Chinese company largest cesium supplier after mine sale
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Hey there, time traveller!
This article was published 28/08/2019 (1131 days ago), so information in it may no longer be current.
Earlier this summer, Tanco Mine, one of only four operating mines in Manitoba (one of which is a quarry) was sold by an American company to a Chinese company.
It did not receive the kind of media attention that other foreign ownership of Canadian natural resources companies has received, probably because it was a relatively small deal and the minerals being mined at the location — tantalum, lithium and cesium — are either of low volume and concentration or are in low demand.
Boston-based Cabot Corp. sold the mine and other assets of its so-called specialty fluids division in Scotland, Norway and Singapore for US$135 million to Sinomine Rare Metals Resources Co. Ltd., a subsidiary of Sinomine Resources Co. Ltd., a Chinese company publicly traded on the Shenzhen Stock Exchange.
Tanco Mine, located about 160 kilometres northeast of Winnipeg and 70 kilometres northeast of Lac du Bonnet, has been in production since 1969 and owned by Cabot since 1993.
A senior official at the mine was unable to talk about the future plans for operation of the mine, saying only, “At this point in time, we are in the process of developing a strategy for our business.”
According to several references, there are likely fewer than 100 people working at the site. One reference said Cabot’s specialty fluids division had a total of 120 employees at the four locations.
For Cabot, its specialty fluids division had become a very small piece of its operation, but after the close of the sale, Sinomine was happy to say in a corporate release, “After this transaction, Sinomine has become the world’s largest pollucite mining enterprise and the world’s largest producer and supplier of cesium products.”
In the past, the Lac du Bonnet mine produced lithium and tantalum, as well as cesium, but new mining of all those minerals has been drastically curtailed. But it is cesium, despite being a minor metal, that has become the asset with any value at Tanco. It is used, in the form of cesium formate brine, in high-pressure, high-temperature well drilling for oil and gas production and exploration mostly in deep-sea scenarios.
And regardless of low demand, the Tanco Mine happens to be the site of 85 per cent of the world’s known supply of cesium. As such, you would think the ownership of that asset would have some amount of strategic value.
According to mining analyst and newsletter writer Mickey Fulp of mercenarygeologist.com, it is a big deal that such an asset should come into the hands of Chinese ownership.
Fulp noted in a recent post that the acquisition of Tanco means China is now virtually in total control of 21 of 35 minerals that the United States Geological Survey (USGS) designated as critical mineral commodities in May 2018.
The USGS says the minerals on the list are vital to the U.S.’s security and economic prosperity. (Tantalum also happens to be on the list.)
In light of the potential strategic importance of such a hard-to-find mineral concentrated in the hands of a foreign power as fickle as the Chinese, Fulp said in a recent post, “That this sale was allowed to proceed is, quite frankly, beyond me.”
While Fulp is concerned about the control of the source of most of the world’s cesium, he also makes it clear that, when it gets down to it, the demand for cesium is not great.
“Cesium is an obscure, low-use commodity with limited market data,” Fulp wrote earlier this year. He said world resources are incomplete and largely undocumented.
In its Mineral Commodity Summaries 2019 publication, the USGS said, “Consumption, import and export data for cesium have not been available since the late 1980s. Because cesium metal is not traded in commercial quantities, a market price is unavailable. Only a few thousand kilograms of cesium are consumed in the United States every year.”
While output at the mine has declined over the years, it is not as if it has been neglected. About five years ago, a serious infrastructure challenge was detected and there was talk about shutting the mine down. But instead, Cabot invested in a major rehabilitation project. Another significant rehabilitation and underground mining project got underway two years ago.
The recent project was budgeted for more than $15.8 million and is now the subject of an $8.9-million civil suit launched by Dumas Contracting Ltd. Timmins, Ont.-based Dumas claims that additional work was unavoidable and was done with the knowledge of its client at the time (Tantalum Mining Corporation of Canada Limited and Cabot Corp.).
It is not clear what, if any, effect that civil suit will have on the future stewardship of the mine or the business case of its future operation.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.