By Leia Michele Toovey- Exclusive to Moly Investing News

When economic growth resumes, there will be a critical shortage of strategic metals. The rapid collapse in metal’s prices has forced many miners to mothball operations; when demand for these metals resumes, there will be a lag time for production online.  This means that as quickly as prices collapsed, we can expect an upswing with more impetus.

Molybdenum pricing could quickly benefit from any infrastructure development, and with many governments recently implementing stimulus plans, moly’s rebound could be right around the bend. Construction steels used in bridges, highways and other transportation infrastructure are typically composed of 0.1 to 1.2% moly. Stainless steels used in chemical processing plants and nuclear generating facilities use up to 7% molybdenum.  Although molybdenum-bearing stainless steels are only a small part of the overall world market for stainless steels, under 10%, some molybdenum can be found in more than 40% of stainless grades.

The market price of molybdenum oxide in the 2008 fell steeply from US $34 per pound to US$ 8.75 per pound at the end December. Speaking at the BMO Global Metals and Mining Conference on Monday, Freeport McMoRan Copper & Gold Inc CEO Richard Adkerson claimed the reason for this sharp price fall of molybdenum oxide was a sudden and considerable shrink of the world demand for molybdenum.

The Statistical Bureau of Copper in Chile compiled and released recently the data of molybdenum produced in Chile for the calendar year of 2008.The Chilean government copper commission Cochilco said on Monday it saw prices for molybdenum supported at $11 per pound in 2009, down from $30/lb for most of last year. Cochilco said it saw global molybdenum output down 1.6 percent this year as demand falls 0.9 percent, leading to a likely surplus of 284 metric tonnes. “This would mean molybdenum prices will fluctuate between $9- and $14 per pound, with an average of about $11 per pound for the year.” Overall in 2008 Chilean molybdenum production was down 25 percent compared to 2007. 2008 closed with a surplus of 1,700 metric tonnes, total production was estimated at 33,304 tonnes.  For 2009, Cochilco predicts a recovery, with output reaching 40,000 tonnes in 2009, 19 percent more than in 2008

Company News

Thompson Creek Metals Company has announced more output cuts.  Last Wednesday, the company stated its plans to cut mill capacity by 30 percent and will temporarily idle two mines this year because of current market conditions. The company previously announced a reduction in molybdenum production by up to 40 percent.  Total production adjustments include a reduction in mill operation to 70 percent of capacity at the Thompson Creek Mine in Idaho. The mine will operate a ten days on, four days off schedule from mid-April. There will also be a temporary shutdown for about a month this summer at both the Thompson Creek Mine and the Endako Mine in northern British Columbia. Molybdenum production is expected to be 20 million to 24 million pounds in 2009, down from its previous estimate of 31.5 million to 34 million pounds and below the 2008 level of 26 million pounds.

Creston Moly Corp has completed a pre-feasibility study on its flagship Creston project, in Sonora, Mexico, and will move ahead with a bankable feasibility study, “in a measured and cash conservative manner”, the firm said on Wednesday. Based on the pre-feasibility report, Creston Moly expects it could produce 20-million pounds of molybdenum and 12-million pounds of copper a year, from 40 000 t/d of ore. The company acknowledged the challenges facing the company with the current economic conditions.  Chairperson Colin Benner commented “while in the short term, it remains a challenge to acquire adequate financing for good mining projects, this will change. We remain confident that the Creston project is one of the most viable primary molybdenum projects in the Americas and we want the project poised to take full advantage of the healthier base-metals markets when they arrive.’” The Creston operation has been planned as a conventional open pit mining operation. The project will produce 219-million pounds of molybdenum and 129-million pounds of copper over an 11-year mine life.

Weiss Capital LLC has acquired ownership and control of 6,901,500 common shares of Sprott Molybdenum Corp, representing approximately 17.5% of the presently issued and outstanding common shares of the Issuer. Weiss Capital now has ownership and control of 14,923,912 common shares representing approximately 37.85% of the presently issued and outstanding common shares of the Issuer. The common shares have been acquired for investment purposes and, depending on market and other conditions, Weiss Capital and its affiliates may increase or decrease their beneficial ownership, control or direction over common shares through market transactions, private agreements, treasury issuances, exercise of options, convertible securities or otherwise.