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CAPE TOWN, South Africa — Markets for tantalum metals used primarily in electronics could face short supplies by as early as 2014 in part because of reduced Australian primary production and impending restrictions from the US Dodd-Frank Wall Street reform law aimed at curbing trade of illegal and artisanal produced minerals from the Democratic Republic of Congo that are the source of the metal.
“Consequently the establishment of new tantalum sources outside the DRC we believe is imperative,” Lara Smith, managing director of Johannesburg-based Core Consultants told the Investing in Africa Mining Indaba conference here this week.
Smith said the 2008-2009 recession had caused a reduction in demand for electronics which had a knock-on effect on tantalum supplies but that studies done by her firm had concluded that if the market moves beyond a a conservative steady growth of 4% in the coming years a supply shortage could develop within three years. Consequently we believe that prices should ultimately move to reflect this circumstance.
Smith noted that tantalum reserves are dispersed around the globe with only 10% of proven reserved actually found in Africa, and only 2% located in Central Africa. “That being said, it has been estimated that since 2009 over 50% of the world tantalum supply originated from Africa and a significant portion of that is said to come from artisanal mining in the DRC,” she said.
Smith added that is probably more sensible to talk about the most likely resource base, recognizing that artisanal mine and illegal miners typically do not prove up their reserve base. “If you consider the most likely resource base then Africa would account for about 16% of global resources and Central Africa 9%,” she said.
New technologies leading to miniaturization of electric devices – which have become smaller, lighter and with more processing power – have resulted in increased usage of tantalum, Smith said, noting that in particular, tantalum-based capacitors are on the rise in automotive electronics, mobile phones, personal computers and wireless devices. Capacitors now account for 60% of tantalum consumption, compared to only 51% in 2004, she noted.
While tantalum consumption has increased by around 3.5 million tonnes since 2004, growth in tantalum demand has been relatively lackluster over the past 15 years or so when compared to other metals used in electronic sectors. But Smith said here analysis found that demand from the automotive sector could lead to three-fold growth in tantalum consumption from 2007.
On the supply side, production has traditionally been supplemented by secondary sources, including the US Defense Logistics Agency’s (DLA) stockpile sales, recycling, long-term contracts and sourcing from slags resulting from production of other metals. These secondary sources accounted for about 45% of supply in 2007, Smith noted.
But she noted that since 2007 there have been no DLA sales of tantalum. Additionally, recycling is becoming more difficult because of high costs and the miniaturization of electronic parts, which use less tantalum metal . Retrieval of tantalum from tin slag is also declining, she said, noting that another speaker at the conference had shown fore forecasts of tin supply projecting 0.8% of increased supply in 2012 and 0.2% for the next five years.
“Moreover tantalum is traditionally sold under long-term contracts as opposed to the spot market,” Smith said, noting that end-user companies have always engaged in preemptive buying. During the tech boom tantalum inventories were stored up by companies based on their projection of their demand for their products and when the tech bubble burst those stockpiles were prolonged further.
Similarly. in 2008 the economic recession and ensuing slowdown in consumer demand insured that tantalum consumers were long on supply, Smith said. “We conjecture that the reason the prices are not yet perspective of a deficit market is due to these stockpiles, which we estimate will be depleted over the next 12 months or so as consumer demand improves,” Smith said.
In terms of primary sources, in December 2008 Australia’s Talison Minerals Pty. Ltd., which since been renamed Global Advanced Metals, placed its two Australian mines on care and maintenance. The mines, Greenbushes and Wodgina, together annually accounted for 2.4 million pounds tantalum pentoxide or 38% of global tantalum supply.
Operations of the Wodgina mine restarted in January 2011 but the company indicated that they would only produce around 700,000 pounds per year, Smith said. “In reality we understand that they are producing closer to half a million pounds,” she added.
In addition to the global financial crisis, the other reason cited for halting production in Australia, was the influx of low-priced coltan minerals, from which tantalum metal is extract, coming from the DRC’s illegal and artisanal miners, Smith said.
The Dodd-Frank law enacted in July 2010 requires that companies who consume minerals from conflict zones, in particular tantalum, tin, tungsten and gold from the DRC, have to now show provenance of these minerals and demonstrate that they are not conflict or “blood” minerals.
“This could facilitate the issue of lower priced imports of coltan,” Smith said but noted that the implementation of the act has since been delayed a number of times, most recently in December.
Under the act companies are expected to be granted a grace period of 12 months to either demonstrate provenance or find alternative supply sources, Smith said. “This means that full implementation of this legislation will most likely not come into effect before the end of 2013,” she said. “Subsequently cheaper coltan from the DRC and Rwanda may continue to fill the supply gap and stabilize prices.”
Consideration of current and future tantalum project plans were used by Core Consultants in forecasting the outlook for supply demand and future price direction of this strategic metal, she said.
BY PHILIP BURGERT
Source: http://www.resourceinvestor.com/2012/02/10/dodd-frank-australian-cuts-threaten-tantalum?ref=hp
Rare earth crisis: Innovate, or be crushed by China
Published January 3, 2012 | By Swiss Metal Assets
">Laptops, cars, smartphones, TVs, MRI scanners, LCD displays, light bulbs, optical networks, jet engines, cameras, headphones, nuclear reactors. It might seem like a random selection of high-tech gizmos, but every single object on that list has one very important thing in common: Their manufacture requires one or more rare earth metals.
Rare earths — a block of seventeen elements in the middle of the Periodic Table — aren’t actually all that rare, but they tend to be very hard to obtain commercially. Generally, rare earth elements are only found in minute quantities in mineral deposits of clay, sand, and rock (earths!), which must then be processed to extract the rare metals — an expensive process, and also costly for the environment as billions of tons of ore must be mined and refined to yield just a few tons of usable rare earths.
Many rare earths are also geochemically rare — they can only be mined in a handful of countries. This is simply down to Mother Nature being a tempestuous so-and-so: Some countries have deposits of rare earths, and some don’t. This results in massively skewed production (China famously produces 97% of the world’s rare earth metals), and, as you can imagine, a lot of national security and geopolitical troubles, too.
It doesn’t stop with rare earths, either: Many other important elements, such as platinum, are only available from one or two mines in the entire world. If South Africa sustained a huge earthquake — or was on the receiving end of a thermonuclear bomb, perhaps — the world’s supply of platinum would literally dry up over night. The continued existence of technologies that rely on platinum, like car exhaust catalytic converters and fuel cells, would be unlikely.
If geochemistry and politics weren’t enough, though, we even have to factor in ethical concerns: Just like blood/conflict diamonds — diamonds that originate from war-torn African nations, where forced labor is used and the proceeds go towards buying more weapons for the warlord — some rare metals could be considered “blood metals.” Tantalum, an element that’s used to make the capacitors found in almost every modern computer, is extracted from coltan — and the world’s second largest producer of coltan is the Democratic Republic of the Congo, the home of the bloodiest wars since World War II. Not only do the proceeds from coltan exports get spent on weapons, but the main focus of the wars were the stretches of land rich in diamonds and coltan.
Also along the same humanist vein, it’s important to note that extracting these rare elements is usually a very expensive and disruptive activity. Indium, probably the single most important element for the manufacture of LCDs and touchscreens, is recovered in minute quantities as a byproduct of zinc extraction. You can’t just set up an indium plant; you have to produce zinc in huge quantities, find buyers and arrange transport for that zinc, and then go to town on producing indium. In short, extracting rare elements is generally a very intensive task that is likely to disrupt or destroy existing settlements and businesses.
The rare earth apocalypse
The doomsday event that everyone is praying will never come to pass, but which every Western nation is currently planning for, is the eventual cut-off of Chinese rare earth exports. Last year, 97% of the world’s rare earth metals were produced in China — but over the last few years, the Chinese government has been shutting down mines, ostensibly to save what resources it has, and also reducing the amount of rare earth that can be exported. Last year, China produced some 130,000 tons of rare earths, but export restrictions meant that only 35,000 tons were sent to other countries. As a result, demand outside China now outstrips supply by some 40,000 tons per year, and — as expected — many countries are now stockpiling the reserves that they have.
Almost every Western country is now digging around in their backyard for rare earth-rich mud and sand, but it’ll probably be too little too late — and anyway, due to geochemistry, there’s no guarantee that explorers and assayers will find what they’re looking for. The price of rare earths are already going up, and so are the non-Chinese-made gadgets and gizmos that use them. Exacerbating the issue yet further, as technology grows more advanced, our reliance on the strange and magical properties of rare earths increases — and China, with the world’s largest workforce and a fire hose of rare earths, is perfectly poised to become the only real producer of solar power photovoltaic cells, computer chips, and more.
In short, China has the world by the short hairs, and when combined with a hotting-up cyber front, it’s not hard to see how this situation might devolve into World War III. The alternate, ecological point of view, is that we’re simply living beyond the planet’s means. Either way, strategic and logistic planning to make the most of scarce metals and minerals is now one of the most important tasks that face governments and corporations. Even if large rare earth deposits are found soon, or we start recycling our gadgets in a big way, the only real solution is to somehow lessen our reliance on a finite resource. Just like oil and energy, this will probably require drastic technological leaps. Instead of reducing the amount of tantalum used in capacitors, or indium in LCD displays, we will probably have to discover completely different ways of storing energy or displaying images. My money’s on graphene.
By Sebastian Anthony
Source: http://www.extremetech.com/extreme/111029-rare-earth-crisis-innovate-or-be-crushed-by-china
Posted in Interesting Articles | Tagged China, Coltan, indium, platinum, rare earth elements, Rare Earth Exports, rare earth metals, rare earths, Rare Elements, rare metals, tantalum
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