commerce joke, page-11

I think two things have to happen Bergler for Abu D to happen.

The first being the Euro zone has to settle down so that credit can flow to lower priority investments/projects such as Abu D.

The second being Ta demand will have to pick up substantially worldwide so that there is a pickup back past the 5M lb/Yr level which will justify a big project such as Abu D coming online.This and a strong drawdown of current stockpiles.

The Euro zone is still very unstable with Germany bearing the brunt of having to bail out Greece.

To me hoping that the DRC blood tantalum will be strangled enough via new government policy to enable such a large project as Abu D to start-up is a blindly singular hope.Yes, its a good moralistic aim and will contribute to a more balanced Ta price in the long run but its not going to be such a large factor as will be the growth in Ta demand due to a healthy growing world economy.

And before anyone says but what about Chindia.I too once thought that Chindia would be Ta's salvation but one must appreciate that having such a small amount of Ta used in each product produced means that ALL products must be in demand at high levels for Ta demand to be strong.This just doesnt happen through Chindia growth alone.It must be good world growth.This has definitely been a lesson for me in terms of the dynamics of demand for a unique/rare metal used in small amounts but in large numbers of products.

In the end,as Bagman says,one simply has to be ultra patient for the various factors to swing GIP's way.I dont know that its a matter of HCS letting GIP down.They were staring down the barrel of a corporate gun that was saying cut your costs substantially by shifting your processing to a much cheaper labour cost region,and by reducing Ta inventories via drawdown of their stockpile.HCS have said many times that they still want to be involved in the Ta industry but the level at which they are involved depends entirely on WORLD demand for their product.

The real sign that Ta demand might be picking up and stockpiles have been drawn down substantially will be when the Tantalite price approaches pre GFC levels.Otherwise I think one can safely say that other forms of Ta supply are covering current demand.

d.