Sumitomo Electric Industries Ltd.,headquartered in Osaka, Japan, has started tungsten refining and scrap recycling operations in the United States. Sumitomo Electric Carbide Inc., a subsidiary of Sumitomo Electric, and New York Tungsten LLC, a subsidiary of Buffalo Tungsten Inc., a tungsten powder producer in the United States, have established a joint venture company, Niagara Refining LLC (NIRE), to produce tungsten trioxide (WO3) from raw ore as well as from recycled material at NIRE’s facility in Depew, N.Y.

Operations are set to begin in March 2014.

Until now, A.L.M.T Corp., a subsidiary of Sumitomo Electric, has imported WO3 from China and other countries to produce tungsten carbide powder as a raw material for carbide tools. A.L.M.T. also has been engaged in tungsten scrap recycling at itsToyama, Japan, plant since 2011.

With the start of NIRE’s operations, Sumitomo Electric will produce raw materials for tungsten by both refining tungsten ore from tungsten mines and by recycling scrap collected from the market.

Sumitomo Electric says it will accelerate its activities to facilitate a stable supply of tungsten raw materials through using WO3 produced by NIRE and tungsten carbide powder production by A.L.M.T. This will allow Sumitomo Electric to control the supply chain from raw materials all the way to the finished product, which will further strengthen its competitiveness and achieve synergy through cooperation within the group, according to the company.


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Sometimes finding a mineral deposit is about having found it once before. Cadillac Ventures (V.CDC) CEO Norman Brewster had brought the Burnt Hill tungsten/tin mine to test production in the early 1980’s at which point the price of tungsten collapsed. For 30 years little work was done on the deposit.

Located 110 kilometers north of Fredericton New Brunswick, the Burnt Hill area was purchased by Brewster and was joint ventured in 2007. Because the work on the area was historical Brewster explained, “We have to recreate the work I did in the 1980’s. Redo the bulk sample and redo the drilling”.

This would advance Cadillac to feasibility at Burnt Hill itself. However, on November 5, 2013, Cadillac announced that it had discovered a second mineral occurrence a Wolf Ridge, 3-6 kilometers away from the original Burnt Hill deposit. This second occurrence was discovered by the use of airborne data and trenching. The size of this occurrence is comparable in scale and grade to the original Burnt Hill deposit.

Brewster points out that the new occurrence is somewhat different from the Burnt Hill deposit as it contains much more tin. “That’s important because the tin market is a bigger market than the market for tungsten.” Tin is something of a stealth strategic metal as it is used in the solder which is used in electronic devices. (For example, an I-Pad uses between 1-3 grams of tin.)

A couple of days after announcing completion of the acquisition of Allegheny Technologies Incorporated’s (ATI) tungsten materials business, Kennametal Inc. (KMT) at its Analysts Day held on Nov 6, 2013 provided details on integration synergies expected out of the transaction.

Let us first get a quick look at the acquisition details provided earlier by Kennametal:

The agreement was announced by Kennametal on Sep 16, 2013. Allegheny Technologies’ tungsten materials business is a leading producer of tungsten metallurgical powders and also provides tooling technologies and components. The business has two divisions namely, ATI Firth Sterling and ATI Stellram. Annual revenue generation capacity of the business is $340 million and employs 1,175 people operating from 14 facilities worldwide.

The transaction value was fixed at $605 million, which Kennametal paid using its available cash and borrowings under its existing revolving credit facility. The company anticipates it will realize $30-$45 million in annual savings (versus $30-$40 million expected earlier) via consolidation of both the operations, reduction in administrative overhead costs and leveraging supply chain. Integration costs of $40-$50 million are anticipated to be incurred through fiscal 2016.

Also, the management of Kennametal provided a near-term outlook on the acquisition. Sales within $200-$220 million range with neutral earnings impact is anticipated for the eight months of fiscal 2014. Cash tax benefits of $60-$70 million are also expected to be realized during the period.  

This acquisition builds on Kennametal's Emura and Stellite acquisitions, while also increasing the company's presence in key growth sectors, including aerospace, energy and associated process industries. Further, it has also accelerated Kennametal’s plan for an advanced tungsten carbide facility. The company has lowered its capital spending plans in a big way, from $65 million to $35 million.

Besides the acquisition details, Kennametal at its Analysts Day also discussed its long-term targets/goals. The company anticipates achieving organic growth rate of 6%-10% (CAGR), EBIT % to be greater than equal to 15%, earnings per share to grow within 15%-20% (CAGR), capital expenditures to be 3%-4% of sales, and free cash flow to be greater than or equal to net income. By fiscal 2017, the company anticipates to double its base business to $5-$6 billion range.

The company also maintained its previously provided guidance for fiscal 2014. These include sales within $2.7-$2.8 billion range, organic growth within 4%-6% range, earnings per share within $2.90-$3.05 range, cash flow from operations within $330-$380 million range, capital expenditure within $130-$150 million range and free cash flow within $200-$230 million range.

Kennametal Inc. currently has a market capitalization of $3.6 billion. The stock carries a Zacks Rank #3 (Hold). Other stocks to watch out for in the industry are Xylem Inc. (XYL) with Zacks Rank #1 (Strong Buy) and Lincoln Electric Holdings Inc. (LECO) with a Zacks Rank #2 (Buy).


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Allegheny decided to divest its tungsten materials business so that it can focus more on its core businesses – High Performance Metals and Flat-Rolled Products. The acquisition is also expected to increase Allegheny’s financial flexibility and simplify its capital allocation and deployment.

Allegheny’s tungsten materials business operates through roughly 1,175 employees across 14 operating facilities globally and consists of two market-leading divisions – ATI Firth Sterling and ATI Stellram. It produces tungsten powder, tungsten heavy alloys, tungsten carbide materials and carbide cutting tools. The business unit generated $338.6 million of total net revenues and $37.2 million of operating profit for the year ended Dec 31, 2012.

Kennametal paid for the acquisition partly by cash and partly by available borrowings under its existing revolving credit facility.

Allegheny’s sole financial advisor and legal counselor for this transaction were The Goldman Sachs Group, Inc. (GS) and K&L Gates LLP, respectively. J.P. Morgan Securities LLC, which operates as a subsidiary of JPMorgan Chase & Co. (JPM), acted as the financial advisor to Kennametal on the transaction.

Allegheny posted its third-quarter 2013 results on Oct 23. The company reported loss from continuing operations of $28.4 million (or 27 cents per share) compared with a profit of $31.3 million (or 29 cents per share) recorded a year ago. After excluding a loss of 4 cents per share due to the effects of income taxes reported in domestic and foreign jurisdictions, loss from continuing operations was 23 cents per share, narrower than the Zacks Consensus Estimate loss of 28 cents.

Allegheny recorded a loss of 5 cents per share in the reported quarter from discontinued operations that include the tungsten materials business and the iron castings and fabricated components businesses.

Revenues slipped 14% year over year to $972 million, missing the Zacks Consensus Estimate of $1,051 million. Revenues were hurt by lower demand across several end markets including oil and gas, jet engine aftermarket, electrical energy, and construction and mining. Allegheny also witnessed lower pricing for many of its products and a decline in raw materials surcharges.

Allegheny expects business conditions to remain challenging through the end of 2013 and potentially in 2014 due to the U.S. debt ceiling and other fiscal policy issues.

Allegheny is primarily focusing on cost optimization and is accelerating its cost reduction efforts. Allegheny, through this move, was successful in gross cost reductions of $123.4 million during the first nine months of 2013, a pace which is well ahead of its 2013 target of $100 million in new cost reductions. The company remains well positioned to align its production, and inventory levels to match the demands of its customers and end markets.


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Specialty metals maker Allegheny Technologies Inc. has completed its earlier announced sale of its tungsten materials business to Latrobe, PA-based wear-resistant products company Kennametal Inc. for $605 million. Shares of Allegheny moved up as much as around 2% during the trading session following the declaration of the news.

Allegheny decided to divest its tungsten materials business so that it can focus more on its core businesses – High Performance Metals and Flat-Rolled Products. The acquisition is also expected to increase Allegheny’s financial flexibility and simplify its capital allocation and deployment.

Allegheny’s tungsten materials business operates through roughly 1,175 employees across 14 operating facilities globally and consists of two market-leading divisions – ATI Firth Sterling and ATI Stellram. It produces tungsten powder, tungsten heavy alloys, tungsten carbide materials and carbide cutting tools. The business unit generated $338.6 million of total net revenues and $37.2 million of operating profit for the year ended Dec 31, 2012.

Kennametal paid for the acquisition partly by cash and partly by available borrowings under its existing revolving credit facility.


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Using data from a large US health survey, the study has shown that high tungsten levels – as measured in urine samples – are strongly linked with an increase in the occurrence of stroke, roughly equal to a doubling of the odds of experiencing the condition.

Conducted by a team from the University of Exeter, the study represents the most comprehensive analysis to date of the potential health effects of the metal.

According to figures from the World Health Organisation, stroke is currently the second leading cause of death in the Western world, ranking only second to heart disease. It is also the leading cause of disability in adults, often resulting in loss of motor control, urinary incontinence, depression and memory loss.

The research used data from the US based National Health and Nutrition Examination Survey (NHANES), analysing information for 8614 participants aged between 18 and 74 over a 12 year period.

Higher tungsten levels were found to be strongly associated with an increase in the prevalence of stroke, independent of typical risk factors. Importantly, the findings show that tungsten could be a significant risk factor for stroke in people under the age of 50.

BlueFire Equipment Corporation (BLFR) announced today its team of scientists and engineers are working to finalize production of custom designed proprietary polycrystalline diamond cutter (PDC) tungsten carbide drill bits for its international clients.

Using advanced manufacturing techniques, BlueFire is optimizing and adapting its leading edge tungsten carbide drill bit technology for international applications.

Chairman and CEO of BlueFire Equipment Corporation William A. Blackwell said, “BlueFire’s team is customizing its highly engineered drilling equipment for very deep, high pressure environments and dense, hard rock formations.” He added, “We are casting these PDC tungsten carbide drill bits using our company’s advanced manufacturing techniques and made-to-order design specifications. The result is an improved product with the same cost and time saving attributes as our previous designs.”

Toyota Motor Corporation was honored this month for its ongoing efforts to promote a sustainable society by reducing, reusing and recycling resources, such as tungsten and tungsten carbide materials.

At this year's 3Rs (Reduce, Reuse, and Recycle) Awards hosted by Japan's Ministry of Economy, Trade, and Industry (METI) 3Rs Promotion Council, Toyota and Toyota Tsusho Corporation shared the 2013 Prime Minister's Prize.

Separately, Toyota and Sumitomo Electric Industries, Ltd. shared a Rare Metal Recycling Award from the Japan Environmental Management Association for Industry (JEMAI) presented earlier this month at the Awards for Resources Recirculation Technologies and Systems. The award, announced on October 11, recognized the companies' jointly developed system for recycling the rare metal tungsten.

Toyota was one of the first automakers to respond to the implications of mass production and disposal of vehicles. In 1970, Toyota and Toyota Tsusho Corporation founded Toyota Metal Co., Ltd., the first end-of-life vehicle shredding plant established by an automaker. The Toyota Group (consisting of 17 companies including TMC and Toyota Tsusho Corporation) has remained committed to the responsible disposal of end-of-life vehicles, and has developed a wide variety of world-first recycling technologies and systems to recover tungsten materials.

Toyota is also working to recycle rare metals that are used in non-hybrid vehicles. In 2010, Toyota teamed up with Sumitomo Electric Industries to establish a business focused on recycling tungsten, which is most commonly used to produce highly resilient carbide tools. The system combines processes for sorting and collecting scrap from cemented carbide products with new, world-first recycling technology to enable 100 percent recovery and recycling of tungsten in cemented carbide scrap. To date, the venture has recycled 75 tons of tungsten.


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BlueFire Equipment Corporation announced today its team of scientists and engineers are working to finalize production of custom designed proprietary polycrystalline diamond cutter tungsten carbide (PDC) drill bits for its international clients.

“BlueFire’s team is customizing its highly engineered drilling equipment for very deep, high pressure environments and dense, hard rock formations.”

Using advanced manufacturing techniques, BlueFire is optimizing and adapting its leading edge drill bit technology for international applications.

Chairman and CEO of BlueFire Equipment Corporation William A. Blackwell said, “BlueFire’s team is customizing its highly engineered drilling equipment for very deep, high pressure environments and dense, hard rock formations.” He added, “We are casting these tungsten carbide PDC bits using our company’s advanced manufacturing techniques and made-to-order design specifications. The result is an improved product with the same cost and time saving attributes as our previous designs.”

Over the course of a drilling program, BlueFire’s technology has demonstrated the potential to save operators millions of dollars. As previously announced, the BlueFire PDC bit drilled in excess of 200 feet per hour in the Powder River Basin, demonstrating excellent performance. BlueFire’s proprietary bit drilled more than 6,000 feet at the Campbell County, Wyoming location.

BlueFire’s exclusive design has the ability to provide higher rates of penetration (ROP) and longer bit runs in hard rock formations and shales, representing a breakthrough in drilling technology. BlueFire bits employ large cutter face volumes for rapid drilling of shales, sandstones, limestones and sticky clays. These tungsten carbide drill bits utilize premium PDC cutters for improved ROP and are designed using directed ports to accelerate cleaning and optimize cooling. Company findings indicate a decrease of more than 30 percent in temperature on the cutting surfaces, drastically reducing cutter wear and extending the life of the bit.

Conventional tungsten carbide drill bits use nozzles that eject drilling fluid into the well bottom resulting in a general application and uneven distribution at the point of contact. BlueFire’s bit design employs strategically aligned nozzles to concentrate high-pressure jet streams directly on the cutting edge, lubricating the interface between the cutters and the rock formation being drilled. Furthermore, improved cleaning and scouring action facilitates removal of cuttings. The result is a bit that runs cleaner and cooler.


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German sawing machine manufacturer, KASTO, has introduced a new, automatic circular saw called KASTOgripspeed C10. It can be fitted with equipment for continuous stock infeed and with various outfeed options, including sorting of cut pieces.

The high performance machine is designed to process materials up to a tensile strength of 1,400 N/mm². Tungsten carbide tipped saw blades of 360 mm diameter and either 2.5 or 2 mm thick minimise the kerf and hence the amount of metal lost as swarf. For some materials, coated or cermet blades are used.

All such blades have the additional advantage that thin or thin-walled materials can be cut safely and efficiently, expanding the range of applications for which the KASTOgripspeed C10 is suitable. Particularly helpful is infinitely adjustable workpiece clamping with a force of 2 to 12.5 kN for safely securing thin-walled tubes and profiles.

Cutting range of the saw is from 15 to 100 mm diameter for rounds or up to 80 mm for square stock. The smallest cut-piece length is 8 mm, while remnant length is only 65 mm. Material feed stroke is 500 mm, or up to 9,999 mm with multiple feed.

Saw drive power is high at 11 kW to ensure efficient cutting of all type of material. Infeed speed ranges from 10 to 4,000 mm/min and is infinitely variable. The same is true for blade speed, which is adjustable from 17 to 175 m/min. Contributing to short idle time is 10 m/min rapid lift of the saw blade at the end of each cutting cycle.

To maximise productivity, continuous material infeed and outfeed is needed. KASTO offers a wide range of roller conveyors and inclined magazines for bar lengths up to 12 metres. As an alternative to inclined magazines, loaders are available for bundles up to a maximum of 5 tonnes. There are also flat and universal magazines for rectangular and profile materials or for fully automatic processing of cutting orders of small to medium batch sizes.

Several possibilities are available for the outfeed side, including conveyors and various types of automated sorting systems.


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