The Price Of Niobium Is Gaining Momentum And Some ASX Small Caps Can Make The Most

Rising to about 15 percent so far this year, the price of niobium has gone up and has finally in progress of gaining some momentum. Because they are a rare part of its segment it is good news for ASX-listed niobium players. Sometimes referred to by its old US name of columbium Niobium, it is a shiny metal used in everything from jet engines to superconducting magnets to hypoallergenic jewelry. Accounting for 90 percent of world production, its major use is in the making of high-strength, low-alloy steel HLSA.

There have been no new mines brought into production since the mid-1970s, that make niobium as their primary product and there are only three mines in the world. CBMM in Brazil supplying about 84 percent of the global market, is the world’s largest producer of niobium. From its mine in Brazil and Magris Resources produces about the same from its Canadian mine, China Molybdenum produces about 7 to 8 percent of the world’s niobium.Â

With convention growth estimated to be 25 percent over the next six years, Niobium is classified as a strategic metal by the US. Followed by Europe and Japan, the Americas are the largest users of ferroniobium in steel. China also presents an opportunity specifically as it has no niobium deposits of its own, which is currently not a big consumer of ferroniobium. The current global market is worth three times the graphite market around $3 billion per annum. There are twelve others who have projects that host niobium among other commodities and there are just two ASX-listed juniors that are looking mainly for niobium mostly lithium and tantalum.

Few stocks worth mentioning are Cradle Resources (ASX:CXX) which it is working to move towards financing and construction, has a 50 per cent stake in the Panda Hill niobium project in Tanzania. The company is currently in a dispute regarding whether a definitive feasibility study has been delivered with its joint venture partner, Tremont, within the context of the shareholders agreement. The pair cannot reach a decision to mine, until the dispute is resolved. Although a date has not yet been set for the hearing, but the matter has been referred to arbitration.

Globe Metals & Mining (ASX:GBE) at its Kanyika niobium project in Malawi earlier this year, meanwhile, restarted work on a feasibility study. The company is to revisit its Malawi project was prompted by a brighter outlook for niobium. Globe has been investigating its project financing, partnership and design options. The stock of GBE is trading at a market price of $0.014 as at October 30, 2018 and has undergone a performance change of 7.69% over the past 12 months.

Alkane Resources (ASX:ALK) in New South Wales is moving towards production that will also produce niobium with its $1 billion Dubbo rare earths project. About 30 percent of Alkane’s product suite will be magnet metals neodymium, and 20 percent will be terbium, niobium, praseodymium and dysprosium. In early October prices broke through $US42 a kilo and have been in the mid-$US30 per kilo for ages so it is increased 15 percent this year.

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