Australia rhenium find may lift world supply by a fifth
By James Regan
SYDNEY, Dec 9 (Reuters) - World supplies of rhenium, a little-known silvery metal with an ultra-high melting point, may soon rise by about a fifth if a discovery in Australia this week is exploited.
Rhenium so far is proving highly resistant to the global bust in commodities prices given its relatively sparse supplies.
Analysts said a find by Ivanhoe Australia Ltd (IVA.AX) of high-grade rhenium in northeastern Australia could add around 10-12 tonnes to the world supply pool of around 50 tonnes per year.
"It wouldn't kill the market, though you might see a slight drop," said UBS analyst Jo Battershill.
World prices of rhenium, first identified in 1925, have been consistent around $350 an ounce, in sharp contrast to dramatic falls in prices for other steel alloying metals such as zinc, nickel and tin.
Ivanhoe said it had confirmed a zone of high-grade molybdenum and rhenium mineralisation and that drilling had "significantly extended the mineralised zone" and also returned exceptionally high-grade rhenium assays.
"Preliminary project studies are under way to evaluate possibilities for the development of suitable mining and processing facilities," it said.
Ivanhoe Australia is controlled by Canada's Ivanhoe Mines (IVN.TO), whose executive chairman, Robert Friedland, is credited with discovering the Voisey's Bay deposit in Labrador, one of the world's largest nickel mines.
Rhenium was never targeted by speculative investors like hedge funds in the same way as other commodities and avoided the heavy liquidation that has knocked other metals, traders say. Most of the rhenium mined each year comes as a by-product from molybdenum mines in the United States, Chile and Kazakhstan, meaning there was little threat of a supply glut, Battershill said.
Molibdenos y Metales SA of Chile (Molymet) MOL.SN is the world's largest producer of primary rhenium, accounting for about two-thirds of total supply, though Molymet's main product is molybdenum.
Molybdenum prices have dropped to around $10 a pound from $30 in October, which if leading to production curtailments would also cut rhenium supplies.
Major buyers of rhenium include aircraft engine manufacturer Rolls-Royce (RR.L) and General Electric (GE.N). Engines made with rhenium alloys can run at higher temperatures, and consequently burn less fuel. (Editing by Ben Tan)
