The Gold Report: With development capital still at a premium, are companies with critical metals projects getting financed? What typically gets financed and what doesn’t?
Luisa Moreno: The financing environment for the mining space is still difficult, and that is no different for the critical metals equities. Nowadays, the mining and related processing projects that are more likely to get financed are those that are close to production, have relatively low capital requirements, have competitive production costs, have offtake agreements or will be selling into metals markets that have seen prices stabilize and have solid demand.
TGR: In July 2011, you produced a tantalum and niobium primer for Jacob Securities Inc. Reading through that report again, little has changed. What makes these metals newsworthy now?
LM: Tantalum has major applications in electronics that are used in nearly all devices that we have in our homes. Niobium is a major metal in the production of high-performance steel. Tantalum mine production fell by more than 50% in late-2008 and 2009 affected in part by the recession, and it never recovered. More than 90% of the world’s niobium is produced in Brazil, and although Brazil is not considered a hostile jurisdiction for mining, niobium was listed by the European Union as a critical metal given its geographic risk profile. To mitigate potential risk, end users are eager to find stable niobium supplies in stable countries. Both tantalum and niobium are highly strategic, critical and relevant. It’s important to continue to develop new projects.
TGR: The gorilla in the niobium market is Companhia Brasileira de Metalurgia e Mineração (CBMM). How does it affect smaller niobium players? Is it likely to play the role of acquirer?
LM: CBMM’s production accounts for more than 85% of niobium supply. The company is the lowest-cost producer; its grades are …read more