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UPDATE 1-Spanish Tungsten Mine Heads for Full Output

Chelyabinsk Zinc Swings to Quarterly Net of 458 Million Rubles 

SYDNEY, June 17 -- Tungsten production from Spain's Los Santos mine will rapidly build to its full rate by the third quarter of 2010 to meet a global recovery in demand after being idled last year, Australia-listed owner Heemskirk Consolidated &lt;HSK.AX&gt; said.
Los Santos, the world's third-largest largest tungsten mine outside of China, was halted by Heemskirk in mid-2009 only months after it was commissioned to install new ore milling equipment.
&quot;Los Santos will be up in the next couple of months to that target rate of 90,000-100,000 mtu (metric tonne units) a year,&quot; Executive Director Peter Bird told Reuters.
Heemskirk continued to produce tungsten concentrate from stockpiled ore at the mine during the maintenance work and resumed mining earlier this month, Bird said.
At full production, Los Santos will rival in size the giant Panasqueira mine in Portugal owned by Sojitz Corp &lt;2768.T&gt; and operate at nearly twice the rate of Peru's Pasta Bueno mine owned by Malaga Inc &lt;MLG.TO&gt;, Bird said.
The largest western world mine, North American Tungsten Corp's &lt;NTC.V&gt; 300,000-tonnes-per-year Cantung lode in Canada, was suspended last October.
Tungsten's largest market is in cemented carbides, or &quot;hard metals&quot;, used in industrial applications such as tools and dies. Three times harder than chrome and titanium, it's also used to make armor-piercing bullets and light filaments.
Bird said he expects the move to maximum production to coincide with further improvements in world ammonium paratungstate (APT) prices, which he said are up 30 percent in the last 10 months to around $230 per metric tonne unit, or $23,000 a tonne as demand from manufacturers of industrial tool products recovers. APT is a product of tungsten concentrates.
&quot;Prices are back to where they were before the global financial crisis hit,&quot; he said.
&quot;As industrial production picks up in the western world, we're seeing consumption of the raw material also increase,&quot; Bird said.
Chinese exports of tungsten have slowed to a trickle to ensure there is enough of the metal available to meet growing domestic requirements in manufacturing.
British Geological Survey data shows China's accounts for about 32 percent of the world market for tungsten, twice that of North America.
&quot;While China is the world's biggest producer of tungsten, it's also the world's biggest consumer,&quot; Bird noted.
&quot;Originally China produced an enormous amount of tungsten concentrate that would send all around the world -- and that would have quite an impact on the price. But now as China industrializes it is becoming a net consumer,&quot; he said.
Most Chinese tungsten now only leaves the country in manufactured goods, according to Bird.
&quot;If you went into a hardware store and bought some carbide drill bits that were made in China, they would contain tungsten, that is how tungsten leaves China these days,&quot; not in its raw state,&quot; he said. &quot;That's been a paramount shift.&quot;
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