SÃO PAULO (Metal-Pages) 13-Aug-09. Tantalum supplies will become critical in 2011, but processors and original equipment manufacturers should take immediate action in view of a looming problem stemming from potential increases of supplies of conflict tantalum, consultants Gerson Lehrman warn.
In its report entitled 'The time to tackle the tantalum supply chain is now' Gerson Lehrman says though demand for both of the metals is currently depressed, due to the global financial crisis, with economies showing signs of recovery it expects demand to bounce back, and for ore prices to begin to rise.
Tantalum is a critical raw metal used to make electronics, aerospace and power generation applications. Makers of computer chips, portable devices and turbine blades all rely on the material.
With resources in Australia, Brazil and Canada, tantalum is also found in the Democratic Republic of Congo, which is attempting to recover from decades of kleptocratic dictatorship and a devastating 1998-2003 war.
"Rising prices will inevitably stimulate increased efforts in the DRC to produce these materials, and to some degree are likely to lead to greater efforts by militias to control and exploit the increasing revenues from these minerals," the report says.
Annual lost output from shutdowns at the Wodgina, Marropino and Tanco mines runs to 750 tonnes per year of tantalum oxide - around 50% of the 2008 supply from discrete mine sources of tantalum.
Though none of these three mines are permanently closed, reaching normal output is not a simple task and and could take around a year, compromising the formal tantalum mining sector's ability to respond rapidly to changes in demand, the report said.
With international efforts to clampdown on the flow of so called 'conflict tantalum' being stepped up the report outlines a five-point action plan for processors and ore manufacturers to deal with ahead of expected changes of demand.
The plan includes supply chain auditing, engaging with the tantalum industry to understand how the sector works, processors buying from an approved list of countries, assaying for material quality and safety of materials and demanding certificates of origin.
"While the outlook is of course heavily dependent on demand recovery, 2011 is likely to be the year in which ore prices begin to respond to declining processor inventories and recovering end-market tantalum demand," the report says.
David Henderson, president of Rittenhouse International said tantalum supplies will be adequate to meet demand up until the end of 2009. but there could be a shortage thereafter, in a presentation to April's MMTA's Minor Metals conference in Istanbul
"Despite the closure of Talison's Wodgina mine last December there is currently enough tantalum available to meet demand, which has fallen off the edge of the cliff, particularly in the capacitor sector which has seen a 40% decline" Henderson said, but he went on to warn "There is too much focus on the lack of demand, if demand recovers to only 80% of the level it was last year then there is a serious prospect of a shortage."
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