News

July 03, 2008

Molybdenum Is The Metal Proxy For Exposure To Oil And Gas, And Moly Mines Has Plenty At Spinifex Ridge

By Our Man in Oz

Sour gas has a sweet smell for Derek Fisher. Over the past three years, as he has been busy building a new Australian business based on mining the metal molybdenum, global demand for oil and gas, whether sweet or sour, has soared. The link between “moly” and sulphur rich (sour) oil and gas is that pipes carrying the fuel must be moly-toughened. That’s why a commodity which most people struggle to pronounce, let alone understand, is now technically rated as the world’s newest precious metal, with a price which has risen from US$5 a pound five years ago to around US$30 a pound, or close to US$2 an ounce, today. At that level – a level which seems likely to stick, given the global stampede to produce even the foulest of oil and gas – molybdenum starts to look a very good bet indeed, and the Spinifex Ridge project owned by Mr Fisher’s Moly Mines could emerge as a big winner in the next wave of the mining boom.

While investors in North America and Europe have been licking deep wounds caused by failed bank and retail investments anyone exposed to resources, especially oil and gas, has survived and, in most cases, prospered. The question now is what next, and one of the answers lies in finding metals which will benefit from the worldwide hunt for liquid fuels, even the stuff produced by boiling down tar sands in Canada, or from the high sulphur oils in the Middle East.

“Moly really is a metal for our...