{"id":30197,"date":"2012-06-12T23:51:08","date_gmt":"2012-06-13T03:51:08","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/06\/why-warren-buffett-is-loading-up-on-tungsten\/"},"modified":"2012-06-12T23:51:08","modified_gmt":"2012-06-13T03:51:08","slug":"why-warren-buffett-is-loading-up-on-tungsten","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/06\/12\/why-warren-buffett-is-loading-up-on-tungsten\/","title":{"rendered":"Why Warren Buffett is Loading Up on Tungsten"},"content":{"rendered":"

By MoneyMorning.com.au<\/a><\/strong><\/p>\n

Warren Buffett is at it again.<\/p>\n

Although he says he doesn’t want to own gold, the world’s most famous investor has taken a shine to what may be the most precious metal of the 21st century – tungsten.<\/p>\n

Tungsten<\/strong> – element number 74 on the periodic table – is a super-hard metal used in everything from armour-piercing tank shells to wedding rings.<\/p>\n

And the world is running out of it – fast.<\/p>\n

<\/span><\/p>\n

That spells opportunity for savvy investors like Warren Buffett<\/a>.<\/p>\n

And it explains why IMC International Metalworking, part of Buffett’s Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B)<\/strong> empire, recently invested $80 million in a tungsten mining project in South Korea. The deal gives Buffett a 25% stake in what used to be the most productive tungsten mine on the planet. IMC has also guaranteed to buy 90%-100% of all the shiny metal from Woulfe Mining Corp.’s (TXSV: WOF)<\/strong> Sangdong Mine.<\/p>\n

Sangdong is expected to produce half of the world’s non-China tungsten and account for 7% to 10% of total global tungsten production when it reopens in 2013.<\/p>\n

While the deal may come as a surprise to some, those in the know understand that Buffett just made another shrewd move to lock up supplies of a critical resource.<\/p>\n

Tungsten – A Vital Part of Modern Life<\/h3>\n

<\/center><\/p>\n

Best known as the filament used in conventional light bulbs, tungsten is among the world’s hardest materials.<\/p>\n

Its ability to withstand extreme heat – the grey metal is corrosion and fireproof – makes tungsten irreplaceable in a wide range of applications, including circular electric saws, drill bits for oil and gas exploration<\/a>, and rocket engine nozzles.<\/p>\n

But tungsten<\/a> is more than just an extremely hard metal. Indeed, modern life virtually revolves around it and, in most cases, there is no substitute.<\/p>\n

And now, high-tech industries are driving demand even higher.<\/p>\n

Tungsten is vital to the manufacturing of electrodes used in solar panels and nuclear equipment. More importantly, it’s a vital component in the touch screens of smart phones and tablet devices now exploding in popularity around the world.<\/p>\n

In fact, while global demand has grown at a pace of about 6% for years, miners will need to expand production from 68,000 metric tons in 2011 to 96,000 by 2016.<\/p>\n

China Crimps Tungsten Supplies<\/h3>\n

<\/center><\/p>\n

The problem is that supplies of tungsten are desperately short.<\/p>\n

That’s because China has more than 80% of the world’s supply and has shut down most of its exports by imposing quotas on foreign purchases.<\/p>\n

In fact, China is now a net importer of tungsten and expects to use all of its supplies to support its own manufacturing firms.<\/p>\n

That means the rest of the world is scrambling to find new resources and open new mines – a process that takes a minimum of three years.<\/p>\n

Tungsten mines are also very difficult to operate, processing large amounts of material to harvest relatively small amounts of metal, according to the International Tungsten Industry Association.<\/p>\n

In fact, there are no more than five mines supplying most of the world’s tungsten outside of China and Russia.<\/p>\n

Consequently, tungsten was at the very top of the “endangered list,” in a recent British Geological Survey report on metals of economic value.<\/p>\n

Both the U.S. and European Union have also recently classified tungsten as a critical strategic metal<\/a> that needs to be stockpiled.<\/p>\n

Meanwhile, tungsten prices have rocketed from about $180 three years ago to roughly $430 per metric ton today.<\/p>\n

That leaves industries dependent on tungsten with limited options.<\/p>\n

Most are simply hoping current miners will increase supplies as fast as possible to keep prices from spiralling out of control.<\/p>\n

According to Money Morning (USA) Global Resources Specialist Peter Krauth, the shortage of tungsten may soon present investors with a great investment opportunity.<\/p>\n

Don Miller
\nContributing Writer, Money Morning<\/strong><\/p>\n

Publisher’s Note:<\/em> This is an edited version of an article that originally appeared in Money Morning (USA)<\/a><\/em><\/p>\n

From the Archives…<\/em><\/strong><\/p>\n

Why You Should Wish For a Falling Market<\/a>
\n2012-06-08 – Greg Canavan <\/p>\n

Why the U.S. Dollar is Really Rising<\/a>
\n2012-06-07 – Keith Fitz-Gerald <\/p>\n

How This Bear Market Could Last Another 18 Years… Just Like Japan’s<\/a>
\n2012-06-06 – Kris Sayce <\/p>\n

The Banking Plan That Could Be A Game-Changer for Gold<\/a>
\n2012-06-05 – Dr. Alex Cowie <\/p>\n

Best Investment Strategies For the Times Ahead<\/a>
\n2012-06-04 – Nick Hubble <\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nWhy Warren Buffett is Loading Up on Tungsten <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Warren Buffett is at it again. Although he says he doesn’t want to own gold, the world’s most famous investor has taken a shine to what may be the most precious metal of the 21st century – tungsten. Tungsten – element number 74 on the periodic table – is a super-hard metal used … <\/p>\n

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