Miners aim to cash in on lucrative niobium market with mines in B.C., Nebraska
Particle accelerators such as the Large Hadron Collider near Geneva, Switzerland, are among the biggest users of the rare alloy ferroniobium | Phil Plait
Copper, gold and metallurgical coal – these are the bread and butter of B.C.’s mining industry. Now, with its proposed niobium mine, Taseko Mines Ltd. (TSX:TKO) wants to put some jam on the table.
Taseko recently entered the environmental review process for a proposed new $870 million niobium mine on Steve Creek, a tributary of the Ospika River, 140 kilometres north of Mackenzie, B.C.
Should Taseko’s Aley mine ever be built, it would be one of only four operating niobium mines in the world – unless competitors, such as Vancouver’s NioCorp Developments (TSX-V:NB), can beat Taseko to the punch.
“All of a sudden now, British Columbia has the potential to become one of the very few producers of niobium,” said Brian Battison, Taseko’s vice-president of corporate affairs.
Ferroniobium (FeNb) is something of a supermetal. Rare and valuable, it is light, but strong, highly resistant to heat and has anticorrosive properties. That makes it a valuable alloy in specialty metals, from the fans used in the turbines of jet engines to pipelines and the superconducting magnets used in the Large Hadron Collider.
But there is also a growing demand for it in automobile manufacturing and bridge construction, because very small amounts of FeNb can dramatically lower the weight of steel without sacrificing strength.
“While there is a limited number of producers in the world, there is an increasing demand for the product,” Battison said. “And there will be an even greater increase in demand for the product when [other] suppliers come on stream because it gives metal producers, manufacturers of steel … a greater security of supply.”
There are only three FeNb mines in the world today. One is the Niobec mine in Quebec, which Toronto-based gold miner IAMGOLD (TSX:IMG) recently sold to Magris Resources Inc. for $500 million.
The other major producers are AngloAmerican plc and Cia Brasileira de Metalurgia and Mineracao, both of which have mines in Brazil. Eighty-five per cent of the world’s FeNb comes from Brazil.
Since there is no central exchange for niobium, it’s hard to know just how much it’s worth, since producers sell directly to steelmakers and trading houses, with prices subject to confidentiality agreements.
Taseko’s business plans are based on a price of on US$45 per kilogram, and an operating margin of $29 per kilogram. The Aley mine would produce 9 million kilograms of FeNb annually – about twice the output of the Niobec mine.
The mine’s capital cost, $870 million, includes $100 million for a transmission line and other offsite infrastructure. Taseko has an agreement with Tsay Keh Dene First Nation to develop the mine, including a jobs training program.
But as Taseko has learned, building a mine in B.C. is fraught with problems, no matter how rich the deposit.
“They have a significant deposit, there’s no doubt about that,” said NioCorp CEO Peter Dickie. “Taseko will be the first company to tell you there are challenges in trying to put a mine into production in British Columbia.”
Taseko’s flagship property, the New Prosperity mine is, in fact, something of case study for those challenges. Considered one of the largest undeveloped copper-gold deposits in Canada, it has been rejected twice by federal regulators, based on environmental concerns, and has faced stiff opposition from the Tsilhqot’in First Nation.
It’s those kinds of challenges that led NioCorp to try to develop a niobium mine in Nebraska, not Canada.
“It’s a fairly clean, easy process down there, relative to B.C.,” Dickie said. “It’s a very well-supported project, both locally and politically, in the state.”
Dickie said the Nebraska mine could be in production by 2017. The company recently raised $10.5 million in special warrants to help move the project forward.
NioCorp has no operating mines as yet. Taseko has one – the Gibraltar copper-molybdenum mine north of Williams Lake.
Meet niobium, mining market's hot new supermetal
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