 armenian moly coddled something funny happened on the way to the roaster molybdenum is a metal that doesn t lose its cool used in a variety of alloys for steel it remains rigid at 3000 degrees fahrenheit and doesn t melt until 4730 degrees f a point at which everything but four other natural elements have vaporized and disappeared the biggest source of demand for molybdenum alloys is in stainless steel production and as this also consumes nickel the price of molybdenum usually moves in parallel with nickel if nickel and stainless steel prices are rising so is molybdenum when they decline moly follows them down at least that s the theory the reality since midmay is that nickel has been falling in price from a peak just short of us 25 per pound at the same time molybdenum jumped to 32 lb in may then 35 lb in june it remained at that price until midoctober when it fell back a dollar another theory is that since molybdenum is a vital ingredient in the manufacture of highpressure oil and gas pipes along with containment vessels for newgeneration nuclear reactors its price will correlate with rising demand for oil gas and uranium they should drive moly pricing even if nickel and stainless steel fail and there s more although the global supply of molybdenum ore may be plentiful the capacity to roast the concentrate into metal is quite constricted on the way to the moly roaster therefore the market is sensitive to the possibility of shortages deep in the heart of the caucasus armenia produces a tiny proportion of the world s supply of molybdenum metal about 2 it mined 10 million tonnes of ore in 2006 converted this to 8700 tonnes of concentrate and exported 4888 tonnes 108 million pounds of ferromolybdenum for a declared value of 1578 million that represents an average price of 1461 per pound these statistics are difficult to come by they have been sourced for this report from a variety of published sources from telephone calls to the armenian state statistics office and from mining companies working in the country there is also an oddity in the export valuation the mining companies in armenia have told mineweb that they produced 96 million pounds of molybdenum metal from their concentrates in 2006 if this is valued at the average price for 2006 of 2650 lb the revenue value of output should have been 254 million about 100 million in moly value seems to have been coddled in the oldfashioned sense of that english term boiled and vaporized that is roughly 10 one dollar in ten of armenia s total export value in 2006 of 9851 million the reason for this uncertainty gains in significance because moly mining appears to be the single largest industry in armenia and is thus vital to the state s economic security moreover cronimet the german mining company which controls armenia s leading moly mine zangezur copper and molybdenum combine as well as its two smelters and roasters is the single largest investor in the armenian economy cronimet says it has invested 70 million in zangezur to date according to the government it promised to invest double that amount in return for the government concession awarded three years ago even if the value data and magnitudes are uncertain this makes the germans very big fish in a very small pond but cronimet on sudbeckenstrasse in karlsruhe is a private company owned by gunter pilarsky and his family it issues no public financial reports and pilarsky refuses to respond to mineweb questions the second moly miner in armenia is an american concern called comsup commodities inc its mine the agarak copper and molybdenum combine is located near zangezur in southeastern armenia officially located on fletcher avenue in fort lee new jersey comsup is owned by ben bollag whose two sons michael and dan are also in the business michael bollag who lists an address in santa barbara california is in charge of the armenian operation in addition to mining at agarak comsup is identified as trading the moly metal which is roasted by amp the acronym stands for armenian molybdenum production under that name it is incorporated as a limited liability concern in germany cronimet controls a majority of the shares in zangezur and holds stakes also in amp and in armenian company plant of pure iron oag which are also shareholders of zangezur thus there is a crossshareholding linking all three in august 2004 the then minister of trade and economic development karen chshmaritian announced that comsup and cronimet were to be linked in the shareholding structure of the moly business we have agreed in principle the minister was quoted as saying that cronimet and comsup will participate in the privatization on the fiftyfifty percent share basis but this didn t happen instead cronimet took zangezur comsup agarak what happened to change the plan no one in the armenian government will say nor anyone at cronimet and comsup the spokesman of the armenian ministry of natural resources artsum peponyan told mineweb that he could not say what had happened to comsup at zangezur but he said he could confirm that cronimet holds 60 of the shares of the mining company another 15 were held by pure iron and 125 by amp he claimed that for its stake cronimet made a down payment of 5 million in 2004 with another 87 million in 2005 altogether among the several shareholders peponyan said that zangezur had been sold for 132 million plus investment undertakings a total of 200 million is obligated for investment to 2012 by that time annual ore processing capacity should be 125 million tonnes cronimet declined to discuss these figures regional press reports of government announcements indicate that in early 2004 comsup paid the armenian government euro600  for 100 percent of the shares in agarak it also accepted the condition that it would invest another euro35 million in the mine over the next two years the privatization and concession deal also appears to have set production targets beginning from january 1 2005 agarak was obligated to lift its ore throughput to 3 million tonnes and its output of moly concentrate to 700 tonnes equivalent to 770000 lbs of metal michael vogel is a german executive of cronimet in karlsruhe he told mineweb we are a civilized german company and we don t have to answer questions he volunteered that cronimet mines moly at zangezur and then processes it at two local plants pure iron and amp he added that cronimet does not export concentrates but instead delivers these to pure iron and amp according to vogel cronimet s annual output is about 8000 tonnes of concentrates representing about 88 million pounds of metal cronimet s website reports 2006 production of 7940 tonnes of concentrate vogel declined to say what relationship his company has with pure iron and amp an armenian media report claims cronimet has a controlling stake in pure iron vogel declared we have no relationship with comsup a website statement by amp claims that comsup is the main consumer of amp production at amp s plant there was reluctance to disclose its input or output volumes or its relationship with comsup the secretary of the plant agreed to lift the director s telephone receiver but declined to give his name or her own asked for their production figures amp refused to answer at agarak there is an even deeper mystery according to a report on october 13 from the armenian news agency arminfo and the russian news agency interfax comsup has sold its concession the georgian madneuli mining company which is owned by the moscow holding industrial investors has acquired armenia s agarak copper and molybdenum combine ammk from comsup commodities of the us a source close the armenian government told interfax the deal gives industrial investors the right to develop the agarak coppermolybdenum deposit comsup commodities acquired a 100 percent stake in ammk in may 2004 it has invested over 20 million euro in the company asked about this report oleg rumyantsev spokesman for industrial investors in moscow told mineweb he had seen the report and had spoken to madneuli s chief executive koba nakopia according to rumyantsev this is all incorrect information madneuli is not trying to get control of agarak this is a mistake contacted at madneuli nakopia refused to answer questions the regnum news agency also issued the following statement from madneuli jointstock company madneuli being the property of the russian financial and industrial group industrial investors denies the information on acquisition of shares of the agarak coppermolybdenum combine madneuli does not conduct any negotiations concerning the acquisition of the agarak coppermolybdenum combine i do not know at all from where the mass media took the idea that we wish to get this armenian company noted koba nakopia mineweb asked the chief of the arminfo news agency emanuel mkartichyan where the news report had come from and whether arminfo had published a correction or retraction mkartichyan refused to reply a source in the agency claimed the report had come from a freelancer michael bollag was asked what has been happening at agarak he would not respond instead one source at the company volunteered i know the answers to your questions but i am not authorized to give you the answers he said agarak is producing 700 tonnes of concentrate per annum with an equivalent of 770000 lbs of metal he refused to say if the concentrate is processed locally or if moly is exported by comsup rustam raznikov heads comsup s moscow office he refused to answer the telephone a second source at comsup told mineweb that his company has been taking 1 million pounds of moly out of armenia annually he added that the agarak combine is also producing 2000 tonnes of copper concentrates per month author john helmerposted tuesday 30 oct 2007  