Friday, June 21, 2024


Dhaka Tribune

Empire Metals, EEE, yes, titanium is nice but not that exciting

EEE is getting very excited by their titanium find at Pitfield. It’s interesting but exciting is too far

Update : 03 Jul 2023, 03:22 PM

Empire Metals (LON: EEE) shares are up 16% in London today. EEE shares are rising on the announcement that the titanium at Pitfield goes much further than at first thought. This is one of those things which is interesting but it's not, we're afraid, terribly exciting. This is because titanium is interesting but not exciting. It's a bulk mineral that goes for bulk mineral prices. Which means there's money to be made mining it, yes, but it's all about the efficiency of the logistics rather than anything else. This really isn't like gold where it's the purity of the ore that is the major determinant. 

Empire tells us that: “Based on the scale of this find, Pitfield has the potential to be one of the largest primary titanium mineral sources discovered globally.” Which is super, no, really. But we do want to insist that we all get this right. That titanium is now on the list of critical minerals is very silly indeed. But, you know, politicians. As we've said before about Empire Metals: “Titanium's a perfectly respectable metal to go mining for but it's not all that valuable. We tend to think of titanium metal, which is, but that's because the metal is difficult and energy intensive to make from the oxide. The oxide is worth hundreds of $ per tonne - which is why we can afford for the major global usage to be the white in white paint. There are plenty of places - usually mineral sands operations - that it's possible to get ilmenite, rutile and so on from which titanium can be extracted. We could, if we like, therefore value Empire Metals as if it has just found a mineral sands deposit. Which would be nice but isn't, actually, all that terribly exciting.” OK, so it's a very big titanium deposit, But it's still ilmenite, rutile or the like, low value industrial feedstocks.

Empire Metals share price from London Stock Exchange

We can see what the market thinks of those titanium claims from the share price chart there. Excitement as people think it's all very valuable and then a fall back from that spike as reality sinks in.

Now do note what we're really saying here. Yes, a large and rich titanium deposit is a thing of value. But the value of the ore, when properly concentrated, is in the hundreds of $ per tonne range. Before transport costs to anywhere that can use it. Forget any ideas you might have about titanium metal at $30 a kg - that's just not the trite part of the market to use as a comparator.

Assume that Empire Metals really has found this titanium, that it all pans out. EEE shares will get rich on the efficiency of exploitation, not the mere existence of the deposit.

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