Behind Buffett’s investment for tungsten mine: tungsten supply is on the verge of extinction

Last month, Warren Buffett and Berkshire Hathaway’s IMC International Metal Cutting Working agreed to invest $ 80 million in a tungsten ore mining project of South Korea, South Korea was the world’s largest tungsten producing countriy.

China accounts for more than 80% of the tungsten production in the world, but it had been reduced the export. And China did not show any signs of loosening, preferring to use it for the national manufacturing. Therefore, in the foreseeable future, the rest of the world had to search new sources of supply. Russia has some reserves, but 70% reserved for domestic use.

Now, except China and Russia,there are only five tungsten ores as the main supplier of the global market. A recent geological survey report in England, released metal list, there are the economic value of the “endangered” in which tungsten topped the list.

Recently, China imposed export restrictions on tungsten, while vigorously to purchase this metal and detonated tungsten demand. Unfortunately, the miner who has been engaged in tungsten extraction for export, from exploration to construction or re-opening the old mine, and then the actual producing the concentrate, the process usually takes two to three years. In summary, the market will not appear the major new sources of supply by 2013.

In fact, if you think that Warren Buffett’s move–buying a mining companies specifically for their own use is not realistic for most enterprises, so the rest is only one possible: cooperate with those companies (China) which supplying tungsten and encourage them to increase supply to meet demand. Recently, the high oil prices and the effect of the global economy should have told us that this is not a wise choice. Obviously, this is the only option. In view of so many industries depend on this irreplaceable metal, in 2012 and the foreseeable future, this is the only way.

Jerri Lily a professianl writer from diamond-sawblade.com , it provides the high quality products, such as Diamond Saw Blade, TCT Circular Saw Blades, and many more.

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