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Minews
Commodities Date: 23 February 2006
Molybdenum - A Thoroughly Modern Metal
A feature article on Minesite.com by Robert Wallace
Unknown, unrecognized, unpronounceable. That's molybdenum's past. Today, however, the perception of the metal is becoming quite different. In tomorrow's world, innovative, integral and indispensable are more appropriate adjectives for the 42nd element in the periodic table.
We know of molybdenum as a metal. However, "moly" does not occur in its metallic form in nature. Its main mineral, molybdenite, was included in the category of substances known to the ancients as "molybos", Greek for lead-like. Yet it wasn't until 1789 that it was individually identified as an oxide powder by Swedish scientist Carl Wilhelm Scheele. 1n 1782, Peter Hjelm reduced the oxide with carbon to produce a dark metallic powder which he first named "molybdenum", a word that the world has struggled to articulate ever since.
It took over another century for moly to enter commercial use, as an alloy constituent used in the production of the newly-fangled cars and in armour plating. In the 1st World War molybdenum was widely used in alloys alongside tungsten to strengthen the impact-resistance of steel, leading to an intensive search for new sources of the mineral. The huge Climax deposit in Colorado, USA was discovered and first went into production in 1918.
Moly is a common constituent of the earth. Plants take up moly as the molybdate ion (MoO4) especially leguminous crops where the moly aids nitrogen fixation. It is present in us all and molybdenum deficiency in the diet, though rare, causes sulphite toxicity and a variety of symptoms up to coma.
Moly the metal is silvery grey, has high density, a high melting temperature of 2,610ºC and the lowest thermal coefficient of all the engineering metals. Its anti-corrosion and heat-resistant qualities make it more and more useful in today's metal fabrication industries. Moly occurs both as a primary mineral and as a by-product usually associated with copper in porphyry deposits. Mines like Bingham Canyon in Utah and Antofagasta's Los Pelambres in Chile traditionally treat moly as a useful by-product of copper. However in 2005, production of copper at Los Pelambres was reduced by 7.9% while moly output rose 10.9% in response to an average price received of US$32 per pound (2004: US$16.2 per pound).
However it is mined, naturally occurring molybdenum ore needs processing to concentrate (MoS2) which then requires roasting to convert it to molybdenum oxide(Mo03). Downstream roaster plants are either mine- or third party-owned and more are being installed to eliminate current bottlenecks. For stainless steel production, the oxide is further converted to ferromolybdenum.
Around two-thirds of moly used today is an ingredient metal in steel alloys, especially in the make-up of popular grades like stainless steel 316. Moly content ranges from 0.5% to 8% dependent on the ulterior use. Stainless steel is familiar in cutlery and white goods but is increasingly specified for more metal-consuming uses as varied as architectural cladding, metro stations and property interiors. Construction and vehicle trims are now major markets. The metal has found recent special applications, for example as electrodes for electrically heated glass furnaces. The naturally occurring form of molybdenum is also an important solid lubricant. A black powder, Molysulfide (r) (Climax lubricant grade MoS2) is a high temperature lubricant, stable in air to 350°C and in vacuum or inert atmospheres to 1200°C, used in products such as greases, dispersions, friction materials and bonded coatings.
The use of stainless steel has been steadily increasing by some 3-4% a year and the International Stainless Steel Federation has forecast even faster 5.5% annual growth up to at least 2010. Yet apart from a brief peak in 1995, the molybdenum price has remained steady at US$2-5 per pound for decades as mined production has easily kept pace with demand. Then, without a fanfare or even an appreciation in the media, demand suddenly accelerated in 2003 and in 2004. Moly supply and roasting facilities could not react fast enough, leading to a price peak of over US$42 per pound in May 2005. Even now, after substantial increases in production by the US (up 37% in 2004-5 to 57,000 metric tons according to US Geological Survey estimates), Chile (up 10% to 45,500 tonnes) and Canada (up 72% to 9,800 tonnes), it is still around $24 per pound in Europe, twelve times the price it was in 2002.
As usual, the main driver has been China; not only for burgeoning consumer goods manufacture but also to meet that country's rapidly increasing needs for infrastructure. Production in China itself fell from 95 million pounds to 70million pounds in 2004-5 as many small and dangerous mines were closed. In a report for AIM-listed International Molybdenum plc issued last July, consultant CRU Strategies estimated that global moly supplies would total under 350 million lbs in 2005 but be in deficit by between 6 and 26 million lbs on base case and upper case scenarios by 2009 even though world production will by then have risen to 443-475 million lbs respectively.
Looking forward, watch out for the oil and gas industries; they are poised to make significantly higher demands for moly minerals in future. Moly-containing stainless and other non-corrosive steels make up 35% of the offshore oil platforms now being rushed into production around the world. There are an estimated 409,000 miles of existing pipelines to maintain and renew in the US alone, of which half are for oil and gas. Several new long–distance oil or natural gas pipelines like the 2,400-mile, 4-foot diameter Trans-Siberian pipeline are being announced in response to transportation needs for oil and gas to new markets in a changing world for energy. Unconventional plants for fuel refining, LNG, Gas-to-Liquid and oil sands exploitation will also demand substantial amounts of non-corrosive steels in their construction.
The requirement for moly in its metal formats is benefiting from all this activity but a greater influence hydrocarbons could have on moly demand is within chemical catalysts. In oil refineries, moly helps remove organic sulphurs, especially from sour grades of petroleum, reducing sulphur emissions and the consequent threat of acid rain. As sweet crude becomes rarer its use is increasing.
Coal liquefaction is another quite separate increasing development in which molybdenum/iron catalysts play a vital part. China Oilnews reported on 9 February that China, endowed with huge coal deposits but short of oil and gas supplies, is planning to spend US$15 billion to build coal liquefaction plants in the country that should make 16 million tons of oil products from coal. China Chemical Industry News reported the day before that the country would also spend US$10 billion in the next five years to build a large catalytic coal-chemical complex in Shanxi, China's leading coal-producing province, to produce industrial PVC, carbinol and caramide products.
Finally, moly is engaged in some of tomorrow's key technologies, today. Particulate seeds of an iron and moly catalyst are used to sprout nanotubes in nanotechnology research; because of their heat resistance, moly-based alloys are used for casings and parts in nuclear reactors and in turbines; and are specified by NASA for items like heatshields and rocket nozzles in space aeronautics. Various forms of moly are constituents of next-generation fuel cells and hybrid cars.
It may have a long history but this thoroughly modern metal is looking forward to benefiting from the even more exciting future ahead of it.
Robert Wallace is an Investor Relations Director for International Molybdenum Plc.'s
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