Why Everybody Is After Niobium: The Commodity That No One Knows About

The ongoing slump in commodity prices has tested even the best in the business, but there is one commodity that is gaining a lot of interest. It is called Niobium, a chemical element with symbol Nb and atomic number 41. It is named after Greek goddess Niobe, the daughter of Tantalus. The metal is used to make stronger yet lighter steel and "seven times more valuable than copper." A Bloomberg report says China Molybdenum Co. outbid at least 15 companies last month to purchase Anglo American plc (ADR)

's niobium and phosphate unit in Brazil, for $1.5 billion, or 50 percent more than analysts expected. http://www.bloomberg.com/news/articles/2016-05-17/the-commodity-that-no-one-knows-about-but-everybody-wants-to-buy "The buying frenzy that included Vale SA, Apollo Global Management LLC and X2 Resources showcased the growing appeal of a market that may be worth $4 billion for a soft, silvery metal many experts don't know much about," the report said. "I didn't know what niobium was, and I had been in the minerals industry for 20 years before this opportunity came across my desk. I had to actually open up the periodic table just to double-check that it was an element. It definitely is a boutique space," Craig Burton, the chairman of Cradle Resources Ltd. told Bloomberg. Australia-based Cradle Resources is seeking to develop the $200 million Panda Hill niobium project in Tanzania. The report says Cia. Brasileira de Metalurgia & Mineracao in Brazil supplies more than 80 percent of the metal, whose global demand is about 90,000 to 100,000 metric tons per year.' Metal Bulletin Ltd., which publishes prices for metals as obscure as bismuth and germanium, says "there's not enough liquidity to report one for niobium." "Niobium is a very unique business," the report said quoting Kalidas Madhavpeddi, who heads the CMOC International unit of Luoyang, China-based China Molybdenum. "We typically want to buy from people who regret selling it. We've been very carefully assembling a war chest in anticipation of a downturn in the industry." Meanwhile, Magris Resources Inc., founded by former Barrick Gold Corporation (USA)

CEO Aaron Regent, agreed to pay $530 million for the Niobec mine in Canada in 2014. Bloomberg, citing a research report from Argonaut, noted that unsuccessful bidders in Anglo's sale may turn towards Cradle's Panda Hill project in Tanzania. Pending financing, it's expected to start producing in mid-2018. The sales "have brought a lot of participants in," Cradle's Burton told Bloomberg. "There was only one winner. That leaves lots of parties that might be interested in talking to us because we do need to raise some capital to bring this project on."