EV Resources shares boom amid China moly exports ban

EV Resources share price soared 133 per cent to as high as 4 cents after China retaliated against United States tariffs by banning molybdenum exports, which amount to almost half the world’s molybdenum supply.

The company has moved onto the front foot to champion its promising Parag porphyry project in Peru as a future supplier of molybdenum and copper.

In a move that could have far-reaching implications for the global metals industry, China’s ban of the critical mineral together with an export ban on tungsten, tellurium and ruthenium could create a massive shortage of the metal down the line, unless reliable new sources can be unearthed to fill the gap.

Molybdenum is extensively used as a strengthener in steel production and becomes even harder when subjected to high-pressure torsion. It is also used as a semiconductor in high-tech electronics due to its exceptional conductivity and ultra-high melting point.

The silvery grey metal is currently trading on the London Metals Exchange at US$20.75 per pound (A$33.2/pound) or US$45,746 per tonne (A$73,200/t), making it almost five times more valuable than copper.

Since the US produces just 12pc of the global molybdenum supply compared to China’s 45pc, American manufacturers are now scrambling to secure alternative sources.

EV Resources says analysts predict that their reliance on producers in Latin America and other regions will increase dramatically - and the company thinks it may have just the asset.

With 70 per cent ownership of the potentially massive molybdenum-rich copper Parag porphyry deposit in Peru, the company says it is well positioned to become a first responder.

A total of 83 holes have been drilled at the project to date including a whopping 416-metre intersection from surface grading 0.47 per cent copper and 0.19pc molybdenum. Another 89.4m hit starting 6.5m from surface ran at 0.39pc copper and a massive 0.62pc molybdenum.

High-grade molybdenum is generally considered to be ore containing metal concentrations above 0.2pc. Parag’s numbers so far are as high at 0.62pc, suggesting its results fit into the ultra-high-grade category.

It was inevitable that molybdenum would sooner or later be subject to export restrictions from China, and as mines around the world age and deepen and grades deplete, it appears molybdenum will become a metal that takes on a strategic significance.

Callaghan said with intersection widths of more than 400m from surface coupled with high copper grades enriched with massive amounts of molybdenum, Parag bears all the hallmarks of an economically viable project, which could become critical to future global supplies.

Adding to its strategic advantage, the project has access to water and hydroelectric power and is positioned just two hours’ drive from Peru’s newly opened Chancay bulk port.

Management appears to have compelling evidence to back up its claims saying the company has already been approached by multiple molybdenum roasters in the US and Latin America, reflecting a growing interest in alternative supply sources.

As a result of these increased urgent enquiries, EV Resources is now exploring funding options for the next phase of drilling while it continues discussions with molybdenum processors in the Americas.

The geopolitical landscape surrounding critical minerals is shifting and China’s latest move has highlighted just how exposed the West is to supply chain disruptions.

For the Parag project and its owners this moment presents both a challenge and a lucrative opportunity in a changing global metals market.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au