All right, so Taseko Mines' (AMEX: TGB) last road to prosperity turned out to be something of a dead endat least for now. That doesn't mean this intrepid mid-tier miner won't find an alternative path to expanding mineral wealth in western Canada.

Taseko has found a potential back alley leading straight to profitville. Successful exploration of the company's Aley property in 2010 now has the miner charting a path that leads right through a rare and useful element. The miner has encountered some seriously thick intercepts of high-grade niobium, beginning near the surface, at its Aley property in British Columbia. The discovery appears very promising for supporting a major open-pit mining operation for this obscure resource.

I had never heard of niobium, either, until I first purchased shares of gold miner IAMGOLD (NYSE: IAG) a few years back. By volume, the element is most widely used as an alloying agent in speciality high-grade steels, for use in automobiles, jet engine components, pipelines, and myriad structural applications. In the United States, 76% of niobium consumption (all imported) relates to steelmaking applications. In small quantities, niobium alloys may also be found in medical applications (pacemakers, imaging equipment, corrective optical lenses, etc.), superconductors, electronic components, jewelry, and coins.

IAMGOLD's Niobec mine in Quebec is one of only three major niobium mines in the world, and the only significant producer located outside of Brazil. The operation is a growing and reliable cash generator for IAMGOLD. Following capacity improvements and modifications to its underground mining methods, IAMGOLD is targeting between 4.7 million and 5 million kg of production for 2011, at an operating margin of $15 to $17 per kilogram.

Growing demand, meet static supply
Global reserves are estimated at about 2.9 million tons, with annual production of 62,000 tons recorded for 2009. Niobium prices are holding steady near $50 per kilogram, but the element's range of applications results in multiple fronts for potential demand growth. As Taseko CEO Russell Hallbauer explains: "With limited near-term niobium production on the horizon and demand steadily growing, an open pit mining operation at Aley has strong potential to become a key asset for Taseko."

As export-focused miners like Peabody Energy (NYSE: BTU) have noted, the outlook for sustained economic growth in places like China, India, and key emerging markets is expected to yield about a 30% increase in global steel consumption over the next five years (through 2015). If a demand trend that strong can yield palpable bullish sentiment for molybdenum producers like Thompson Creek Metals (NYSE: TC), consider its potential impact on a market supplied by only three principal mines worldwide.

Foolish showdown: niobium vs. molybdenum
When I compare the niobium market to the better-known molybdenum market, I find that global reserves to 2009 production volume yields a similar landscape for supply between the two elements. Molybdenum reserves provide about 43 years of worldwide production at 2009 levels, while niobium reserves equate to nearly 47 years.

However, whereas molybdenum is produced in vast quantities as a byproduct of mines that primarily target copper, niobium is mined exclusively by targeted operations. This is important, because if world copper demand grows faster than steel demand over the long term, as I believe it will, then byproduct molybdenum volumes from major copper producers like Freeport-McMoRan Copper & Gold (NYSE: FCX) and Southern Copper (NYSE: SCCO) would increase as a consequence of copper demand. Over in niobium's corner, Taseko's emerging discovery at Aley appears to be the only active prospect out there for greenfield niobium production.

On the demand side, the most salient difference that I have spotted between niobium and molybdenum relates to geography. China, the world's leading steelmaker by a huge margin, happens also to be the world's leading producer of molybdenum. China's 77,000 tons of 2009 molybdenum production accounted for 38.5% of the world's total. By contrast, China must import its niobium consumption, which in my view renders niobium a potential focal point of competing interest from eager importers.

Situated a good deal closer to China than any of the three existing mines, Taseko's Aley project in particular may draw considerable interest from Beijing. We have already witnessed China's unrivaled commitment to securing future supplies for all manner of strategic resources, and even seen a Chinese state-owned enterprise ink a long-term supply agreement with Coeur d'Alene Mines (NYSE: CDE) for Alaskan production of another strategic resource: gold. Particularly if Taseko's adapted mine plan for the Prosperity copper and gold project manages to gain federal approval on a second attempt, watch for Taseko to pursue strategic options with Chinese entities in order to fast-track Aley's development.

Taseko's strategic grand slam
If you're having trouble discerning whether molybdenum or niobium presents the greater investment opportunity, then get ready to eat your cake, too. Taseko already produces significant quantities of molybdenum at its flagship 75%-owned Gibraltar mine, which yielded 940,000 pounds of the stuff during 2010. The prospect of adding niobium to the mix with the development of Aley can only sweeten a resource investor's many-sided rationale for owning a slice of Taseko Mines. Taseko's shares surged by more than 15% Tuesday following the company's announcement of the niobium discovery, which I consider a rather muted initial adjustment for a find of this magnitude.