MDN developing two of the world’s most critical metals: niobium and tantalum
On June 18, MDN-Mines (‘MDN’, TSX: MDN) announced that it will soon launch a niobium and tantalum exploration program at its 100% owned Samaqua property, in the Saguenay-Lac-Saint-Jean area of Quebec – close to Niobec’s Crevier project. The initial geophysical survey and drilling program (1,500 meters) aims to confirm the presence of niobium and tantalum mineralization. The evidence certainly suggests it. The property has shown a magnetic geophysical signature similar to that associated with Iamgold’s Niobec’s niobium rich carbonatite deposit.
Niobium (Nb) is mainly used in steel alloys to create high strength low alloy steels (called “High Strength Low Alloy Steels”), stainless steel and heat resistant steels. Niobium’s properties have generated considerable demand from advanced industrial sectors because it helps increase steel’s resistance to high temperatures, corrosion while raising superconductivity. Niobium has, therefore, become essential in the automotive industry, heavy engineering and infrastructure (i.e. bridge construction and earthquake resistant buildings), the petrochemical industry, power plants and oil & gas pipelines. A smaller percentage of high grade niobium is used exclusively to make superalloys used for the manufacture of aircraft engines.
The highest niobium grades (over 99% purity) are used in optical and electronic devices. However, niobium is going to be growing in demand, because it allows for weight reduction, which in automotive and transportation ‘language’, translates to higher energy efficiency. There are only three major niobium producers worldwide. CBMM in Brazil owns the world’s largest niobium deposit and its Araxa mines supplies some 83% of niobium consumed around the world. Anglo American (UK) also extracts niobium in Brazil but no more than 3% of the world’s total, while IAMGOLD in Canada, thanks to its Niobec mine, is the second largest producer of niobium in the world, accounting for 9% of global supply. There is a potentially rich source of niobium in Tanzania as well. Clearly, Brazil enjoys an overly dominant – one might say hegemonic – position over niobium. Given that the European Union and the United States consider niobium to be a critical metal, they are both interested in reducing reliance on Brazil and identifying new sources closer to home. The limited supply and number of plays – and the long supply routes – simply adds too much pressure on prices while CBMM is the only niobium producer that is able to deliver all the varieties, including the highest grades. Therefore, MDN’s new niobium venture will be welcomed by the market.
The market for tantalum is equally critical but more complex. MDN and Iamgold have already been working on a tantalum resource at the Crevier project (MDN owns 72.5% of it). Tantalum is crucial in the manufacture of electronic capacitors used in mobile phones, digital tablets, green technology (wind turbines, solar panels, batteries for electric vehicles). Less than 1,000 tons of tantalum is produced each year – worldwide. Tantalum, like so many other critical metals has largely been produced in China. In order to reduce reliance on Chinese tantalum, western countries have developed tantalum resources in Africa. The Democratic Republic of Congo has been one of the leading global tantalum producers; however, tantalum extraction in Africa involves coltan, a so called ‘conflict mineral, which has gained more fame for its geo-political risk rather than its industrial applications. Western companies must now prove that the tantalum meets certain standards of extraction, particularly human rights standards. Any company that uses potential conflict minerals to must disclose its supply chain in order to reduce the amount of coltan mines (and tungsten) operated by rebel militias in the Congo. Meanwhile, in 2013, the Geological Society of South Africa claimed that tantalum would be ever more difficult to find. As in the case of niobium, he European Union and the US Department of Defense have classified tantalum at the top of their list of critical metals. By developing a tantalum resource in Canada, in the mining friendly district of Quebec, MDN Mines will control a very high demand mineral, whose demand is increasing and whose global competition has been hampered by geopolitical risk.