Hazelwood Resources Commences Production at ATC Ferrotungsten in Vietnam

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Researched by Industrial Info Resources (Perth, Australia)--Hazelwood Resources (ASX:HAZ) commenced production at its ferrotungsten plant in Vietnam in early April 2012, and it has now achieved its design capacity of 16 to 18 tonnes per day of product. The hot commissioning on the plant began in the first week of this month, and it achieved its full capacity within three days of the first production. The plant is believed to be the largest of its kind outside of China, with a total design capacity of 4,000 tonnes per year.

The plant is currently operated and managed by Hazelwood's subsidiary company, Asia Tungsten Products Company Limited (ATC). All of the metal produced is taken by Wogen Resources (London, England) under a sales agency and financing agreement. The company is expecting total revenue of about $140 million per year at full capacity.

Hazelwood currently has two projects in the development phase in Western Australia to produce tungsten concentrates. The Cookes Creek and Big Hill mines, which are located near the remote towns of Nullagine and Yalgoo in Western Australia, will eventually provide tungsten concentrates to the ATC plant upon their completion in 2016. Each mine is being developed with a target production of an estimated 2,000 tonnes of concentrates, which will help the ATC plant achieve its optimum designed capacity.

Hazelwood was focused primarily on getting the ATC plant up and running, and the development of the mines was given second priority. GR Engineering Services (ASX:GNG) (Perth) was involved during the pre-feasibility stage of the mine development. With the plant in Vietnam commencing production, it is expected that the company will shift its focus to the development of the mine.

Due to its leading characteristic of having a significantly high melting point, ferrotungsten is often used as a major component in the making of popular superalloys. Its prime usage includes high-speed steel, heat sinks, counter weights, ballast keels and aircraft parts. Due to the general slump in the European markets, especially in the automobile industry, the prices of ferrotungsten have taken a hit. Currently trading at $39 to $40 per kilogram, the prices are almost 10% lower than the beginning of the year and at their lowest since 2010.

However, Hazelwood is optimistic with its new plant, which was developed under budget and represents a capital-efficient entry into specialty metal production. Its location offers low operating costs and paves the way for the company's future vertical integration with projects in Australia.

"Our technology and operator skill has now been proven," said Hazelwood Managing Director Terry Butler Blaxell. "The commissioning engineers, who have experience at other such operations, have remarked on how rapidly the plant has been able to achieve production success."

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