Molybdenum

Content maintained by Roy Towner

• Molybdenum
• Resources
• Accessible EDR
• JORC Reserves
• Exploration
• Production
• World Ranking
• Industry Developments

Molybdenum (Mo) is used in steels and superalloys to enhance strength, toughness and corrosion resistance. The main commercial source of molybdenum is molybdenite (MoS₂) but it is found also in minerals such as wulfenite (PbMoO₄) and powellite (CaMoO₄). Molybdenum is mined as a principal ore and is recovered as a by-product or co-product of copper and tungsten mining.

Australia’s Economic Demonstrated Resources (EDR) of molybdenum rose by about 17% from 276 kilotonnes (kt) in 2009 to 324kt in 2010. The bulk of the increase occurred at Ivanhoe Australia Ltd’s Merlin deposit in northwest Queensland (Qld) with a small increase in South Australia (SA). Western Australia (WA) has Australia’s largest molybdenum EDR with about 68%, followed by Qld with 30% and the remaining 2% is in the Northern Territory (NT) and SA.

Subeconomic Demonstrated Resources (SDR) account for about 74% of the total Demonstrated Resources with Qld accounting for 91% of SDR followed by WA with 9%.

In 2010, both the Paramarginal Resources and the Submarginal Resources remained unchanged from 2009 at 905kt and 5kt respectively.

Inferred Resources of molybdenum increased by 31% from 462kt in 2009 to 607kt in 2010 as a result of increased resources at Anthony and Julia Creek deposits in Qld. Queensland and WA account for 71% and 26% of Inferred Resources respectively.

All of Australia’s EDR of molybdenum is accessible.

Joint Ore Reserve Committee (JORC) Code reserves comprise total molybdenum in Proved and Probable Ore Reserves as defined in the JORC Code. In 2010, JORC Code reserves of 220kt (unchanged from 2009) accounted for approximately 68% of Accessible Economic Demonstrated Resources (AEDR).

Data on exploration expenditure for molybdenum are not available nationally.

Further drilling by Ivanhoe Australia Ltd at the Merlin molybdenum-rhenium (Re) deposit in northwest Qld has resulted in increased resource at a cut-off grade of 0.3% Mo comprising Indicated Resource of 6.5 million tonnes (Mt) at 1.34% Mo, 23.3 parts per million (ppm) Re, 0.33% copper (Cu), 8.3 grams per tonne (g/t) silver (Ag) and Inferred Resource of 0.2Mt at 0.85% Mo, 15.1ppm Re, 0.44% Cu, 8.2g/t Ag. The Merlin deposit consists of high-grade molybdenite in a breccia zone within shales which are overlain by discrete copper and zinc rich polymetallic sulphides zones of the Mount Dore orebody. The Merlin deposit is the world’s highest grade molybdenum and rhenium deposit. The company announced that further drilling on its Cloncurry tenements resulted in additional high-grade intersections. At the southern end of the Merlin deposit, high-grade molybdenum mineralisation was encountered close to the surface at Little Wizard. The company reported an Indicated Resource for Little Wizard of 15 000 tonnes grading 6.49% Mo, 83.9ppm Re, 2.3% Cu and 25g/tAg

Following drilling campaigns conducted between 2008 and the end of 2010, Aussie Q Resource Ltd announced a revised resource for its Greater Whitewash molybdenum-copper project near Monto in central Qld. Using a 425ppm MoEq¹ cut-off grade, the company reported an Indicated Resource of 185Mt grading 263ppm Mo, 1189ppm Cu for 49kt of contained Mo and 2200kt contained Cu, and an Inferred Resource of 56Mt grading 239ppm Mo, 1123ppm Cu for 13kt of contained Mo and 63kt contained Cu. The project comprises the Gordon’s, Whitewash and Whitewash South prospects which are a single contiguous system, Windmill Hill prospect located to the south on the same strike line, and the Whitewash Southwest prospect which is located west of the Whitewash South prospect. Mineralisation in the Greater Whitewash project occurs as veins within molybdenum-copper porphyry confined wholly within the granodiorite.

In September 2010, Zamia Metals Limited reported a JORC complaint Inferred Resource of 132Mt grading 0.04% Mo at a cut-off grade of 200ppm Mo for 118 million pounds of contained Mo for its Anthony molybdenum deposit, north of Clermont, Qld. The deposit is a porphyry molybdenum system in which the molybdenite occurs in veins cutting altered igneous rocks and the surrounding schists. The deposit is oxidised to a depth of 60 to 80 metres. In February 2011, the Inferred Resource was updated to 173Mt grading 0.43% Mo at a cut-off grade of 200ppm Mo for 163 million pounds of contained Mo.

Havilah Resources NL reported a combined JORC compliant Indicated and Inferred Resource of 11.3Mt grading 0.89% Cu, 0.64 g/t Au and 500ppm for 5.68 million kilograms of contained Mo for its North Portia deposit located 30 kilometres (km) north of its Kalkaroo deposit in SA. The vein and breccia style of mineralisation at the North Portia deposit is hosted in a 150 metre sequence of carbonate-rich weakly metamorphosed siltstones and shales.

There was no molybdenum production in Australia in 2010.

According to United States Geological Survey (USGS) data, world economic resources of molybdenum in 2010 are estimated to be about 9800kt with China holding 44% of the resources followed by the USA with 28%, and Chile with 11%.

The USGS estimates that world molybdenum production in 2010 amounted to 234kt compared with 221kt in 2009. China, the USA, Chile and Peru accounted for about 86% of global outputs in 2010 with China producing 94kt, followed by the USA with 56kt, Chile with 39kt and Peru with 12kt.

World molybdenum price soared in 2007, reaching a high of US$38 per pound (lb) in September 2008 from a low of about US$5/lb in 2001. After the global financial crises in October 2008, the averaged price declined sharply to US$8/lb and continued at that level through the first half 2009. This led to a tightening of global supplies as many companies ceased operation. However, increased demand from China, Japan and Korea resulted in prices increasing, with the average price from the second half 2009 to September 2010, fluctuating from US$15 to US$18/lb.

Metallic Minerals Limited’s Wolfram Camp tungsten-molybdenum project 90km west of Cairns in Qld has been under care and maintenance since late 2008. In early 2011, the company’s 76% owned-subsidiary, Planet Metals Limited completed the sale of the project to Deutsche Rohstoff AG (DRA). DRA is planning to restart production at the Wolfram Camp mine by the end of 2011. Full-scale production at a maximum annual output of 2400 tonnes of 65% WO₃ concentrate (equal to 1230 tonnes of pure tungsten) and 166 tonnes of 50% Mo concentrate is expected to be achieved in 2012. The project has resource estimate of 1.42Mt grading 0.6% tungsten oxide (WO₃) and 0.12% Mo. This comprises 0.78Mt grading 0.56% WO₃ and 0.13% Mo in the Indicated Resource category and 0.64Mt grading 0.65% WO₃ and 0.11% Mo in the Inferred Resource category.

Moly Mines Ltd has completed its engineering works feasibility study on its Spinifex Ridge project about 50km northeast of Marble Bar in the Pilbara region of WA. The project comprises a 10 million tonnes per annum (Mtpa) operation utilising an ore head grade of 0.07% Mo and 0.11% Cu, at a proposed capital set-up costs of between $528 million and $558 million. The company, through its major shareholder Hanlong Mining Investment Pty Ltd and supported by the Hanlong Group from Sichuan, China, was working towards the completion of all financing arrangements through the China Development Bank by the end of 2011.The project has a combined Proven and Probable Reserves of 451Mt grading 0.05% Mo, 0.08% Cu and 1.3g/t Ag.

Thor Mining PLC announced that it was re-examining its 2007 Definitive Feasibility Study on its Molyhil tungsten-molybdenum project, 250km northeast of Alice Spring in the NT following the significant improvement in tungsten prices. The revised study, which will focus on contract provision of infrastructure and services where practicable, is expected to be completed in the December quarter of 2011. If the study has a favourable outcome, the company may initiate developmental activities during 2012. The project has a reported total Proven and Probable Reserves of 2.21Mt grading 0.47% WO₃ and 0.21% MoS₂.

In September 2010, Ivanhoe Australia Ltd started work on a portal, a 2.4km long decline and 0.5km access cross cuts and drives into the Merlin deposit. The highest ore values for the deposit occur from 150m to 500m below the surface. The deposit is contained within the Mount Dore Mining Leases with a Plan of Operation that allows mining development to commence. A pre-feasibility study is due to be completed by end of 2011 after a Scoping Study on the Merlin deposit indicated that, for an initial 9-year mine-life operation, the project could produce about 5300 tonnes per annum (tpa) of Mo and 7.5tpa of Re for an initial capital cost of $319 million.

Ivanhoe Australia Ltd expects to access the Little Wizard orebody from the Merlin decline. This high-grade resource was not included as part of the Merlin Scoping Study and, as such, provides a significant upside financial opportunity for the company’s Merlin development plan. The mineralisation consists of massive coarse-grained molybdenite which may be readily upgraded to a marketable grade molybdenum-rhenium concentrate by crushing and using either gravity or flotation processes. This high-grade concentrate could be sold to a toll roaster capable of maximising the rhenium recovery and payable metal.

Following the improvement in molybdenum prices D’Aguilar Gold Limited, through its subsidiary Barlyne Mining Pty Ltd, has begun reassessing its Anduramba molybdenum project, 150km west of Brisbane, Qld. The deposit contains a JORC compliant Indicated Resource of 21Mt grading 567ppm Mo, 5.68ppm Ag and 159ppm Cu, and an Inferred Resource of 10.6Mt grading 488ppm Mo, 2.81ppm Ag and 94ppm Cu.

Zamia Metals Limited plans to complete a scoping study for the molybdenum mining and processing operation by the end of 2011 and is carrying out metallurgical test on both the sulphide and the oxide material at its Anthony deposit to determine the optimum processes for producing saleable products.

1. MoEq = Mo + Cu/3.8 + Ag*28.8 based on the following metal prices of Mo of US$37150/t, Cu of US$9781/t and Ag of US$33.38/troy oz.