12/11/09 Pittsburgh, Pennsylvania – Keep an eye on tungsten. As I’ve mentioned before, tungsten is critical to machine tools and numerous other high-tech applications.
What we’re seeing globally — and what several top-level experts confirmed to me this week in London — is that there are some metals facing looming supply shortages. The days of a user just calling up the supply house and ordering off the shelf are ending. Tungsten is in one of those scenarios just now.
Several of the world’s largest non-Chinese tungsten mines got bought outright this year by tungsten users. The users understand that their supply chain is only as strong as the weakest link. And that weak link is the supply of ore in the ground plus the mine, mill and upgrading facility to obtain the basic raw material.
It’s not like there are a slew of other mines out there waiting for the price to go up so they can open the workings and push product out the door. In the West, there is only LEGACY tungsten mining — mines and mills from years ago. There’s NOTHING new in the pipeline.
If you want to have some exposure to a critical, strategic metal with virtually NO substitute, you need to own some shares of one miner in my Energy & Scarcity portfolio. I’ve met the CEO, and he’s a solid player. He has a working mine, he’s selling product, he has cash flow and he has ANOTHER mine that he’s working to develop. It’s a rock-solid story.
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“It’s a rock-solid story.”
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sure it is