Largo Resources Hopes to Gain From a Pending Supply Shortage

It’s not easy being in the mining business these days, as jittery investors have sold shares of commodity-related companies. Canadian-based mineral company Largo Resources (LGO.V), for instance, has seen its stock price plummet more than 80 percent in the past year. But Largo Resources is ramping-up production at its mine in Maracas, Brazilian, with the expectation that it’s about to benefit from a massive supply shortage of vanadium. Vanadium, for those who forgot the periodic table from high school chemistry class, is a mineral used in the production of steel to make it lighter and stronger. Largo Resources says its mine contains the world’s highest grade vanadium deposit. ‘We have the best resource for Vanadium in the world at our Maracas mine. Our technology is now known and understood. We have the lowest unit production costs in the world,’ said Mark Smith, President and Chief Executive Officer at Largo. Smith says he’s not concerned about a global economic slowdown impacting demand, which he sees as holding steady this year. But even as demand is flat, supply is shrinking.