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

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