GMO

he analysts and experts say that there’s a lot of molybdenum “ore” in the world these days. That’s true, but if they mean ore in the ground, which the trade calls “reserves” then this is really misleading information, because whether there are 12 million tonnes of reserves as the International Molybdenum Trade association estimates or 19 million tonnes as the United States Geological Survey estimates no one is estimating how much of these reserves are easily recoverable at current and projected prices. The fact is that the world is probably awash in ore concentrates, because the run up of molybdenum prices since the American dot.com bust of 1999, and the coincidentally huge expansion of global markets for consumer goods, has channelled money into:

1. The reopening of old mines unprofitable at pre-1999 prices;
2. The development of previously marginal new mines;
3. Exploration and discovery;
4. The “rediscovery” by gold and copper miners of molybdenum in their ore bodies that were ignored when molybdenum was cheap, and;
5. Last, but not least, the almost complete shift or molybdenum ore smelting and refining to mainland China due to the American environmental lobby’s total success at shutting down the American molybdenum smelting and refining industry.

This last factor comes into play when you note the fact that although the world is awash in molybdenum ore concentrates, including essentially all such concentrates produced in the U.S., the Chinese government has recently been shutting down some of its smelting and refining capacity for “environmental reasons.” This has been a main factor in maintaining the global molybdenum price. The Chinese are getting very good at protecting their national interests in the global commodity market.