world's biggest producer, is expected to restrict exports to conserve domestic supplies as the country's market faces a deficit, the CRU Group said last week.

Demand from China

Chinese demand will climb 8.1 percent a year from 2009 to 2013, outpacing a 2.7 percent average annual gain in domestic mine production, the London-based commodity research and advisory group said.

Spot prices of the metal have declined 33 percent since reaching a peak of $295 a metric ton unit, or 10 kilograms, in 2005. The spot price in Europe was $197.50 on August 28. Markets were closed Monday.

Toronto-based Tiberon, which got permission to start developing the Vietnam mine in 2004, in October asked the local government to delay starting production until 2010 because of the global financial crisis, Vietnam Investment Review newspaper reported Monday. Tiberon has a 70 percent stake in the mine.

"We informally told Tiberon last week about the possibility of terminating the project and withdrawing its license," Nguyen Duc Minh, head of Thai Nguyen province's Department for Planning and Investment said by telephone Tuesday. "There's no clear plan yet as to how the project will continue, however the prime minister may want to give it to a big state- owned company," he said.

Tiberon in September 2006 said it planned to start production this year. The mine was expected to yield 4,788 metric tons of tungsten, 222,458 tons of fluorspar and 2,038 tons of bismuth a year, according to the company.

Source Bloomberg