Thursday, December 10, 2009

Rare Metals: Tantalum market uncertainty as serious shortages loom TNR.v, CZX.v, CCE.v, WLC.v, RM.v, LI.v, CLQ.v, FMC, SQM, ROC, HEV, AONE, VLNC, SNE,

With this company we will have to study all Periodic Table of the Elements all over again. Back to school. We need to have our homework right in order to stay in this game, like Jay Taylor does when he looks at the companies. Today we will look again at Tantalum market. First, lets remind ourselves about Tantalum as an element and its use.

"About Tantalum
Tantalum is an element found in many ways in our everyday lives, improving technology and material performance. Its many applications include uses in electronics, medicine, engineering and energy generation. Tantalum was discovered by Anders Gustaf Ekenberg, a Swedish chemist, in 1802 in minerals obtained from Ytterby, Sweden. Many scientists believed that he had only discovered an allotrope of niobium, an element that is chemically similar to tantalum. The issue was finally settled in 1866 when, Jean Charles Galissard de Marignac, a Swiss chemist, proved that tantalum and niobium were two distinct elements. The first relatively pure samples of tantalum were first produced in 1907. Today, tantalum is primarily obtained from the minerals columbite ((Fe, Mn, Mg)(Nb, Ta)2O6), tantalite ((Fe, Mn)(Ta, Nb)2O6) and euxenite ((Y, Ca, Er, La, Ce, U, Th)(Nb, Ta, Ti)2O6).Tantalum has unique attributes that make it suitable for several specific purposes. It has an exceedingly high melting point (about 3,000° C), is highly corrosion-resistant, alloys well with other metals, is superconductive for electricity and, most importantly, has an excellent capacity to store and release an electrical charge. Uses for TantalumAbout half of the tantalum consumed each year is used in the electronics industry, mainly as powder and wire for capacitors, owing to tantalum's particular ability to store and release electrical energy. This allows components to be exceptionally small and they are therefore favoured in space-sensitive high-end applications in telecommunications, data storage and implantable medical devices. Tantalum is also used for electronic sound filters and as a barrier against copper diffusion in semi-conductors. Tantalum carbide's hardness makes it ideal for cutting tools.
Tantalum metal and tantalum pentoxide (Ta2O5), one of tantalum's compounds, are mainly used in electronics to make a part called a capacitor. It allows the capacitors to be very small and is ideal for high technology uses including digital cameras and video cameras, mobile phones, laptop computers, LCD/Plasma televisions, and data storage devices. While the bulk of demand for tantalum capacitors comes from the handheld and gaming markets, as designers cram greater functionality into these ever-shrinking devices, there has also been quite a bit of activity in high reliability markets including military, automotive and medical that require higher performance components. Tantalum capacitors are also in car electronics such as anti-lock braking systems (ABS), navigation systems, wheel traction control, airbag inflation, engine management and fuel economy. Medical uses include heart pacemakers, implanted auto-defibrillators and hearing aids.Tantalum is a strong, ductile metal that is nearly immune to chemical attack at room temperatures. It can be drawn into a fine wire that is used to evaporate metals, such as aluminum. It has a high melting point and is frequently used as a substitute for platinum, which is more expensive. Tantalum is used to make components for chemical plants, nuclear power plants, airplanes and missiles. Tantalum does not react with bodily fluids and is used to make surgical equipment. Tantalum also does not irritate the body and is used to make surgical sutures as well as implants, such as artificial joints and cranial plates. Tantalum is alloyed with steel to increase steel's ductility, strength and melting point.It is also used to make a glass with a high index of refraction that is used in camera lenses. A composite consisting of tantalum carbide (TaC) and graphite is one of the hardest materials known and is used on the cutting edges of high-speed machine tools.
World's Consumption of Tantalum
The two main buyers of tantalum raw materials are the processors HC Starck GmbH and Cabot Corp. Other processors include those located in China (Ningxia Non-ferrous Metals Import and Export Corp., Jiujiang Tanbre Smelter, Jiujiang Jinxin Non-ferrous Metals Co Ltd.), Estonia (AS Silmet), Japan (Mitsui Mining & Smelting Co Ltd.), Kazakhstan (NAC Kazatomprom) and Russia (Solikamsk Magnesium Works).
Main Sources of Tantalum Raw Materials
Tantalum ores are found primarily in Australia, Canada, Brazil, and central Africa, with some additional quantities originating in southeast Asia. The average yearly growth rate of about 8% to 12% in tantalum demand since about 1995 has caused a significant increase in exploration for this element. Tantalum minerals of the greatest economic importance are tantalite, microlite, and wodginite; however, it is common practice to name any tantalum-containing mineral concentrate as 'tantalite' primarily because it will be processed for the tantalum values and is sold on that basis. Tantalum mineral concentrates may contain from two to more than five different tantalum-bearing minerals from the same mining area. The sale of tantalum mineral concentrates is based on a certified analysis for the tantalum oxide they contain, with a range from 10% or 15% to over 60% depending on the mine source. The single largest source of tantalum mineral concentrates is the production by Talison Minerals Pty Ltd. from its mine in Western Australia. They produce between 25% and 35% of the world's supply, with production reported at approximately 1.4 million pounds Ta2O5. Additional operating mines are the Tanco Mine (Cabot) in Manitoba, Canada, the Kenticha Mine (Ethiopia Minerals Development Authority) in Ethiopia, the Yichun Mine in China, and the Pitinga Mine (Paranapanema) and Mibra Mine (Metallurg) in Brazil. Additional quantities are available from Brazil through the processing of small alluvial deposits by prospectors and in numerous countries in Africa such as Rwanda, Namibia, Uganda, DRC, Gabon, Nigeria, South Africa, and Burundi. Due to political instability and associated risk, mining investment in Africa has been significantly curtailed. The central African countries of Democratic Republic of the Congo (DRC-Kinshasa) and Rwanda and their neighbors in the past had been the source of significant tonnages. Civil war, plundering of national parks and exporting of minerals, diamonds and other natural resources to provide funding of militias has caused the organizations such as the Tantalum-Niobium International Study Center to call on its members to take care to obtain their raw materials from lawful sources. Members are strongly encouraged to refrain from purchasing materials from regions where either human welfare or wildlife are threatened.
Price of Tantalum
Unlike other metals, tantalum does not trade as a commodity in recognized metal markets. Consequently, tantalum trades in negotiated markets. This leaves considerable power with suppliers particularly during an up market.
Worldwide Companies Using Tantalum
Tantalum capacitors are used by many large international corporations:
Wireless Users:
Sony Corporation
Motorola Inc.
Panasonic Infrastructure Users:
Cisco Systems Inc.
Nortel Networks Corporation Computer Hardware Users:
Intel Corporation
Hewlett-Packard Company
Dell Computer Corporation
Compaq Computer Corporation
Seagate Technology Inc."
We will add, that with Electrification and Electric Cars in their mass market phase Demand for Tantalum will increase with all high tech gadgets implemenmted in EVs and smart grid technology with Solar and wind Power energy control systems applications.

The western world could be facing a severe shortage of tantalum over the next few years according to a recent study from Roskill Information Services in the UK.

Author: Lawrence Williams Posted: Wednesday , 23 Sep 2009

According to a new special study report from UK metals research consultancy, Roskill Information Services, there are fears in the tantalum market that serious shortages are looming. Weak recent demand has kept prices low. As a consequence primary output has been cut dramatically and processors are increasingly relying on stock drawdowns to make up the shortfall. If there is even a modest recovery in demand for tantalum in the near future, the market faces a difficult period.
Tantalum's major usage at present is in the production of electronic components, mainly capacitors and some high-power resistors. Because of the size and weight advantages, tantalum capacitors are attractive for mobile telephones, personal computers, and automotive electronics. Tantalum is also used to produce a variety of alloys that have high melting points, are strong and have good ductility. Alloyed with other metals, it is also used in making carbide tools for metalworking equipment and in the production of superalloys for jet engine components, chemical process equipment, nuclear reactors, and for the military. Due to the fact that it resists attack by body fluids and is nonirritating, tantalum is widely used in making surgical instruments and implants. For example, porous tantalum coatings are used in the construction of orthopaedic implants due to the metal's ability to form a direct bond to hard tissue.
A key issue in the tantalum market, says Roskill, has been the continuing supply of low-cost columbite-tantalite (coltan) mined in Central Africa, in the DRC and Rwanda, mostly illegally, and sold to fund rebel militias. The major processors will not knowingly buy such material and almost all of it goes to China. The availability of large and growing quantities of cheap tantalum, at a time when global demand for consumer electronics is down and processors are holding substantial raw material stocks, has, however, placed the conventional tantalum industry under great pressure. Unable to win the large increase in prices it needed to be economic, the world's largest primary producer, Talison in Australia, suspended mining operations in late 2008. It was soon followed by two others. Within the space of a few months, close to 40% of global primary tantalum capacity was taken out of the market. There are no guarantees as to when, or even if, it will be brought back into production.
However, Roskill reckons that the market remains well-supplied in the immediate short term. A key characteristic of the tantalum industry in recent years has been that supply has nearly always been greater than demand. As a result, large inventories have been built up at most levels of the supply chain. Those stocks are not inexhaustible. In addition, the US strategic stockpile has gone for good and there are questions as how long tin slags can continue to constitute an important tantalum feedstock.
As has been the case in the past, processors are increasingly turning to scrap and other forms of secondary tantalum. Their receipts of secondary material grew by 70% in 2007 and by a further 25% in 2008. The growing use of scrap is evident in trade data.
The tantalum processing industry is attempting to develop systems to keep coltan out of the market by providing ways to physically indentify it before it is processed and becomes untraceable. Some processors are more committed to this than others, and the system is not yet fully in place, but the industry in general is facing mounting pressure from capacitor manufacturers and OEMs to ensure that coltan is not used. It is quite likely that the supply of coltan to the market will fall sharply over the next year or two.
What will compensate for the likely supply shortfall? Production is being expanded in several countries but probably not by enough to replace the coltan. Numerous new tantalum-niobium projects are in the pipeline and several would be very large producers. The big question is when they will come on-stream. Of the three mega-projects, one was originally planned to come into production in 2006, while another has been held up for over two years by red tape. The third may come into production in 2011.
The global economic downturn had a very marked effect on the tantalum supply/demand balance. Demand in 2009 will very probably prove to be 40% down on 2008, but Roskill considers it will fully recover by 2012, although much will obviously depend on the continuing strength of any global economic revival. Whether or not sufficient supply will be in place to meet that demand recovery is another issue entirely.
As Roskill summarises, a large part of the primary supply chain is not producing in 2009 and there are no clear indications as to when, or if, it will come back to the market. Inventories are running down, scrap is in shorter supply because of a fall in capacitor manufacture and it is quite possible that legislation under consideration in the USA could severely restrict or even halt the supply of tantalum from Central Africa.
It is almost certain therefore, Roskill reckons, that a tantalum supply squeeze is approaching. If demand picks up faster than expected, a spike in spot prices seems inevitable. Stability will probably not return to the market until the new projects come on-stream, or consumers accept contract prices at a level sufficient for Australia's Talison to reopen its mining operation.
For full details of the Roskill report go to"
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