Resource World Magazine

14 www.resourceworld.com d e c e m b e r / j a n u a r y 2 0 1 6 half of the Japanese fleet to eventually restart (five reactors have already made it through the review process, and another 19 reactors are currently going through the process), he doesn't anticipate mate- rial upside in near term pricing, as the Japanese utilities are sitting on large inven- tory stockpiles and the market remains in surplus. However, relative to other com- modities (oil, base metals, etc.) Wowkodaw views a relatively steady uranium price environment as attractive. ZINc Zinc has been one of the bright spots on the base metals scene as analysts and industry officials foresee a supply side deficit in both concentrates and refined metal due to mine closures. People have been talking about this for quite some time now, said Mark Cruise, President and CEO of Trevali Mining, a Vancouver-based zinc producer. "There has been no major investment in zinc as a commodity for at least since 1995. That was the last tier one discovery (the Cannington Mine in Australia). Since then there have been no tier one mines permit- ted or built anywhere on the planet." "If you fast forward to today, some of the tier one mines have been closing down,'' Cruise said. Brunswick No. 12 in New Brunswick closed down about two years ago (closing 2% to 3% of global sup- ply). Then you have Lisheen in Ireland closing down this November (Europe's second largest zinc mine). The massive Century Mine (one of our top three pro- ducers) in Australia is winding down and processing stockpiled material and will be done at the end of the year. However, concern over the demand outlook in China and speculation that Glencore — the world's biggest zinc miner, with 10% of capacity — might sell inventories to reduce debt, triggered fund liquidation, wrote Scotia Capital in a recent report. Zinc fell as low as $0.72/lb in late September, before snapping back to $0.78 in October on news that Glencore will cut 500,000 tonnes of mine production in Australia (Mt. Isa, McArthur River), Kazakhstan and Peru (Iscaycruz). Those production cuts, alongside further mine deferrals, will result in even bigger 'defi- cits' in 2015-16 and hasten the drop in inventories to critically low levels by 2017. Prices could surge to $1.25-1.35/lb in 2016 and even higher in 2017, Scotia Capital said. leAD Lead is actually a bit in deficit, said Trevali's Mark Cruise. He said that's because 98% of lead production is a by- product of zinc production. As a result of the production cuts announced in September, Glencore is taking 100,000 tonnes of lead out of the market as well. There are currently only 150,000 tonnes of lead in LME warehouses, Cruise said. So if zinc strengthens, lead should strengthen in tandem. It may even strengthen slightly before, based on current draw downs. However, he noted that lead is a small mar- ket, making it hard to get reliable data. NIckel A combination of factors, including a weakening outlook in China recently prompted analysts at Macquarie to sig- nificantly downgrade the pricing outlook for nickel. "While we still foresee deficits from 2016-2020 following the Indonesian nickel ore ban, the significant build in global nickel inventories in 2014 and 2015, and their now high level, has made the case for a strong price rally less compel- ling,'' Macquarie said. The average nickel cash price is expected to fall this year to $5.48/lb from $7.65 in 2014. In 2016 the average price is expected to be $5.95/lb, rising again to $7.48 in 2017 and $8.39 in 2018, according to Macquarie estimates. rAre MeTAlS – TANTAluM "These are rare metals that not a lot of people know about, but the potential opportunities are very significant,'' said Chris Grove, President of Commerce Resources, a Vancouver-based junior, which is developing its flagship Blue River tantalum-niobium deposits in British Columbia. tantalum is an essential ingredi- ent in the production of electronic devices,

• Cover