China delays and then sends back cargo from Victorian mine that was destined for a US defence supplier
An Australian mining company has vowed to bypass Chinese ports forever after authorities seized and returned a 55-tonne antimony shipment destined for a US defence supplier.
A Chinese move to block an Australian critical minerals shipment bound for a US defence supplier has heightened the battle to shore up Western supply chains.
The shipment of 55 tonnes of antimony concentrate mined in Victoria was held up for three months at the port of Ningbo in Zhejiang Province, and only released by Chinese authorities on the condition it was returned to Australia instead of being sent on to New York-listed US Antimony Corporation.
The incident came as US Antimony, the only antimony smelter operator in North America, was looking to step up production and secure a $US240m ($367.6m) supply contract with the US Department of Defense.
The Albanese government’s recent decision to offer a $137m bailout to Nyrstar, owned by multinational commodities giant Trafigura, was motivated in part by Nyrstar’s promise to focus on building a pilot plant at Port Pirie to process antimony.
Antimony is used to harden lead in ammunition – particularly armour-piercing rounds – and in infra-red missiles, as well as in the production of flame retardants and in electronics.
US Antimony was so concerned about the shipment delay in China that it asked for help from the US State Department and the White House. ASX-listed Alkane Resources, which owns the Costerfield gold and antimony mine in Victoria, said it would never again send a shipment bound for the US via China.
US Antimony chief executive Gary Evans said on Tuesday in the US that the returned shipment had left Australian shores again in the past few days.
“There is a worldwide shortage of antimony and it is one of the few critical minerals there is not an easy answer for,” he said on a call after US Antimony released half-year results showing profit had almost doubled.
Mr Evans said his company had stepped up efforts to secure antimony from other sources since the incident with the shipment from Australia, including from Chad, Bolivia and Peru.
US Antimony has expressed concern that the Australian shipment may have been tampered with or contaminated in China, given the seals on the shipping containers were broken. The shipment was waylaid in China amid a merger between Canadian company Mandalay, which owned the Costerfield mine, and Alkane.
Alkane chief executive Nick Earner said antimony from Costerfield had been sent to the US via Chinese ports in the past without incident, but his company would no longer run that risk.
China banned its exports of antimony to the US last December and at the same time restricted supply of gallium and germanium. The export bans were imposed after the US put restrictions on China’s semiconductor industry.
“For some reason, this shipment had a problem and was held up, and then we had to turn it around, bring it back and send it a different way,” Mr Earner said.
“From our perspective there was nothing wrong with the shipment. All it means is product bound for the US – just in case there is more funny buggers – we will route a different way.”
Mr Earner said the China incident came when US Antimony was restarting operations and was highly sensitive about any supply disruption.
He doubted the shipment had been tampered with and said the seals were likely broken as part of a customs inspection in China.
“Whether we were being deliberately mucked around and inconvenienced is speculative. It could be the sort of normal commercial leaning that the Chinese often put on competitors,” Mr Earner said.
Alkane is still selling antimony into China as well as to US Antimony, which is headquartered in Dallas and has smelters in Thompson Falls, Montana, and Coahuila, Mexico. The shipment from Australia was ultimately bound for Coahuila.
The SPMP antimony smelter in Oman, once regarded as the largest outside of China, shut down last year because the operator couldn’t source enough feedstock to keep it running.
Mr Earner said a tonne of concentrate exported from Australia was about 45 per cent antimony and might contain 2-5 ounces of gold depending on where it came from in the Costerfield ore body.
He expects Alkane will engage with Nyrstar and the federal and South Australian governments on supply if there is progress with plans to retrofit the ageing Port Pirie smelter to produce refined antimony, but he has no intention to stop selling to long-term customers in China.
Both the US and Australia have had to rely on China for supply of finished antimony products for use in the defence industry and high-tech manufacturing, but the US is now cut off.
Mr Earner said antimony’s importance in small volumes in defence applications tended to overshadow its widespread use in fire retardant products, electronics and in solar panels.
Mr Evans said US Antimony had been able to process about 250 tonnes of Costerfield concentrate from previous shipments. He warned the shipment now on the water might be the last.
Antimony prices have soared amid the export bans and shortages. US Antimony ended June 30 with an inventory of 201 tonnes of processed and unprocessed antimony valued at $US10.4m. The same inventory would have been valued at $US4m at the end of December.
According to the US Geological Survey, the National Defense Stockpile currently holds 1100 tonnes of antimony, which represents about 5 per cent of annual US consumption.
It is estimated the stockpile only has antimony reserves sufficient for about 42 days of “critical defence applications”.
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