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You are here: Home > Finance > Investing > Rusty Oil & Gas Pipelines Could Drive Molybdenum Price Higher, Part Two |
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Top Articles - Rusty Oil & Gas Pipelines Could Drive Molybdenum Price Higher, Part Two
Molybdenum: Old and New Infrastructure It’s not just new and replacement pipelines, which might create an avalanche of demand for the silvery metal. Molybdenum’s applications are wide, diverse and expanding. The metal is used in paint pigments, lubricants, catalysts and prosthetic legs; the radioisotope Molybdenum-99 is used in cancer treatment. Six-percent molybdenum According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product is also used in stainless steel (S31254) for higher pressure piping in more than 30 desalination plants (sea water reverse osmosis) now operating in ten countries. As abrupt climate change impacts fresh water supplies, a great demand for desalination plants could emerge. Because of the nuclear energy renaissance, condensers in the hundreds of planned and proposed nucle ; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug. Examples of combination products may in r power plants may need up to one million meters of four- to six-percent molybdenum stainless steel. The number of power plants under construction, planned or proposed rises weekly or monthly, and now approaches nearly 300. Aging U.S. reactors could require replacement over the next two decades. About 30 new reactors are in various stages of being moved forward in the U lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together. ited States. Not all will be of the size requiring a vast quantity of molybdenum, but sufficient growth in the nuclear sector should firm demand for the metal. According to a recent article published by IMOA, “Molybdenum containing alloy sales for FGD applications are booming.” The U.S. Clean Air Interstate Rule (CAIR) set a deadline of 2010 for many coal-fired power p here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe ants to install FGD, or Flue Gas Desulfurization, systems. Basically, there are air pollution systems, which remove acid-causing sulfur dioxide from the exhaust gases of coal-fired electrical plants. The nickel-based Alloy C-276, which includes 16 percent molybdenum, is a corrosive-resistant component in piping and component upgrades in Flue Gas Desulfurization (FGD) s d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations. Combination pro stems. During 2006, it was estimated more than $1 billion was spent on molybdenum bearing alloy. IMOA believes that FGD systems could rack up $168 billion in worldwide sales between 2006 and 2020, of which about $15 billion would be used for moly-bearing alloys. This assumes two-thirds of the world’s coal-fired generators install the FGD systems by 2020. On the books, ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc he U.S., China and India propose to build another 800 coal-fired power plants to meet energy needs before 2020. New plants would likely require the FGD systems, which could potentially increase the amount of molybdenum necessitated in the alloy-making process. As energy needs grow, more molybdenum production will be required to bring about increased energy production. easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi Molybdenum has corrosive resistance to many acids – such as sulfuric, hydrochloric, hydrofluoric and many organic acids. Because its melting point exceeds 4700 degrees Fahrenheit, molybdenum acts as a strengthener in the turbine blades and discs of jet engines. It is because of these factors that higher molybdenum percentages may provide the world’s first line of defens nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically against pipeline corrosion in conjunction with the new generation of corrosion inhibitors. Will There Be Sufficient Molybdenum Mined to Meet the Increased Energy Demand? Blue Pearl Mining executive chairman Ian McDonald recently reported that molybdenum prices should remain strong for a “number of years to come.” He cited increased demand and cited underinvestment in and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ the molybdenum sector for a lengthy period. It also costs a fortune to build a new mine – some $500 to $700 million, according to McDonald. “It’s kind of a risky proposition for a commodity you can’t sell forward.” Still the potential hazards – financial, environmental or otherwise, could provide a lucrative proposition for molybdenum mining companies. McDonald’s compa ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi y forecasts annual demand by 2020 to surpass the 700 million pound level. This is more than double the amount of molybdenum mined just a few years ago, when the industry was in the pits and primary molybdenum projects were not economically feasible. The biggest threat to the molybdenum mining industry is ‘price vulnerability,’ which Adanac Molybdenum Corp executive cha ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it. Following aspects would a rman Larry Reaugh warned us in a recent interview. This may help explain why some of the emerging moly mining participants walk on eggshells over the weekly blips on the commodity’s price chart. (The molybdenum price was last trading on March 2nd at $28.25/pound.) Despite the rising molybdenum price, now stabilized above US$20/pound, so few realistic molybdenum mining dd to the challenges in developing combination products: Which markets to tap where the combination products can do fairly well? Which combination prod rojects appear on the horizon. Many of the junior molybdenum miners fret about price vulnerability and the re-appearance of the behemoth Phelps Dodge Climax molybdenum mine in Nevada by 2009. One small-scale imminent Canadian molybdenum miner isn’t fazed by the anticipated molybdenum production coming into the market by 2009. His company plans to plow back cash flow af cts are meaningful and rational? Which therapeutic categories to select? Which Combinations can address unmet needs of the patients? Do combin er mining operations commence this spring, in hopes of expanding his molybdenum deposit in British Columbia, Canada. “We are going to move forward with further exploration as we mine the Max molybdenum deposit,” said Scott Broughton, chief executive of Roca Mines. As are some of the other near-term primary molybdenum producers, Broughton is bullish on the metal’s price. tions increase the patient compliance? What would be the developing cost? How to tackle the risks encountered during combination product developmen According to the January 2007 issue of the IMOA newsletter, the following companies represent some of the new primary molybdenum mine projects, starting this year and running through 2009. Roca Mines (TSX: ROK) should open the Max Moly mine in Canada this spring. The mine site is currently under construction with a small mine permit and should annually produce up to t? As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel hree million pounds. Blue Pearl Mining (TSX: BLE) is presently the world’s largest publicly traded primary molybdenum miner. Its next mine, the Davidson, in Canada is currently going through a feasibility study, and could open as early as 2007. Announced annual capacity could run as high as 10 million pounds. Australian-based Moly Mines (TSX: MOL; ASX: MOL) hopes to c ping new procedures for reviewing their safety, efficacy and quality. Professional from academic institutions, pharmaceutical industries, health care indust mmence mining operations by the end of 2008. The Spinifex Ridge deposit is currently undergoing a feasibility study and could produce up to 20 million pounds annually. Adanac Molybdenum Corp (TSX: AUA) has been advancing the company’s Ruby Creek deposit in Canada’s Yukon, and is nearing the end of its permitting stage. The company’s executive chairman hopes to commence y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products construction this summer, having announced the deposit might produce between 12 and 15 million pounds.
The Climax molybdenum mine, a subsidiary of Phelps Dodge (NYSE: PD), is conditionally approved and could commence mining operations in Nevada as early as 2009. Annual production capacity could range between 20 and 30 million pounds per year. Idaho General’s Mt. Hope . As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de eposit in Nevada is in the permitting phase. The company may be mining in 2009. Estimates indicate the Mt. Hope deposit may produce as much as 35 million pounds per year. In a previous article we reported University of Montana’s Professor Courtney Young’s remarks, “The public doesn’t know where their energy comes from.” We’ll add to his comments – very few Americans kn elopment. They need to be wiser in analyzing the market trends and the regulatory requirements. Companies that provide selfless information through particip w how this energy is transported into their homes, or how great a risk they have of being left out in the cold (Editor’s Note: Special thanks should go to Adanac consultant Ken Reser and Roca Mines corporate development manager Doug Fosbrooke in providing strong research assistance in compiling this report.) COPYRIGHT © 2007 by StockInterview, Inc. ALL RIGHTS RESERVED tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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