China to Continue Driving Molybdenum Demand

Roskill Information Services

LONDON, January 27 - Cutbacks by major producers, combined with stockpiling in China, resulted
in a tightening of supply, causing prices to spike in mid 2009. Between July
2009 and August 2009, prices for both molybdic oxide and ferromolybdenum
almost doubled, only to drop by 50% in the next two months.

From November 2009, in line with the general trend in commodity prices,
molybdenum prices have increased, reaching US$15/lbMo by January 2010, an
increase of almost 50%. Nevertheless, with demand expected to rebound in
2010, prices could consolidate at current levels.

China to continue driving molybdenum demand

In 2009, molybdenum consumption is estimated to have declined by as much
as 9%, as end-users curtailed their requirements. Although consumption has
declined on a global level, emerging markets such as China have seen demand
continue to increase in 2009. Chinese consumption is estimated to have risen
by around 5% in 2009.

Chinese consumption will continue to outstrip growth in the rest of the
world, with an annual average rate of 9%py for the next five years, compared
to accumulated growth of 2%py in the developed markets of Europe, the USA and
Japan.

Steel to remain dominant end-use for molybdenum

Molybdenum is consumed mainly as oxide or ferromolybdenum in stainless
and alloy steels, products for which demand has fallen significantly in the
global downturn. Production of stainless steel, which accounts for around 25%
of all molybdenum consumption, has declined sharply over the last two years.
In 2008, output fell by 7% year-on-year, while the first three quarters of
2009 have seen production of crude stainless steel decline by around 15%,
year-on-year.

The fall in production of stainless steel, however, has only taken place
in developed economies. Emerging markets such as China and India have seen
domestic output continue to rise. The first three quarters of 2009 saw
Chinese production up by almost 20% year-on-year, while for the whole year
China is forecast to produce 8-9Mt. However, 2010 is expected to see an
increase in global demand and production, as world GDP recovers. World
production of crude stainless steel is forecast to increase by around 8% in
2010.

After 2010 demand growth is expected to average 4%py, as the various
end-uses for molybdenum consume ever larger volumes.

The drive to reduce carbon dioxide emissions from coal-fired power
stations will require plants running at higher temperatures, resulting in
greater demand for high end molybdenum-bearing steels. The energy market will
play an important role in the future, as the growth in nuclear power
stations, along with drilling for oil and gas in harsher environments, drives
demand for molybdenum containing steels.

Molybdenum shortages could occur

In response to a large withdrawal of demand from the market, molybdenum
producers responded with savage cuts. In 2009, global mined molybdenum output
is estimated to have declined by 12%, following annual average growth of 5%
for the period 2000 to 2008. Surpluses in 2008 and 2009 have been absorbed by
stockpiling, mainly in China. In the longer term, molybdenum demand is
expected to recover and the market may move into deficit by 2014.

With the decline in prices in late 2008, many new mining projects were
slowed or suspended. As there are some forty molybdenum mine projects with
combined capacity of about 170ktpy at some level of feasibility assessment,
longer term supply appears to be assured.

The only new roasting plant outside China that is likely to be
constructed in the short to medium term is that by Molymet at Mejillones in
Chile. This will raise world capacity to more than 270ktpy, which is more
than sufficient on a global basis, but there still may be localised shortages
of roasting capacity.

What will be the likely impact of the LME molybdenum contract?

In February 2010, the London Metal Exchange (LME) will commence futures
trading of molybdenum as part of its move to list minor metals on its
exchange. The plan to turn molybdenum into an exchange traded commodity has
come with mixed reviews. Many producers and consumers have voiced concerns
that prices will become more volatile as a result, while others have welcomed
the news.

So far Molymet is the only company to register its brands of molybdic
oxide, although Jinduicheng Molybdenum, China Molybdenum, and Kwangyang
Ferroalloy have also applied for registration.

Regardless of the platform used, molybdenum prices are expected to remain
volatile, although following an upward trend. In 2010, prices for oxide are
forecast to average US$17/lbMo, rising to above US$20/lbMo in 2011, as strong
demand allows producers to increase prices. Further forward, a deficit could
appear in the market by 2014, taking prices to US$40/lbMo.

    Table of Contents

    1                 Summary
    1.1               Properties, occurrence and processing
    1.2               World supply
    1.3               Consumption
    1.4               International trade
    1.5               Prices

    2                 Properties, occurrence and reserves of molybdenum
    2.1               Properties
    2.2               Occurrence and mineralogy
    2.3               Reserves and resources

    3                 Molybdenum mining and production processes
    3.1               Mining, concentrating and processing
    3.1.1             Technical grade molybdenum oxide (TMO - roasted
                      concentrates)
    3.1.2             Ferromolybdenum (FeMo)
    3.1.3             Other commercial forms of molybdenum
    3.2               Recycling of molybdenum

    4                 World molybdenum production data
    4.1               Mine production
    4.1.1             Mine production by country
    4.1.2             Molybdenum mine production by company
    4.2               Ferromolybdenum production
    4.3               Molybdenum metal and alloys
    4.4               Recycling and regeneration

    5                 Current and forecast molybdenum production capacity
    5.1               Current molybdenum production capacity
    5.1.1             Molybdenum mine capacity
    5.1.2             Roasted concentrate capacity
    5.1.3             Ferromolybdenum production capacity
    5.2               New projects and future supply of molybdenum

    6                 Molybdenum production costs
    6.1               Projected costs for 2009

    7                 Notes on molybdenum producing countries
    7.1               Argentina
    7.1.1             Minera Alumbrera
    7.1.2             Yamana Gold - Aqua Rica Project
    7.1.3             Xstrata Copper
    7.1.4             Tenke Mining
    7.1.5             Other projects
    7.2               Armenia
    7.2.1             Zangezur Copper-Molybdenum Company (Zangezur)
    7.2.2             Agarak Copper-Molybdenum Company (Agarak)
    7.2.3             Yerevan Pure Iron Plant (YPIP)
    7.2.4             Armenian Molybdenum Production (AMP)
    7.2.5             Armenian Copper Program (ACP) - Teghout
    7.3               Australia
    7.3.1             Auzex Resources
    7.3.2             Havilah Resources - Kalkaroo
    7.3.3             Moly Mines - Spinifex Ridge
    7.3.4             Thor Mining - Molyhil
    7.3.5             Queensland Ores Ltd - Wolfram Camp
    7.3.6             Other molybdenum exploration projects
    7.4               Austria
    7.4.1             Treibacher Industrie AG
    7.4.2             Plansee SE
    7.4.3             SEKOM Handelsges
    7.5               Belgium
    7.5.1             NV Sadaci SA
    7.5.2             Other molybdenum processing companies
    7.6               Brazil
    7.7               Bulgaria
    7.8               Canada
    7.8.1             Mine production of molybdenum in Canada
    7.8.1.1           Thompson Creek Metals Co - Endako
    7.8.1.2           Teck Resources - Highland Valley Copper
    7.8.1.3           Roca Mines Inc - Max
    7.8.1.4           Imperial Metals Corp - Huckleberry
    7.8.1.5           Taseko Mines Ltd.
    7.8.2             New molybdenum projects in Canada
    7.8.2.1           Adanac Molybdenum - Ruby Creek
    7.8.2.2           Avanti Mining - Kitsault
    7.9               Chile
    7.9.1             Mine production of molybdenum in Chile
    7.9.1.1           Corporacion National del Cobre de Chile (Codelco)
    7.9.1.2           Antofagasta plc
    7.9.1.3           Anglo American Sur
    7.9.1.4           Cia Minera Dona Ines de Collahuasi
    7.9.1.5           Amerigo Resources
    7.9.2             New molybdenum mining projects
    7.9.2.1           Escondida
    7.9.2.2           Los Andes Copper - Vizcachitas
    7.9.2.3           Teck Resources - Relincho
    7.9.2.4           Quadra Mining - Sierra Gorda
    7.9.2.5           Pan Pacific Copper
    7.9.3             Processing of molybdenum in Chile
    7.9.3.1           Molibdenos y Metales SA (Molymet)
    7.9.3.2           Xstrata - Altonorte
    7.1               China
    7.10.1            Molybdenum resources in China
    7.10.2            Mine production of molybdenum
    7.10.2.1          Jinduicheng Molybdenum Group Co Ltd
    7.10.2.2          China Molybdenum
    7.10.2.3          The molybdenum industry of the Huludao region
    7.10.2.4          Qingtian Jianshi Molybdenum Chemical Co
    7.10.2.5          Sino-Steel Chifeng Jinxin Mining
    7.10.2.6          Sing Horn Enterprise Co
    7.10.2.7          Chaoyang Jinda Molybdenum
    7.10.2.8          Dalian Haiyi Chemistry Co
    7.10.2.9          Jilin Daheishan Molybdenum Industry
    7.10.2.10         Chengdu Molyplus Technologies
    7.10.2.11         Harbin Songjiang Copper Group
    7.10.2.12         Chifeng Haozhou Mining
    7.10.3            New molybdenum mining projects in China
    7.10.4            Molybdenum processing in China
    7.11              Ecuador
    7.12              France
    7.13              Germany
    7.14              Greenland
    7.14.1            Quadra Mining - Malmbjerg
    7.15              Honduras
    7.16              India
    7.17              Indonesia
    7.18              Iran
    7.18.1            National Iranian Copper Industries Co (Nicico)
    7.18.2            Zanjan Bronz Ltd
    7.19              Israel
    7.2               Japan
    7.21              Kazakhstan
    7.21.1            Molyken - Shorskoye
    7.21.2            Other molybdenum occurrences in Kazakhstan
    7.22              South Korea
    7.22.1            Oriental Minerals - Sangdong
    7.23              Laos
    7.24              Mexico
    7.24.1            Minera Mexico
    7.24.2            Molymex SA de CV
    7.24.3            Other molybdenum occurrences in Mexico
    7.25              Mongolia
    7.25.1            Erdenet Corp
    7.25.2            Shim Technology
    7.25.3            Erdene Resource Development
    7.25.4            Other projects
    7.26              Morocco
    7.27              Namibia
    7.28              Netherlands
    7.28.1            Climax Molybdenum BV
    7.29              Norway
    7.3               Pakistan
    7.31              Panama
    7.31.1            Inmet - Minera Petaquilla
    7.31.2            Cerro Colorado
    7.32              Papua New Guinea (PNG)
    7.32.1            CopperMoly - Simuku
    7.32.2            Marengo Mining - Yandera
    7.32.3            Harmony Gold - Golpu
    7.33              Peru
    7.33.1            Mine production of molybdenum in Peru
    7.33.1.1          Southern Peru Copper Corporation (SPCC)
    7.33.1.2          Cia Minera Antamina SA
    7.33.1.3          Freeport McMoRan - Cerro Verde
    7.33.2            New molybdenum projects in Peru
    7.33.2.1          Chinalco - Toromocho
    7.33.2.2          Anglo American - Quellaveco and Michiquillay
    7.33.2.3          Inca Pacific Resources - Magistral
    7.33.2.4          Monterrico Metals - Rio Blanco
    7.33.2.5          Norsemont Mining - Constancia
    7.33.2.6          Northern Peru Copper Corp - Galeno
    7.33.2.7          Rio Tinto - La Granja
    7.33.2.8          Xstrata Copper
    7.34              Philippines
    7.34.1            Metals Exploration - Runruno
    7.34.2            Sagittarius Mines - Tampakan
    7.35              Poland
    7.35.1            Strzelecki Metals - Myszkow
    7.36              Russia
    7.36.1            Resources
    7.36.2            Mine production
    7.36.2.1          Strikeforce Mining and Resources (SMR)
    7.36.2.2          JSC Tyrnyauz GOK (TGOK)
    7.36.3            Other molybdenum occurrences in Russia
    7.36.4            Molybdenum processing in Russia
    7.37              Sierra Leone
    7.38              Slovakia
    7.39              South Africa
    7.4               Spain
    7.41              Sweden
    7.42              Turkey
    7.42.1            Anatolia Minerals
    7.42.2            Stratex International
    7.43              UK
    7.43.1            Climax Molybdenum UK Ltd.
    7.43.2            FMP Metallurgical UK
    7.43.3            Other molybdenum processors and suppliers in the UK
    7.44              USA
    7.44.1            Mine production of molybdenum in the USA
    7.44.1.1          Freeport McMoRan Copper & Gold
    7.44.1.2          Rio Tinto - Kennecott Utah Copper
    7.44.1.3          Thompson Creek Metals Company USA
    7.44.1.4          Montana Resources Inc
    7.44.1.5          Molycorp Inc.
    7.44.1.6          Mercator Minerals Ltd - Mineral Park
    7.44.1.7          Golden Phoenix Minerals Inc - Ashdown Project
    7.44.1.8          Quadra Mining
    7.44.2            New molybdenum projects in the USA
    7.44.2.1          Eureka Moly - Mount Hope Project
    7.44.2.2          Northern Dynasty Minerals/Anglo American - Pebble
                      Project
    7.44.2.3          Galway Resources
    7.44.2.4          Bolero Resources - Bald Butte Project
    7.44.2.5          Other molybdenum occurrences in the USA
    7.44.3            Other molybdenum processors and fabricators in the USA
    7.45              Uzbekistan
    7.45.1            Almalyk Mining and Metallurgical Combine (Almalyk)
    7.45.2            Uzbek Refractory and High Temperature Metals Plant
                      (UzKTZhM)
    7.45.3            Uzmetal Technology
    7.46              Vietnam

    8                 Analysis of molybdenum international trade data
    8.1               Raw molybdenum concentrates
    8.2               Roasted molybdenum concentrates
    8.3               Molybdenum oxides and hydroxides
    8.4               International trade in ferromolybdenum
    8.5               International trade in articles and powder of
                      molybdenum metal
    8.6               Molybdenum waste and scrap

    9                 World consumption of molybdenum
    9.1               Apparent consumption of molybdenum
    9.2               Consumption of molybdenum by use
    9.2.1             Consumption of molybdenum by industry
    9.2.2             Consumption of molybdenum by use in selected countries
    9.3               Consumption of molybdenum by form

    10                Uses of molybdenum
    10.1              Use of molybdenum in steels
    10.1.1            Crude steel production
    10.1.2            Stainless steels
    10.1.2.1          Types and uses of molybdenum-containing stainless steel
    10.1.3            Production of stainless steel
    10.1.3.1          Stainless steel production capacity
    10.1.3.2          Consumption of stainless steel
    10.1.4            Full alloy steels
    10.1.4.1          Types and uses of molybdenum-containing full alloy
                      steels
    10.1.5            Tool and high speed steels
    10.1.5.1          Types and use of molybdenum-containing tool and high
                      speed steels
    10.1.5.2          Production and consumption of tool and high speed
                      steels
    10.1.6            High-strength low alloy steels
    10.1.6.1          Line pipe steel
    10.1.6.2          Automobiles
    10.1.6.3          Construction
    10.1.6.4          Gas containers and pressure vessels
    10.1.7            Carbon steels
    10.2              Catalysts
    10.2.1            Use and types of molybdenum-bearing catalysts
    10.2.2            Producers of molybdenum catalysts
    10.2.2.1          Advanced Refining Technologies (ART)
    10.2.2.2          Albemarle Catalysts & Nippon Ketjen
    10.2.2.3          Axens Catalysts and Absorbants
    10.2.2.4          Criterion Catalysts & Technologies
    10.2.2.5          Haldor Tops0e A/S
    10.2.2.6          Sud-Chemie Group
    10.2.2.7          Other catalyst companies
    10.2.3            Catalyst regeneration and recycling
    10.2.3.1          Catalyst regeneration
    10.2.3.2          Catalyst recycling
    10.3              Molybdenum metal and molybdenum-based alloys
    10.3.1            Types of molybdenum-base alloys
    10.3.2            Applications of molybdenum metal and alloys
    10.3.2.1          LCD panels and solar cells
    10.3.2.2          Lighting industry
    10.3.2.3          Electronics industry
    10.3.2.4          Materials processing and thermal spray coating
    10.3.2.5          High temperatures furnaces and equipment
    10.3.2.6          Glass manufacturing
    10.3.2.7          Aerospace and defence
    10.3.2.8          Nuclear industry
    10.3.3            Producers and fabricators of molybdenum metals and
                      alloys
    10.3.3.1          ALMT Corp. (Allied Materials)
    10.3.3.2          Elmet Technologies
    10.3.3.3          General Electric Consumer Products (GECP)
    10.3.3.4          Global Tungsten & Powders
    10.3.3.5          H.C. Starck
    10.3.3.6          Jing Dui Cheng Molybdenum Group (JDC)
    10.3.3.7          Metallisation
    10.3.3.8          Philips Advanced Metal Solutions
    10.3.3.9          Plansee SE
    10.3.3.10         Polema JSC
    10.3.3.11         Toho Kinzoku Co Ltd
    10.3.3.12         Other companies
    10.4              High-performance alloys (superalloys)
    10.4.1            Types and use of molybdenum-bearing HPA
    10.4.1.1          Nickel-based HPA
    10.4.1.2          Cobalt-based HPA
    10.4.1.3          Iron-nickel-based HPA
    10.4.2            Markets for HPA/superalloys
    10.4.2.1          Aerospace applications
    10.4.2.2          Non-aerospace applications
    10.5              Titanium-based alloys
    10.6              Use of molybdenum in cast iron
    10.6.1            Production and consumption of cast iron
    10.7              Use of molybdenum in greases and lubricants
    10.7.1            Grease production and producers
    10.8              Use of molybdenum in pigments and corrosion inhibitors
    10.8.1            Pigments/corrosion inhibitors
    10.8.2            Corrosion inhibitors
    10.9              Minor uses of molybdenum chemicals

    11                Outlook for molybdenum consumption by product to 2014
    11.1              Stainless steel
    11.2              Full alloy steels
    11.3              Tool and high speed steels
    11.4              HSLA steel
    11.5              Carbon steel
    11.6              Catalysts
    11.7              Molybdenum metal and molybdenum alloy products
    11.8              High performance/superalloys
    11.9              Cast iron
    11.1              Grease and lubricants

    12                Supply and demand of molybdenum

    13                Molybdenum prices
    13.1              Comparison of contract and free market prices, 2007 to
                      2009
    13.2              Historic trends in free market prices
    13.3              Concentrate prices
    13.4              Comparison of European and US prices
    13.5              Outlook for molybdenum prices

Molybdenum: Market outlook to 2014 (10th Edition, 2010) is available at
GBP3500 / US $7000 / 5600 Euros from Roskill Information Services Ltd, 27a
Leopold Road, London SW19 7BB, England.

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