From yahoo.comReutersGwalia to sell 150,000/lb of tantalum to...

From yahoo.com

Reuters
Gwalia to sell 150,000/lb of tantalum to China
Sunday May 9, 9:27 pm ET


SYDNEY, May 10 (Reuters) - Australian miner Sons of Gwalia Ltd (Australia:SGW.AX - News) said on Monday it has broken into China's growing imported commodities market with an agreement to sell 150,000 pounds of tantalum to a Chinese metals processing firm.
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Gwalia said delivery of the material in concentrate form for an undisclosed price would be in the second half of 2004 and marked its first sale into China, the wold's third largest market for tantalum.

The sale comes as demand for tantalum is rising among electronics manufacturers, according to commodities analysts.

At current long-term contract prices, of between $45 and $65 a pound, analysts estimated the value of the agreement at up to $10 million.

Tantalum is used in the electronics sector, with the mobile phone boom creating demand for tantalum capacitors. It is also widely utilised in nickel base alloys for casting into single crystal turbine blades, used in jet engines.

Annual world consumption is about four million pounds, with Gwalia supplying about 55 percent of the world market from its Greenbushes lode in Western Australia.

Mining companies globally have been expanding existing lodes and developing new ones to match demand for raw industrial commodities in China, the world's fastest growing economy.

Gwalia is one of only a handful of firms worldwide mining tantalum. Australia-based Gippsland Ltd (Australia:GIP.AX - News), which debuted on London's Alternative Investment Market (AIM)in March, is vying to be one of the world's biggest and lowest-cost producers when its Abu Dabbab project in Egypt starts output in late 2005.

Gwalia, which currently sells 2.1 million pounds of tantalum a year to buyers in North America and Europe, is seeking to broaden its customer base to the Chinese market.

"The company regards the Chinese sale as a further indication of the improving outlook for tantalum markets," Gwalia said.

Shares in Gwalia, which also mines gold, added 0.4 percent to A$2.33 in early trading in an overall weaker market. ($1=A$1.43)