Newcrest Mining tunes into tungsten metal

IAN Smith has been showered with plaudits at reviving the largest Australian-owned gold miner, and rightly so.

It's not usual for Pure Speculation to concern itself with the big boys like Newcrest Mining (NCM) but, bear with us, we'll get back to the cheapie end.

Memories are fading as to the state of Newcrest before Smith took over (and, critically, the former banking boss Don Mercer moved in as chairman). Between 1996 and 2006, Newcrest went through a succession of MDs. John Quinn departed after a disastrous takeover tilt at Normandy Mining, Russell Barwick was out after clashing with the board. Tony Palmer, the MD immediately before Smith, also had disagreements with Mercer's predecessor, and then there was Gordon Galt, who left suddenly in 2000.

However, our interest in NCM at the moment is the O'Callaghans project, lying just south of the Telfer mine. A report from the British Geological Survey on tungsten is predicting that O'Callaghans could, in 2013, become the world's largest tungsten mine -- and here we remind you of the strategic nature of this metal with China still dominating the sector with an 81 per cent market share.

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The prices of ammonium paratungstate -- the form in which tungsten is traded -- rose about 80 per cent in the past year. The European Union has designated tungsten as one of 14 critical metals of which Europe must ensure it has reliable supplies.