Molybdenum: The Metal that Could have Saved 9/11

There are many things I love about the summertime.

Warm weather, light clothing, trips to the beach, more time with the kids, back yard cookouts...

The list goes on and on. But there's one thing it doesn't include, and that's drunken 50-something women making spectacles of themselves in front of my family.

Jenny McDermott was a friend of my wife's cousin.

She had summer house a couple miles down the road in Fenwick Island; when she showed up at my Bethany Beach home 2 weekends ago, she seemed charming enough.

I had her all sized up in the first 5 seconds...

She was one of those older, free-spirited women you just know was extremely popular and fun to be around during the carefree seventies.

Unfortunately, the 70s ended 30 years ago... and Jenny still hadn't gotten the memo.

Fifteen minutes after arriving, she was barefoot and halfway through her second glass of sangria. An hour later, at just barely past noon, she'd had moved up to vodka shooters.

By 1:30 she was nagging somebody to drive her to the nearest convenience store to get some cigarettes.

And in between those milestones, she did everything from lovingly groping my children, to breathing her liquor breath directly into my ear as she uttered incoherent yet unmistakably suggestive phrases right in front of my wife.

Jenny was a world-class train-wreck...

But for one big reason, I'm glad she came along that Saturday.

You see Jenny brought along her boyfriend William, a Syracuse attorney with almost 30 years of experience in the field of construction litigation.

He was tall — at least 6'4'' — and a former basketball and lacrosse player for the Orangemen. He also looked remarkably good for a man pushing 60, and in stark contrast to Jenny, he was soft spoken and sharp as a tack.

So the time I wasn't spending watching Jenny to make sure she didn't jump in my pool, or take her sundress off in front of everyone, I spent talking with William...

Actually, to be fair, I did most of the listening... Because when he started to tell me, in frightening detail, about what might become the most controversial industrial litigation case to come around in decades, I knew it was time to shut my mouth and open my ears.

It all started innocently enough...

We were drinking beers beside my outdoor wood-burning oven — indulging in the aroma of the 20-pound leg of lamb cooking inside it — when  I casually mentioned an investment angle we'd been looking into for the last couple of weeks.

If you recall, a little while back I wrote about molybdenum (moly for short) — a key component in a wide variety modern high-strength, heat-resistant steel alloys.

Now, if it wasn't for my investment background, heat-resistant alloys would have been only of interest to me because the custom-built stove we were using to cook the lamb had nearly caught fire couple times before we switched to a special metal to line its interior.

To a vast majority of people the topic was of little interest.

When I mentioned molybdenum to William, however, his facial expression — which up to that point had been the standard impassive look I usually get from people listening to me ramble on about my work — lit up with interest.

“My firm's spent the last five years building a wrongful-death case against the designers and builders of the World Trade Center. The whole theory of the case hinges on molybdenum,” he said, sipping his Corona.

The hair on the back of my neck stood up. “What do you mean?”

“Pretty simple really...  Tishman Realty and Construction — the company that erected the WTC in the early 70s — used ASTM A36 steel, a non-molybdenum carbon steel, for the towers' framework.”

It didn't take a specialist in the field to figure out the implications... “That would have affected the metal's breaking point, right?”

“It sure would've.” William nodded. “When engineers talk about breaking points, they're talking about 'tensile strength'. It's how much strain something can take before failing. A36 has a tensile strength of about 60,000 pounds per square inch and melts at around 2500 degrees Fahrenheit. Raw Molybdenum has a tensile strength of 120,000 pounds per square inch and melts at 4700 degrees Fahrenheit.”

“I've been reading that molybdenum is primarily used for alloys usually, though... ”

“Right, of course; and the some of the alloys that use Molybdenum are twice as strong as pure molybdenum itself. TZM is a prime example. It's used for things like rocket engine nozzles.”

“So that would make it,” I did the math in my head, “what, about 4 times as strong as non-molybdenum steel?

“In very special forms, yes... But more a more realistic example is kind of molybdenum alloy called type1 316 LM. It's commonly used in construction, and it's got a minimum tensile strength of 75,000 pounds per square inch, and a melt point about 300 degrees higher than a36.”

I thought about the temperature in the wood-burning oven, which could go as high as 800 degrees... “300 degrees doesn't seem like much a difference when it comes to thousands of gallons of jet burning jet fuel, though.”

“Well, it doesn't seem like a lot, but there's more to it than just melt points. The really important factor in the World Trade Center was thermal expansion - which is a measure much density a metal looses under heat... Less density makes things softer. Molybdenum alloys are much better at resisting heat even before they start to liquefy.”

“I remember the forensics saying that The World Trade Center's metal framework failed a couple hundred degrees below the steel's melting point.”

“Exactly. The beams just got hot and bent. And the thermal expansion of a moly-based metal like type 316 would have been about half that of the stuff they used in the towers.”

"Which means the moly metal would have been twice as good at retaining tensile strength at high temperatures?"

"Twice as good," he replied with a sigh.

“That would have given the people more time to escape,” I muttered.

He nodded sadly. “It could have saved September 11^th...”

The chills tingled up and down my spine like a procession of marching cockroaches. Somewhere in the background, the sound of Jenny's bellowing laughter pulled me back to reality.

“Funny thing is," he added, "with most new construction today, this is a dead issue... The super high rises like the Burj Khalifa in Dubai and the Patronas Towers in Kuala Lumpur are all built out of molybdenum-alloy reinforced concrete — not steel.”

“You think they learned from our mistakes?”

William just looked at me for a moment and shrugged. “Given the way things are in the world today, I'd be amazed if any Muslim nation took a chance with a non-molybdenum highrise. Frankly, I can't believe we still do it here today.”

“Yeah,” I sighed, finishing off my beer.

Having heard everything William had to say, I was more than ready to join Jenny for a couple vodka shooters.

“World's a much different place when you start opening your eyes,” he said softly as he finished his beer.

Later that night, after we'd finally reclaimed our house from the horde of guests — and recovered emotionally from Jenny's onslaught — I sat at my desk and surfed the web, doing some more research.

It didn't take long to reconfirm what I'd already knew.

Even if William's multimillion dollar law suit never sees the light of day, molybdenum is far and away the most important alloy metal there is on the market today.

Not only is it pretty much essential to things like car engines, air frames and oil pipelines; but with modern construction pushing the boundaries of possibility every day, demand is set to rise for decades to come.

In fact, even the major economic downturn of 2008 hardly did anything to stem molybdenum demand globally.

These years of consumption did, however, take a major bite out of global supply...

Of course, the problem that guys like William don't worry about — and guys like me do — is who will benefit from this growing demand.

The answer to this, as it so often is these days, is the Chinese.

I have to admit... With foresight like the kind they showed in buying up all the world's major Molybdenum producers for the last 15 years, they deserve the success that's coming their way.

In 2009, they had close to 97% of the active molybdenum producing mines under their control.

Predictably, as they'd done before with rare earth metals and lithium, as they closed in on a monopoly, they started to cut exports in an attempt to control prices.

Now to most people, this situation looks like basic extortion.

One nation can't monopolize something as crucial as molybdenum just to control prices, can it?

The answer, unfortunately, appears to be yes, they can... or at least they can try...

Because even with the Chinese undergoing a relentless molybdenum shopping spree, they missed perhaps the most important molybdenum reserve ever discovered.

And this is the part that should make you happy. It made me ecstatic.

This reserve is located in Idaho, and once the site is mined, this one deposit will be big enough to supply global demand — all by itself — for an entire decade.

In all, there's about $70 billion in molybdenum (at current prices) in the ground, and all of it is owned by a single North American company.

The real irony here is that as hard as the Chinese tried to control the market, all they really did was set this tiny mining exploration company up to multiply its market cap by a factor of hundreds, maybe thousands.

It's the sort of investment that's got 'early retirement' practically stenciled on it.

For a full report on this company, and the record-setting profits they're about to make spoiling China's carefully constructed plan to control the world molybdenum market, click here.

And Jenny, if you're out there somewhere, it was a pleasure meeting you. When you realize that you left your license and cell phone at my house, just give me a call.

William's got my number.

To your wealth,

Brian Hicks

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