EDITOR: | July 14th, 2015 | 15 Comments

Tantalum – Conflicts of Interest

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Like so many other things out of the US, a good idea often ends up coming out less than well-thought-out in the final wash. The last 20 years saw a rising tide of bad press for ‘conflict minerals” with the film Blood Diamond topping off the trend and finally stirring some official action. As is so common, the focus ended up being a highly publicized region and a few prominently mentioned minerals and as time (and conflicts) “moved on” the original purpose became obscured and various conflicts and minerals flew under the radar.

These days the focus on conflict minerals is concentrated on Tin, Tantalum, Gold, Diamonds and Tungsten. Indeed these were encompassed in the behemoth Dodds-Frank law which was supposed to fix the ailments of the US financial system in the wake of the 2008 debacle and ended up in true Washington fashion being a catch-all for pet-projects and waif-and-stray measures that couldn’t find a legislative life of their own. The 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act requires manufacturers to audit their supply chains and report conflict minerals usage.

The perversity of this, as I have pointed out before, is that in Burma around 10% of the world’s supply of Antimony is produced artisanally by rebel tribes then smuggled into China where it is paid for with arms, or money to buy arms to fight the Burmese government. There is no more classic example of a conflict mineral  – yet neither Antimony, nor the region, are within the ambit of current conflict mineral restrictions. Maybe if a film with Johnny Depp came out on the subject it might get some traction.

Exotic Supply Sources

We shall focus here though on Tantalum, by far the least known “household name” in the conflict minerals space. As can be seen by the pie chart below showing sources of current production there is a heavy preponderance towards Africa as a supply source with a very high proportion of production emanating from those hot-spots of the last 20 years, the DRC, Burundi and Rwanda. Mozambique is no longer unrespectable but for a long time was riven by civil war and Nigeria has been an on-again, off-again trouble spot currently tormented by the Boko Haram movement. This puts the vast majority of tantalum production in the category of conflict minerals.

tantalum_pie

It might be said that there is a swathe of quasi-artisanal sources in Africa, and secondary by-product sources making up much of the rest of global supply. Some of this by-product flow comes from the large-scale producers of niobium, CBMM (in Brazil) and Niobec (in Canada), with the ore at these mines also yielding a small percentage of tantalum. Tantalum is also produced in Thailand and Malaysia as a by-product of the tin mining there. The slag from the tin smelters then contains economically useful amounts of tantalum, which is leached from the slag.

It is worth mentioning that the “major” producer of Tantalum in North America at the moment is the Tanco Mine, owned by Tantalum Mining Corp. of Canada (Tanco), a subsidiary of Cabot Corp (NYSE:CBT). This is an underground cesium and tantalum mine on the Bernic Lake, Manitoba, Canada.

As far as up and coming projects are concerned, those on our radar include MDN’s Crevier project in Quebec, the Woodgina project and Alkane’s Dubbo project in Australia and Tantalex’s Mayoko project in the far north of Brazzaville Congo. The latter has only recently come to our attention. A key point to note here is that Brazzaville Congo is the old French Congo and NOT to be confused with the DRC (which is the old Belgian Congo).

A Rare Element Indeed

On the more practical side Tantalum is a chemical element with the symbol Ta and atomic number 73. It is a rare, hard, blue-gray, lustrous transition metal that is highly corrosion-resistant. Tantalum is estimated to make up about 1 to 2 ppm of the Earth’s crust by weight. Tantalum, always together with the chemically similar niobium, occurs in the minerals tantalite, columbite and coltan (a mix of columbite and tantalite).

Applications – A Very High-Tech Metal

Tantalum is part of the refractory metals group, which are widely used as minor components in alloys. The chemical inertness of tantalum makes it a valuable substance for laboratory equipment and a substitute for platinum. Tantalum is also used for medical implants and bone repair. Its main use today is in tantalum capacitors in electronic equipment such as mobile phones, DVD players, video game systems and computers.

One could almost argue that it is like some of the rarer REEs and Scandium in that further applications are restricted because of supply issues, not by human ingenuity. For this reason the current squeeze on supply by the implementation of anti-conflict mineral measures just makes the metal even tougher to source.

As can be seen from the price chart, the metal has had a fairly attractive chart, compared with other metals, in recent years.

tantalite_5yrs

It is estimated that there are less than 50 years left of tantalum resources, based on extraction at current rates, demonstrating the need for increased recycling.

The intriguing thing about Tantalum is its fluctuating supply. The chart below shows supply over recent decades and it’s been a wild ride. This irregularity of supply also gives a good reason why inventors of applications may be wary of creating some new usage that cannot then be supplied.

Ta_global_production

Conclusion

Tantalum appears to be one of those technology metals where expanded supply will probably expand demand commensurately. Recent decades have seen the metal constrained by occurrences and production being skewed towards zones of conflict.

The metal has thus become enmeshed in the conflict minerals issue with a predomination of artisanal and clandestine producers over listed mainstream (respectable?) miners. There is a fine line to draw in the whole area of “exploitation minerals” which in quite a few cases includes artisanal mining where dubious middle-men are involved. If there was a crackdown on exploitation of the artisanal sector globally, then the party most likely to be negatively impacted would be the Chinese. The US can’t be too aggrieved to see Chinese manoeuvres in shady metals trading being cramped by Dodds-Frank.

So Tantalum is tantalizingly scarce both as a metal and as an investable option. While investors have a choice of number of companies with deposits, those with production are a distinctly rare commodity. Hopefully this situation will change over the next few years.


Christopher Ecclestone

Editor:

Christopher Ecclestone is a Principal and mining strategist at Hallgarten & Company in London. Prior to founding Hallgarten & Company in New York in 2003 ... <Read more about Christopher Ecclestone>


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Comments

  • Simon_Strauss

    Great to see an article about Tantalum.

    World Resources: Identified resources of tantalum, most of which are in Australia and Brazil, are considered adequate to meet projected needs. USGS 2012.

    The latest United States Geological Survey (USGS) estimates that the world has around 300 million pounds of Tantalum.

    Australian ASX listed companies have just on a 100 million pounds of contained tantalum (2011).

    Unlisted Global Advanced Metals is currently producing and Australia has one ASX listed company that will be producing soon and two listed companies with substantial resources (JORC).

    Google: “australian tantalum” for a lot of information.

    July 15, 2015 - 4:31 AM

  • D. L.Trueman

    Tantalum production at Tanco ceased a decade ago.

    July 15, 2015 - 11:27 AM

  • ben

    You may want to re-scale your “radar” a bit, I would kindly suggest: there is a certain Canadian explorer that has been sitting on the biggest tantalum deposit outside of china and is currently in the process of striking a deal…

    July 15, 2015 - 4:41 PM

  • Simon_Strauss

    Hi Ben could you expand on your post. Size of the proven resource, rock type, processing etc would be greatly appreciated. I’ve been following Tantalum for quite some time and I’m pleased to see it getting some attention.

    Random: This image https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRE9QAfZAsqAxSnI4t0yxlGIS6bto9LBkAsFQoIspgGM5SoJBAEmA is of ASX: GIP’s Abu Dabbab resource.

    July 15, 2015 - 11:34 PM

  • Jibby

    Furthermore neither Niobec nor CBMM produce Ta!

    July 16, 2015 - 9:45 AM

  • D. L.Trueman

    A large part of the cost in producing tantalum is the cost of hydrofluoric acid (HF). Historically, it takes > 10% Ta2O5 in an Nb/Ta concentrate to make it economic.

    July 16, 2015 - 11:12 AM

  • Christopher Ecclestone

    Apparently it ceased mining Ta in 2013 at Tanco… grade issues…. but the mine is still operative as a cesium mine….

    July 16, 2015 - 11:31 AM

  • Christopher Ecclestone

    Here is the USGS report (2015) saying that 31% of the US’s tantalum comes from Brazil…

    http://minerals.usgs.gov/minerals/pubs/commodity/niobium/mcs-2015-tanta.pdf

    July 16, 2015 - 11:41 AM

  • Christopher Ecclestone

    As for Abu Dabbab it looks pretty interesting and the potential volumes certainly would move the dial. Gippsland had a base-case development scenario involves the open-pit mining of two million tonnes of ore per year. After processing, it is expected to produce 2,750 tonnes of a primary concentrate grading about 10% Ta2O5 and 50% tin. This concentrate would be the feedstock for a smelting process that could result in the production of tin metal and a tantalum glass grading 20-30% Ta2O5.

    Average yearly production of 600,000 pounds of tantalum (as Ta2O5 as a glass) and 1,300 tonnes of LME-grade tin metal.

    The one fly in the ointment though is the Egypt-risk of the project. That is a tough one…

    July 16, 2015 - 11:48 AM

  • Jibby

    Brazil supply comes from the CIF’s Mibra mine (part of AMG group).

    July 16, 2015 - 1:04 PM

  • D.L. Trueman

    One of the problems with mining tantalum in apogranites like the Abu Dabbab or the Yichun (PRC) is sliming of the ultrafine mineralization. At about 35 microns gravity concentration no longer works.

    July 16, 2015 - 1:16 PM

  • D.L. Trueman

    I stand corrected. Tantalum production at Tanco stopped in 2009

    July 16, 2015 - 1:26 PM

  • AMA

    Alliance Mineral Assets is a lesser known soon-to-be producing mine listed on the Singapore stock exchange (“SGX”). This mine is expected to contribute to the world supply coming Jan 2016 as it once belonged to the top 5 producing tantalum mines in the world.

    November 22, 2015 - 5:44 AM

  • Christopher Ecclestone

    Thanks for the tip-off.. I shall check it out…

    November 22, 2015 - 2:42 PM

  • Positroll

    The above mentioned Alkane Resources could add about 100 tons / year for 70+ years to the picture. So far, though, they haven’t developed a way to separate it out, since the price for tantalum is comparatively low, esp compared to hafnium where turbine makers and aeronautic firms seem desperate to get their hands on a save + long term source … Unless an end user of tantalum tells them “here is a bunch of money, go develop a working separation circuit and I’ll buy everything you produce at price x” , they will only get in that business 5-10 years from now, once they have a working DZP and paid back most of the necessary capex loans …

    November 23, 2015 - 1:11 PM

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