miningweekly: tantalum outlook 2015

Miningweekly

By: Natalie Greve
3rd July 2013


JOHANNESBURG (miningweekly.com) – Tungsten, tantalum and rare-earth elements (REEs) have started to emerge as “critical” global metals and are expected to become highly scarce from 2015, Core Consultants MD Lara Smith said on Wednesday.

“While the European Union and the US Department of Defence somewhat disagree on the full list of those metals that are deemed critical, they do agree that these three are [at the top of the list],” she said at the Geological Society of South Africa’s 2013 GeoForum conference, in Johannesburg.

Critical metals are defined as those metals with a critical risk to supply, on which humans are highly dependent for survival, and which are necessary for the continuation of a modern way of life.

Smith noted that these minerals were conventionally dominated by a single supplier or country, commonly experienced underinvestment in the development of new projects, and presented limited potential for substitution.

“In addition, critical metals are finding increased application in modern, portable devices, as well as in military or defence applications and are, therefore, of strategic importance to several countries,” she commented.

.... TANTALUM:

While also considered a critical metal, Smith observed that the tantalum market differed from the tungsten market in that its reserves were more widely dispersed, despite over 50% of the world’s tantalum supply having originated from Africa.

“The risk to the tantalum market is that 16% of supply is estimated to originate from artisanal mining activities, while a further 23% originates from a conflict area,” she noted.

As with a number of minor metals, new technologies, leading to the miniaturisation of electronic devices, had resulted in increased use of tantalum.

Smith commented that tantalum-based capacitors, in particular, were on the rise and were increasingly used in automotive electronics, mobile phones, personal computers and wireless devices.

“Capacitators now account for 60% of tantalum consumption, compared with 51% in 2004. While growth in tantalum demand has been relatively lacklustre over the past 15 years or so, compared to other metals in the electronics sector, this application could lead to three-fold growth from 2007 levels,” Smith said.

In terms of tantalum’s tradability, she noted that, as it was not traded openly, its market has always been subject to large swings in over- and undersupply.

Most tantalum was sold under long-term contracts rather than through the spot market, which had traditionally resulted in pre-emptive buying. As a result, prices did not always immediately reflect the supply/demand deficit.

Tantalum prices had recently demonstrated volatility, increasing by over 300% to around $550/kg in 2011.

“As a result, gauging a long-term stable price is challenging, but if we assume a conservative steady growth rate of consumer electronics in the coming years of around 4%, then the market will be perfectly balanced. Growth above 4% will result in a supply shortage by next year and we, therefore, assert that prices have now bottomed out and should start reflecting our expectation of a market deficit,” said Smith....

http://www.miningweekly.com/article/tungsten-tantalum-rare-earths-emerging-as-critical-global-metals-2013-07-03