Erdene Resource Development Corporation said that steelmakers will struggle to secure supplies of molybdenum in 2011 as the economic crisis spurs producers to shelve 100 million pounds of new supply.

Mr Peter Akerley CEO of Erdene said that it has cut its planned initial output pf concentrate to between 5 million and 6 million pounds down from 20 million pounds. It is seeking to build Mongolia’s first molybdenum mine and start production in 2012.

He said that molybdenum prices have fallen 73% from November as the global recession curbed stainless-steel demand for kitchenware and building decorations. Erdene is seeking partners to help fund its mine. He added that "We would be looking at somebody who would help with investing in the project through supply agreements. It has held preliminary talks with a number of Chinese partners including China Molybdenum Co. The talks haven’t advanced yet."

(Sourced from www.bloomberg.net)