EDITOR: | April 16th, 2015 | 15 Comments

Antimony giant Twinkling Star winding down another perfect storm is rising….

| April 16, 2015 | 15 Comments

It is well known that the Bingham Canyon mine and a handful of South African gold mines date back to the days of Queen Victoria. The Antimony space though is typified by long-lasting mines, as I have written before, with Mandalay‘s Costerfield mine outside Melbourne having operated on and off since the 1860s, the Consolidated Murchison Mine in South Africa has functioned (also sporadically) since the 1940s and the industry giant, Twinkling Star in China having a history going much further back.

But all good things must come to an end and Twinkling Star is staggering on its last legs and Cons Murch was recently put into care & maintenance (yet again). This creates something of a perfect storm which may drown those short the very illiquid antimony metal market and leave many end-users with their “just-in-time” practices wrong-footed.

The 800lb Gorilla of Antimony

The granddaddy of Antimony mining is the Hsikwangshan Twinkling Star Antimony Mine at Lengshui Jiang in China. It was originally found in 1541, when mining began artisanally, and it has been mined “formally” since 1897. This mine alone has produced around 25% of global supply in recent decades. It is this mine that gave China the 90% market dominance in the Antimony space it has enjoyed since the 19th century. Admittedly this mine is special in that it is not only long-lasting but also high volume.  The mine is owned by Hunan Non-Ferrous (HNC), the world’s largest Antimony producer, which itself is a satellite of China Minmetals. We have heard that the latter is now trying to fold the whole of HNC into its own corporate structure. As an aside we might note that the Beaver Brook Antimony mine in Newfoundland that was opened several years ago, was bought very soon after but HNC and then shuttered. Official reasons related to grade but many felt it was an attempt to remove a “rogue” player from the market.

Some Technical Details

Twinkling Star is a “Supergiant” Sb deposit. Statistics on the mine are somewhat sketchy, much as was the case with Bayan Obo when the Rare Earth boom broke.  This should be seen in the context that Twingling Star is a “national treasure” like Bayan Obo as it has long-cemented Chinese dominance. The numbers that we do have are that 801,000 tonnes of Sb produced in the period 1897-1990. Reserves (back in 2002) were 570,000 tonnes of Sb, but that is now mostly depleted and it is estimated that there are less than four years of ore remaining. Even that production is now in declining amounts per annum, at high production costs because the ore face is now located so far from the mine entrance.


Geologically speaking the mine consists of:

Four major deposits hosted in series of antiforms in 2km wide x 9km long belt

  • No igneous rocks for 25 km2 around ore field, except for a small ultramafic dike
  • Mostly stratiform, carbonate-hosted and, to a lesser extent, black shale-hosted
  • Collapsed breccias in limestones at shale contacts provide an important lithological control

However, even Antimony mines don’t last forever and it is a widely held view that this mine is now in terminal decline with higher extraction costs and declining grades. Costs are rumoured to be $2.50 per lb, thus requiring a meaningful uplift in market prices to make mining the residual reserves a worthwhile endeavour.

The key thing to note is that there is no other Antimony mine in history that has even vaguely been of this size and it is highly unlikely that another such will come along.

Some Other Pressures Building

As mentioned earlier the Cons Murch mine went into care & maintenance mode in late 2014 after the sale to Stibium (which was then going to list on the AIM) fell through. So Village Main Reef, the JSE-listed current owners mothballed it. Cons Murch is the perennial canary in the coal mine and its closure represented the effect of Sb dropping below $9,000 per tonne and the high costs of u/g mining in South Africa. However as a harbinger in the industry it will also inevitably reopen as soon as Sb prices spike. It is (was) the West’s major producer at 5,000 tonnes per annum so it effect is not insignificant.

Meanwhile the Hillsgrove mine in Australia is back in production. However information is scant as the operators are private and the only noise on the airwaves about this is the probably apocryphal utterances of US Antimony boosters that claim that UAMY’s Mexican roaster is “processing containers of ore from Hillsgrove”. Hmmm. Make up your own minds on that one.

The more relevant development relates to Burma. Long mired in civil war, the rebel tribes in the north of the country stumbled upon artisanal Sb mining as a good way to pay for guns and a growing tide of material, in recent years, has made its way to China across the unsupervised border. DERA, the German equivalent of the USGS or BGS, has estimated that up to 14,000 tonnes was exported (smuggled?) from Burma in 2011. There are two negative dynamics for Sb supply here. The first is the obvious one that artisanal mining is almost always the easiest pickings and when the task involves declining grades or going underground or creating deep open-pits for extraction then the effort peters out. These rebels were clearly over-exploiting whatever resource they had to hand which is a recipe for a steep drop-off in production at some point. More interesting though is the gradual opening of the Burmese economy and political stabilization. With the recent signing of accords between the government and some of the most prominent rebel groups this could put an end to artisanal pillaging of the metal supplies out of Burma and put the trade on some sort of more professional (and regulated) basis.

All of this spells less supply and less selling by desperados.

And the Effect

A picture supposedly tells a thousand words so here goes:


Source: Argus Minor Metals

In fact, though one of my trading sources in Shanghai said the metal is trading at $9,200 per tonne, having added 6% in just one day.


So it looks like another one of Antimony’s Perfect Storms is brewing. However the last time the Sb price spiked to over $14,000 was largely on rumour and artificial constriction of supply. The demise and closure of Twinkling Star would be a much more permanent reordering of the global Antimony market place with the traditional Chinese dominance of the metal suffering a big and possibly mortal blow. This is turn would position non-Chinese sources to grab a bigger market share. However the latter is easier said than done when the West has allowed the bulk of its mines to fall into disuse..

The death of a star is usually followed by a super nova as it explodes and then implodes ending as a black hole. Though in some cases a stars may just shrivel to become a white dwarf. Twinkling Star seems destined to become a black hole, followed by an explosion in the price of the metal left bereft of its large mine source. Those end-users not well supplied from alternative sources may find themselves in turn sucked into the alternative universe on the other side of this black hole and that alternative universe may well consist of a few years of absolute shortage of supply.


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  • Tracy Weslosky

    I have received a lot of emails on this article Christopher behind the scenes….

    Here’s one that was just forwards to me from a gentleman named “Mike”. He writes:

    “Read ’em and weep.. how perfect is your timing. Check out today’s China Press:


    wow what timing.” — end of email.

    April 17, 2015 - 10:23 AM

  • Herbert Denton

    1. On March 25, 2015, MinMet, China’s trading arm, bought the 49% balance of Hunan Non-Ferrous Metals Corporation at an 80% premium in a multi-billion transaction. “HNF” owns the ‘Twinkling Star’ mine and its associated smelters. Sources in China claim that the mine has a twenty year life, not four as per Mr. Ecclestone’s article. Clearly, MinMet, as the controlling shareholder of HNF, was knowledgable as to the expected time of full depletion. Prior to the buyout, MinMet would also have been ‘in the know’ as to the local government’s decision to cut off the electricity to eight competing smelters on April 9, 2015. In other words, the minority shareholders of HNF were [fill in the blank] by its 51% shareholder. In any case, two publicly held producers of antimony are left: Mandalay Resources (MND.TO) and U.S. Antimony Corporation (UAMY on the NYSE MKT.)

    2. Sources in China claim that MinMet’s target price for antimony is $7.50 per pound.

    3. The article does not discuss three areas of potentially large supply based on historic records and current events:

    April 19, 2015 - 4:53 AM

  • Herbert Denton

    a. Russia…for example, a new mine, RusAnt, began production in April.

    b, Bolivia, historically competed with Mexico and China as world’s largest producer, has seen the EMUSA mine re-opened after several defunct decades.

    c. Mexico. Five nearly defunct mines have been revived by U.S. Antimony Corporation. The largest, The Wadley Mine, is second only to Twinkling Star, with its 300 miles of tunnels.

    4. For reasons unknown, Mr. Ecclestone casts doubt on whether or not the production from Australia’s Hillgrove mine is being processed at U.S. Antimony’s smelter in Madero, Mexico. It is.

    April 19, 2015 - 5:02 AM

  • Christopher Ecclestone

    I, and others, will believe the receipt (and processing) of product from Hillgrove when it is eluded to in a 10Q or 10K rather than just via smoke signals issuing from south of the border (or midtown Manhattan).

    April 19, 2015 - 11:57 AM

  • Christopher Ecclestone

    One needs to avoid simplistic views of HNC… This company is (was) China’s largest producer of Zinc and Tungsten, amongst a whole plethora of metals it produces. Twinkling Star is but one of its assets.. and a steeply declining one… anyone operating under the thesis that there is a 20-yr mine life at Twinkling Star is deluding themselves…

    Outside the antimony “bubble mindset” I can think of many good reasons for any buyer to pay up to take over a zinc company at this point in the cycle. The premium paid by Minmetals has nothing to do with Twinkling Star or even antimony.

    April 19, 2015 - 12:10 PM

  • Dr.Michael von Hirschberg

    China Min-Metals would categorize Twinkling Star as a rounding error + or -be it a winner or loser. .HNF was acquired for multiple reasons.
    But, the point of the article is really the collapse of China’s dominance in the Sb space. The the entire production area surrounding Twinkling Star in now under public scrutiny as Sb has been placed in the Public Penalty Box for environmental hazards..and it may well be true-if any of the readers has visited this area.. Recalling The Little Red Book period under Mao, the Public Penalty Box has a crowded queue of Sb producers that need further education–many never to be seen again..
    So, I suggest that we are at the start of the Sb production disruption–and by not even close to the end. So, it is irrelevant if Twinkling Star last 5 months or another 50 years of production left: the Game of international price control is over for China. The Sb space is ripe for shuttered Sb mines or new production coming on stream outside of the grasp of the the PRC’s Penalty Box.

    I would suggest a revolver to the temple for anyone shorting the Sb space.. if u doubt my words,please, go ahead–try to find one kg-one lbs- or one metric ton of Sb concentrate uncommitted for sale anywhere in the world. If you do find, please contact me below and will give you a finder’s fee.

    by the way, they closed 11 mines not 8.

    Dr. Mike Hirschberger. .
    305 300-3837

    April 20, 2015 - 11:47 AM

  • Dr.Michael von Hirschberg
    April 20, 2015 - 7:07 PM

  • Herbert Denton

    Yeah, Christopher….you and others (both of them) demand more than smoke. I do not know what you are smoking or even if you are inhaling or even if you inhaled , did you forgot to exhale.

    Might be best to actually read US Antimony’s 10-K on the subject of Hilllgrove before embarrassing yourself in print.

    BTW, how is your friend who is short UAMY , which is up nine (9) days in a row doing. Should he double up or is he double upped?

    April 21, 2015 - 3:40 AM

  • Christopher ecclestone

    Bert. Off again hunting imaginary shorts! I would not recommend anyone short the stock as it is so ripe for”regime change”. Overdue even.

    April 21, 2015 - 5:50 AM

  • Herbert Denton

    There is nothing imaginary about 560,000 shares sold short.

    Also, there is nothing imaginary about the historic triumvirate of antimony producers in China, Bolivia and Mexico that have traded being the biggest producing country in any given year. To describe future world production without ANY reference to the rejuvenated production fro Bolivia and Mexico (and coming on, Russia, as well) is akin to describing Christianity with no reference to Jesus Chrsit or the Holy Ghost. The analysis is thin.

    April 22, 2015 - 5:19 AM

  • Christopher Ecclestone

    Mexico is not in any historic triumvirate of Sb producers… the mines there are minuscule and barely profitable and that is clear from the fact that most of the operators are in default on their financing lines from UAMY.. As for Watley its not even functioning.. Let’s put it this way, If Mexico was producing at the levels that you posit then the UAMY roaster there would not be bothering bringing in product from Australia…

    Bolivia has always been a producer at various levels.. I have been an advisor to RusAnt so don’t need lecturing on what may or may not be coming out of Russia.

    April 22, 2015 - 7:18 AM

  • chelsea

    Is the author also the CEO of an mining company Geodex? Why was that not disclosed if so?

    April 29, 2015 - 9:13 AM

  • Christopher Ecclestone

    Chelsea, I am indeed… But I would not call Geodex a mining company as it is not even vaguely near mining.. hence the movements in the price of Antimony really have no impact on Geodex’s stock price… as you can see from its current becalmed state…

    April 29, 2015 - 12:49 PM

  • jon

    Mr. Ecclestone, Do you still believe in the thesis of this article? If so how long does it take to play out in an environment where there seems to be lots of antimony around and China exporting a majority of it?

    December 8, 2015 - 12:10 PM

  • Christopher Ecclestone

    Good question, Jon. In some ways recently I have been ruing that article which was written when Antimony Trioxide was trading around $8,500 and recently has hit $6,000 per tonne.

    The best way to describe it is Apocalypse “Just Not” Now. The dynamics are still unfolding. Twinkling Star is declining as projected. Sb ended up getting caught in the backwash of the FANYA debacle with Bismuth and Indium being the too other metals most favoured by the gamblers in that exchange. Stocks of the metal has been spilling out of accounts there and souring the market.

    I also suspect the Chinese are once again disciplining the market, punishing those Westerners who dare to consider producing. Cons Murch in South Africa was put in mothballs just over a year ago and a sale process begun. Understandably buyers are not queuing around the block. That also KO’s the Indian processing industry who were the recipients of the Sth African output. Every cloud has a silver lining for the Chinese when they fiddle with markets.

    However, an Antimony day of reckoning is coming and the Chinese will deserve what happens to them then.

    December 8, 2015 - 1:22 PM

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