Almonty's CEO Talks Tungsten And The Eurozone Crisis

Almonty's CEO Talks Tungsten and the Eurozone CrisisSpain is home to Almonty Industries' (TSXV:AII) Los Santos project, one of the only producing tungsten mines in the western world. Spain is also now center stage in the Eurozone crisis. The world is waiting to see whether its government will request a bailout, which some insist is necessary to help the country lower its borrowing costs to sustainable rates. Inquiring minds may wonder what impact conditions in Europe are having on the business of producing and selling a rare metal like tungsten. Almonty's CEO, Lewis Black, provided Tungsten Investing News with some insight.

While it operates in Europe, Almonty is not directly exposed to market conditions there. The company exports all of its tungsten to North America, a market that Black says has held up well. Still, the company does not exist in a bubble and therefore has not been able to completely insulate itself against the region's crisis.

“No one wants to carry [tungsten] inventory given the uncertainty in Europe,” Black said, outlining the first effect the company has noted. “Consumers only buy what they need and they are working down the inventories that they have. Understand that this is not based on fundamentals, but purely on uncertainty.”

Some may find that surprising as many consumers have been pushing to secure access to supply outside of China.

I will probably get shot for saying this, but there is very little partnership between consumers and producers in the tungsten business,” said Black.

“Consumers' primary concern is to keep their costs low, and they operate with no real regard for what will happen to the producers. Consumers feel that they can always get a bit [of tungsten] here and bit there and for years they have been. Now, I really don't understand it because the quantity and quality of that supply is dwindling, but this is how they operate. So the producers have a tough time, no doubt about it.”