‘Low-cost’ mine is just $500 million

Oriental Mineral Inc., a Canadian mining company, may spend $500 million reopening a molybdenum and tungsten mine in Korea to benefit from rising prices for the minerals.
Initial drilling at the Sangdong mine is scheduled to be completed by March 2008, Chris Sennitt, vice president in charge of exploration at the Calgary, Alberta-based company, said yesterday by telephone in Seoul. Once the world’s largest tungsten mine, it produced 600,000 metric tons of tungsten a year between 1947 and 1992, the company said on its Web site.
Prices of molybdenum, used to strengthen steel and prevent corrosion, have risen 13 percent in the last six months, driven by demand from makers of stainless steel in China. Tungsten is used to make filaments in light bulbs.
“It is the lowest cost mine project in the world,” Oriental Mineral’s Sennitt said. “Prices of minerals are good. We’d like to fast track it.”
Oriental Mineral, which owns 100 percent of the mine, plans to complete an initial study into the project by the end of next year, he said. It’s studying a plan to build a plant in 2009 to process 50,000 tons a day of minerals, including tungsten and molybdenum concentrates, he added. The company has a market value of $111 million.
The mine, southeast of the capital Seoul, may hold 16 million tones of probable reserves of high-grade molybdenum, Sennitt said. Molybdenum accounts for 1 percent of the volume of the raw materials used to make stainless steel, and 20 percent of the value because of its price.
Korea is the world’s fifth-biggest steelmaking nation.