Molybdenum... Molymania... Exciting times for some of our super alloy base metals these days it seems. Moly@$35.50 p/lb as I write. Rhenium - the by-product of some Molybdenum deposits (derived from roasting process) - @$1250.00 p/oz. It seems prudent then that we should all have a better understanding of what Moly is and what it can be used for. We have many past, present and future uses of Molybdenum to cover so I shall do so in point form. Also I would like to address the projected future price of Molybdenum as expected by end users and producers thru 2005. Lastly a comparison of primary and by-product Molybdenum production should be made.
Molybdenum typically occurs in skarns or porphyrys. Usually the porphyry deposits are much larger, and thus more economic.
Moly is a soft ductile, refractory metal suitable for alloys requiring high strength, and rigidity at temperatures up to 3,000 degrees F.
Moly itself has a melting point of 4730 degrees F, the 5th highest melt point of all the elements.
The unique properties of Molybdenum alloys are utilized in many different applications
Corrosion resistance and strength in stainless steel, wrought alloys and super alloys. These uses accounted for approximately 75% of Moly consumption in 2004.
High temperature heating elements, radiation shields, forging dies, rotating X-ray anodes in clinical diagnostics, glass melting furnace electrodes, heat sinks for matching silicon for semiconductor chip mounts, interconnects on integrated circuit chips, coatings for piston rings and machine components.
Smoke suppressants & solid lubricants to reduce friction, Moly lubricants ie: grease & oils, engine corrosion inhibitors in coolants, lubricants in space vehicles.
Chemical processing equipment, vessels, tanks & pipelines, flame retardants, dry lubricants, light bulb filaments, inorganic paint pigments, chemical catalysts and desulfurization catalysts.
Non-ferrous alloys (super alloys) or nimonics account for about 3% of total demand for Moly. They are used in jet engine turbines, nuclear plants, gas turbines, space exploration and general aviation.
Nuclear reactor vessels. The reactor vessel serves to contain and support the reactor core and vessel internals. It is constructed of Moly carbon steel, lined with stainless Moly steel and has 8 inch thick walls.
Molybdenum is used for scrubbers in flue gas desulfurization (FGD) in coal fired power stations around the world. 9% to 16% Moly is used in inconel alloys for this process. http://smcurl.com/dguuv
Soil supplement in agriculture as well as human and animal supplements.
Molybdenum alloyed with Rhenium (Mo-41Re & Mo-47.5Re) is used in electronics, space programs & nuclear industries. Moly-25% & Rhenium alloys are used for rocket engine components and liquid metal heat exchangers.
Moly steel is used extensively in the millions of miles of oil, gas and water pipelines around the world. (ie; 2 million mi of oil pipelines in USA and 1.3 million mi of gas pipelines) (source-U.S. Dept of Energy) the EIA in a working paper states that "to meet the U.S. Energy demand for natural gas alone the pipeline mileage must increase by 30% or more. (cost est. $150 b). By 2025 EIA expects the US will need 47% more oil & 54% more natural gas. http://smcurl.com/Y39mb
Now one must consider how many of the pipelines built between 1930 and 1969 (over 2/3 of the current lines in use today) need replacement, and how many 100s of thousands of miles of new pipelines will be needed around the world for our booming oil & gas industry and ever-increasing demands. Consider the refineries and gas plants that need to be built as well. Molybdenum plays a very big part in all of these endeavors.
One of the largest uses of Molybdenum is in drill stem steel tubing. In the 1970's when oil boomed so did the price of Molybdenum rise. The many 1000s of onshore and offshore drill rigs (and service rigs) in the world constantly replace this drill tubing due to heat and metal fatigue, especially with the depths now reached by our technology, and the heat encountered at the greater depths & with the down-hole weight of the drill stem stretching over many thousands of feet. This may be one of the times in history when the demands on Moly won't ease as the frantic search for new oil & gas supplies due to peak oil having been reached will give a new constant impetus to drill exploration.
On the immediate horizon for stainless steel and Moly use also is the fact that new maritime regulations now stipulate that all single hulled oil tankers built before 1987 must be decommissioned by 2010, and thus will be replaced by double hulled tankers. From the information available it appears that 170 vessels will be affected by this law by Apr. 5th 2005, the oil containment tanks in these ships are constructed of a Moly alloy steel also. Coupled with China's maritime fleet building in progress (military and commercial) it looks like a bright future for Moly in this area as well. There are at present about 3,600 tankers in the world. 1/3 of the world's oil is transported by just 435 of them, the large VLCCs (very large crude carriers).
Now to the space age and future of Molybdenum (This is the interesting part)
The SAFE-400 space fission reactor (safe affordable fission engine) is a 400 kWt HPS producing 100 kWe to power a space vehicle using two Brayton Power Systems gas turbines driven directly by the hot gas from the reactor. The heat exchanger outlet temperature is 880 degrees. The reactor has 127 identical heat pipe modules made of Molybdenum. http://smcurl.com/Enc7j
Wall material for space reactors. Thin 99.9% purity Molybdenum foils for use in gas core reactors. Temperature ranges from 1500 to 2000 K.
NEXT generation ION thrusters, currently being developed as well as near term Nuclear Electric Propulsion (NEP) Program. Molybdenum & Carbon. http://smcurl.com/wPBRH
Multi layering in space telescopes with Molybdenum, Carbide and Silicon. TRACE (Transition Region And Corona Explorer) revealing the secrets of the Sun. http://smcurl.com/mpcd2
Molybdenum, Lithium "heat pipe." Los Alamos N.M. A pencil sized tube of Molybdenum, with Lithium core that moves heat from one end to the other may someday allow astronauts to travel to Mars and beyond. The heat pipes on NASA spacecraft will be in groups from 5 feet to 24 feet long. NASA's Marshall Space Flight Center is working to develop heat pipes for use in nuclear reactors to produce propulsion and generate electricity for spacecraft to travel the outer limits of the solar system. Heat pipes have been tested in space from shuttle missions & performed flawlessly. http://smcurl.com/GWMej
Now you can possibly see why the world is viewing Molybdenum in a different light and it isn't just the demand from China, India and developing nations that is driving the price and uses. Moly is truly a metal of the future in many ways and we may never see the same past monetary values placed on it in our future. The era of the second industrial revolution is upon us and it 'is' the 3rd world coming into the 21st century at a very rapid rate that is placing great pressure on base metal demand, but it also is the age of new and ever-changing metal technologies, and I personally think Molybdenum will play a very important part in this new era and will be a major component of any base metal bull market.
If one considers that Moly mines may have a new and more secure future than in the past then one should consider that a "primary pure Molybdenum mine" has no sulfides or copper to leach out of the finished product. The Moly when crushed can be floated off by using a simple soap or diesel fuel additive to the floatation tanks or columns and agitated. The Moly particles adhere to the air bubbles and rise to the surface to be collected (skimmed off). This is a very simple, cost efficient and environmentally friendly process. It is generally accepted that in the Moly by-product production of copper mines, it takes 10 lbs. of CU produced to acquire 1lb of Molybdenum. There are few primary Moly mines at present in the world and fewer still coming to future production.
Let us not forget the adage. "if the whole world had the lifestyle, material comfort and luxuries of the western world, we'd need another planet for the supply of natural resources." Because that transformation is coming fast and the resources are finite, the cost of base metals and energy sources is obviously going to get much more expensive as time & world growth progresses. Mankind's demands on base metals in our future will prove historical.
The 2005 Moly price projection - in a survey done by "Ryan's Notes' in a presentation by Alice Agoo, given in Ryan's Notes' 2005 Molybdenum meeting. This survey was taken from 17 end users of Moly & 20 producers (sellers).
The consensus forecast of each group in the survey is the overall average, as are the combined forecasts.
End users: Mid June /05...$27.39 Year end /05...$16.58
Sellers: Mid June /05...$22.72 Year end /05...$15.31
Combined forecasts Mid June /05...$24.92 Year end /05...$15.84
All references not provided can be confirmed by the author upon request.
Ken J. Reser Investor Relations Consultant Adanac Moly Corp. website(AUA:TSX-V) (PinkSheets:ANCGF) (Frankfurter:A9N) Goldrea Resources Corp. website(GOR:TSX-V) South Pacific Minerals website(SPZ:TSX-V)
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