market sentiment in specs and abu d finance, page-2

Cabot and H.C Starck are looking for stability of supply and cheapness of price. They may be the biggest beasts in the tantalum jungle at the moment but would not continue to be so if they had to pay Talisons prices, prices that are liable to go up even more as it becomes harder to mine the tantalum from their pits.

The fact there is a downturn plays against Talison as well as both these companies may have fairly healthy stockpiles which will last longer now. Other companies probably have much smaller stockpiles which will of course start depleting soon and push the price up and other tantalum suppliers are also in trouble (Tanco, Noventa) which should help push the price up eventually but probably too late for Talison.

The fact is both Cabot and H.C Starck need a cheap supplier in the medium to long term to beat off Chinese competition that can always get cheaper supplies than Talison's from the Congo. Gippsland can do this in fact i would say it was a two horse race between Commerce Resources and Gippsland with Gip trying to hurdle the last fence and Commerce still at the starting gate. Talison's horse is trying to limp round with a broken leg.

Of course some of the imponderables are how long will Cabot's and H.C Starck stockpiles last and which way will Cabot jump (guess most of think we know how H.C Starck are going to jump).

Makes sense for both H.C Stark and Cabot to put resources into Gippsland rather than pay twice to three times the price for tantalum from Talison especially in H.C Starck's case where they have the German Government behind them. Would like most people expect H.C Starck to turn out to be the mysterious partner behind the Syncon project, that is thinking of taking a stake in Tantalum International PTY Ltd (part of Gippsland).

Any deal has to be done fairly soon as the Gip horse is running low on hay and oats.

Robert