BOOMING steel demand has persuaded Andrew Forrest’s Hibernia Gold to consider developing its Spinifex Ridge molybdenum project.
The project is located about 50 kilometres north east of Marble Bar in the Pilbara.
If the project comes to fruition it could be Australia’s first entry to the 140,000 tonne a year molybdenum market globally.
Studies indicate Spinifex Ridge could produce between 7,000 and 8,000 tonnes a year.
Molybdenum is an important additive in stainless steel production and is also used in the chemical industry, in fertilisers and as a lubricant.
According to a recent Dow Jones report the metal proved to be a crucial part of the profits for Chile’s State-owned copper company Coldeco.
The company lifted its molybdenum production by 27 per cent to 70 million pounds in time to catch a surge in demand from steel mills where the metal has extensive uses.
In an announcement to the Australian Stock Exchange Hibernia says molybdenum’s price had risen 1,000 per cent in the past two years to a 30-year high.
Its announcement says supply is being exacerbated by a shortage of processing capacity.
Open pit mining and processing at Spinifex Ridge loom as the likely production options, thanks to surveys by Hibernia, Snowdens and GRD Minproc.