New molybdenum mine in the Pilbara

Australia's first large molybdenum mine is being developed by junior explorer company Moly Mines.

The move follows the findings of the company's recently completed feasibility study and comes with forecasts of a bullish molybdenum market, with strong demand but limited supply in both the US and China.

Molybdenum is used as an alloy in high-strength steels.

The proposed 20 million tones a year molybdenum/copper open-pit mine and concentrator is at Spinifex Ridge in Western Australia's east Pilbara region.

It is expected to supply 5% of world molybdenum production.

Production is expected to commence by mid 2009, and the mine life is anticipated to be 20 years.

Product will be transported 150 kilometres to Port Hedland for export.

"We recognise the area is pretty hot for services ... we might have to compete, but they do exist," said Moly Mines general manager Collis Thorpe.

Securing staff would also be a challenge, as it is for every other player in the mining industry.

"We've given ourselves a lot of lead time ... to get bums on seats in the Pilbara, which is hard work.

"We hope to pick up people with specific expertise in molybdenum from South and North America."