Second mine planned when CanTung exhausted
Dave Sullivan
Northern News Services
Yellowknife (May 28/01) - A mine idle for 15 years is about to re-open, thanks in part to controversy over uranium-tipped explosive artillery shells.
The CanTung tungsten mine on the NWT side of the Yukon border west of Fort Simpson closed 15 years ago because of depressed prices.
Tungsten is among the hardest known metals, almost hard as diamonds. Prices have risen dramatically in recent years because of increased demand for dense metals that can replace armour-penetrating uranium in bombs, but mostly because China and Russia have run out of stockpiles they've been "dumping" for years, says Udo von Doehren, president of CanTung owner North American Tungsten Corporation.
CanTung, tucked between the Yukon border and Nahanni National Park, will run out of ore in about four and half years. When that happens production will be shifted to a larger deposit called MacTung located 100 kilometres north. A mine being planned for there should last 30 years, von Doehren said.
He doesn't expect problems finding workers for CanTung's reopening. "There is no shortage of qualified hard-rock miners in the North."
The company plans to hire 170 people and re-open the mine by year's end.
Mining operations will be contracted to a company that's not yet been picked.
Much better tungsten prices combined with a recently signed agreement with two big companies prompted the decision to re-open. North American Tungsten will spend about $10 million to get power generators, pumping stations and ore-processing equipment running again, von Doehren said.
Sweden-based drill equipment maker Sanvik and Germany-based Siemans subsidiary Osram Sylvania have agreed to buy everything the mine can produce -- about 900,000 tonnes over three years.
The European companies collectively are the world's biggest tungsten ore consumers. They have agreed to loan Vancouver-based North American Tungsten $4.5 million of the startup costs.
The company has not applied for regulatory approval process yet, but von Doehren says no delays are expected, as there is no evidence of environmental concerns. A previous water licence under the jurisdiction of the Mackenzie Valley Land and Water Board is valid until September 2002. After that, he says, "we fully expect renewal."
Mine royalties will be paid to the GNWT, not Deh Cho communities, although the Deh Cho First Nations are negotiating for control of the region's resources.
Tungsten sells for $74 US per tonne, up from a low of $28 two years ago. Demand is always growing, von Doehren says, citing a decision by the U.S. military to replace lead with tungsten in bullets used in standard-issue M-16 rifles.
Many countries have also chosen to replace so-called "depleted" uranium in bomb and artillery shells because of still-unproven fears that residue from the shells causes cancer.
North American Tungsten owns 15 per cent of the world's known tungsten ore deposits, which are extracted from underground shafts. Until recently 75 per cent of the global supply came from China, but about 65 mines there and in some other countries have closed over the past couple years, von Doehren said.
Listed on the Canadian Venture Exchange, North American Tungsten's stock value soared from a low of 7 cents a share in 1999 to a 94-cent peak last year. Last week, shares were going for 68 cents.
