Large Part of the Primary Supply Chain is not Producing in 2009

LONDON -

- Roskill Information Services

- The Economics of Tantalum (10th Edition, 2009)

- New Report From Roskill Analyses Worldwide Tantalum Supply and Demand

In late 2009, the global tantalum market bore little resemblance to that of a year earlier. In mid-2008, tantalum consumption was on a strong growth trend in its principal markets - electronics and aerospace superalloys - which make up around 75% of tantalum consumption. Adequate primary supply was in place to meet the industry’s needs, along with substantial quantities of scrap, which is mostly generated during capacitor manufacture.

Things then changed rapidly. In the second half of 2009, the tantalum market faces a period of uncertainty that will, quite possibly, remain until 2012.

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. Whether or not the supply will be in place to meet that demand is another issue entirely.

Historically, the larger part of global primary tantalum supply has come from one producer in Australia, Talison, which sold to the major processors under long-term, fixed-price contracts. In late 2008, Talison attempted to renegotiate its contract prices and to increase them significantly, to a level at which it could produce economically. Its customers, faced with declining downstream demand, large inventories that had their origins nearly ten years earlier, and the ready availability of low-cost material from Central Africa, did not renew their contracts. Talison ceased mine production, taking about a third of primary supply out of the market, and was soon followed by other conventional producers.

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.

Several projects are at various stages of development around the world and some could be in production by 2011 or 2012. Combined, their output would solve the tantalum supply question for the foreseeable future and obviate the need to source “conflict minerals”.

It is almost certain 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 Talison to reopen.

Table of Contents 1 Summary 1 2 Introduction 5 2.1 Occurrence and reserves of tantalum minerals 5 2.2 Mining and processing of tantalum 8 3 Overview of world tantalum production 12 3.1 Tantalum supply chain overview 12 3.2 Primary tantalum supply 14 3.3 Secondary tantalum supply 19 3.4 Processors’ receipts of tantalum 20 3.5 Outlook for world tantalum supply 21 4 Production and processing of tantalum by country 25 4.1 Angola 25 4.2 Argentina 25 4.3 Armenia 25 4.4 Australia 25 4.4.1 Reserves of tantalum minerals in Australia 26 4.4.2 Production of tantalum minerals in Australia 26 4.4.2.1 Exports 26 4.4.3 Past, current and potential producers of tantalum 27 minerals in Australia 4.4.3.1 ABM Resources NL 27 4.4.3.2 Alkane Resources Ltd. 28 4.4.3.3 Galaxy Resources Ltd. 29 4.4.3.4 Haddington Resources Ltd. 30 4.4.3.5 Lynas Corp. Ltd. 31 4.4.3.6 Queensland Gold & Minerals Ltd. (QGM) 32 4.4.3.7 Talison Minerals Pty. Ltd. 32 4.4.3.8 Other 34 4.5 Austria 35 4.6 Belgium 36 4.7 Bolivia 36 4.8 Brazil 37 4.8.1 Reserves of tantalum minerals in Brazil 37 4.8.2 Production of tantalum minerals in Brazil 38 4.8.3 Past and current producers of tantalum in Brazil 39 4.8.3.1 Cia. Industrial Fluminense (CIF) 39 4.8.3.2 Minsur 39 4.8.3.3 Other 40 4.9 Burundi 41 4.1 Cameroon 42 4.11 Canada 42 4.11.1 Reserves of tantalum in Canada 42 4.11.2 Production of tantalum minerals in Canada 45 4.11.3 Past, current and potential producers of tantalum 46 minerals in Canada 4.11.3.1 Avalon Rare Metals Inc. 46 4.11.3.2 Commerce Resources Corp. 47 4.11.3.3 Les Mineraux Crevier 48 4.11.3.4 Tantalum Mining Corp. of Canada Ltd. (Tanco) 48 4.11.3.5 Other 49 4.12 Chad 50 4.13 China 50 4.13.1 Reserves of tantalum minerals in China 50 4.13.2 Production of tantalum minerals in China 51 4.13.2.1 International trade in tantalum products 52 4.13.3 Current and potential producers of tantalum in China 52 4.13.3.1 Minning Tantalum-Niobium Mining Development 52 4.13.3.2 Yichun Tantalum Co. Ltd. 53 4.13.3.3 Other 53 4.13.4 Processors of tantalum in China 54 4.13.4.1 Conghua Tantalum & Niobium Smeltery 55 4.13.4.2 Duoluoshan Sapphire Rare Metal Co. 55 4.13.4.3 F&X Electro-Materials Ltd. 55 4.13.4.4 Fogang Jiata Metals Co. Ltd. 56 4.13.4.5 Jiangxi Yizhong Nonferrous Metal Plant 56 4.13.4.6 Jiujiang TaNbRe Smelter 56 4.13.4.7 King-Tan Tantalum Industry Co. Ltd. 57 4.13.4.8 Lingguang Electronic Chemical Material Technology Co. 57 4.13.4.9 Ningxia Orient Tantalum Industry Co. Ltd. 57 4.13.4.10 Yifeng Guizu 58 4.13.4.11 Zhuzhou Cemented Carbide Works 58 4.13.4.12 Other 58 4.14 Congo Brazzaville 58 4.15 Cote d’Ivoire 59 4.16 Czech Republic 59 4.17 Democratic Republic of Congo 59 4.18 Egypt 61 4.18.1 Tantalum Egypt JSC 61 4.19 Equatorial Guinea 63 4.2 Estonia 63 4.21 Ethiopia 64 4.22 Finland 64 4.23 France 65 4.24 Germany 65 4.24.1 Processors of tantalum in Germany 65 4.24.1.1 GfE 66 4.24.1.2 Freiberger NE-Metall GmbH 66 4.24.1.3 WC Heraeus GmbH 66 4.24.1.4 H.C. Starck 66 4.25 Ghana 67 4.26 Greenland 67 4.27 Guyana 68 4.28 Guyane 68 4.29 India 68 4.3 Ireland 68 4.31 Japan 69 4.31.1 Processors of tantalum in Japan 69 4.31.1.1 Cabot Supermetals KK 69 4.31.1.2 H.C. Starck-V Tech Ltd. 69 4.31.1.3 Mitsui Mining and Smelting Co. 70 4.31.1.4 Other 70 4.32 Kazakhstan 70 4.32.1 Reserves of tantalum minerals in Kazakhstan 71 4.32.2 Production of tantalum in Kazakhstan 71 4.32.3 Producers and processors of tantalum in Kazakhstan 71 4.32.3.1 Belogorsky Mining-Concentrating Combine 71 4.32.3.2 Irtysh Chemical-Metallurgical Plant (IKhMZ) 72 4.32.3.3 Ulba Metallurgical Plant (UMP) 73 4.33 Kyrgyzstan 74 4.34 Malawi 75 4.35 Malaysia 75 4.36 Mongolia 77 4.37 Morocco 77 4.38 Mozambique 77 4.38.1 Production of tantalum minerals in Mozambique 77 4.38.1.1 Exports 78 4.38.2 Past, current and potential producers of tantalum minerals in Mozambique 79 4.38.2.1 Noventa Ltd. 79 4.38.2.2 Other 80 4.39 Namibia 81 4.4 Nigeria 83 4.40.1 Production of tantalum minerals in Nigeria 84 4.40.2 Producers of tantalum minerals in Nigeria 84 4.41 Portugal 85 4.42 Russia 86 4.42.1 Reserves of tantalum minerals in Russia 86 4.42.2 Producers and processors of tantalum in Russia 87 4.42.2.1 Lovozero mining-concentrating combine (Lovozero GOK, 87 LGOK) 4.42.2.2 Solikamsk Magnesium Works (SMZ) 87 4.42.2.3 Other 88 4.43 Rwanda 89 4.44 Saudi Arabia 91 4.44.1 Reserves of tantalum minerals in Saudi Arabia 91 4.44.2 Tertiary Minerals plc 92 4.45 Sierra Leone 93 4.46 Singapore 93 4.47 Somalia 93 4.48 South Africa 94 4.49 Spain 94 4.5 Thailand 95 4.50.1 Production of tantalum-bearing minerals in Thailand 95 4.50.2 Producers and processors of tantalum in Thailand 96 4.50.2.1 H.C. Starck (Thailand) Co. Ltd. 96 4.50.2.2 Thailand Smelting and Refining Co. (Thaisarco) 96 4.51 Uganda 97 4.52 Ukraine 98 4.53 UK 98 4.54 USA 99 4.54.1 Processors of tantalum in the USA 100 4.54.1.1 Cabot Supermetals 100 4.54.1.2 H.C. Starck Inc. 101 4.55 Venezuela 101 4.56 Zambia 102 4.57 Zimbabwe 102 5 International trade in tantalum 104 6 Overview of world tantalum consumption 110 7 End uses of tantalum 113 7.1 Use of tantalum in capacitors 115 7.1.1 Capacitor materials, types and development 115 7.1.2 Producers of tantalum capacitors 118 7.1.3 Production and consumption of tantalum capacitors 118 7.1.4 Consumption of tantalum in capacitors 121 7.1.4.1 Outlook for consumption of tantalum in capacitors 122 7.2 Use of tantalum in other electronics applications 123 7.2.1 Sputtering targets 124 7.2.2 SAW filters 124 7.3 Use of tantalum in alloy additives 125 7.3.1 Superalloys 126 7.3.1.1 Development of nickel-based superalloys 126 7.3.1.2 Production and consumption of superalloys 128 7.3.1.3 Aerospace industry trends 130 7.3.1.4 Non-aerospace industry trends 133 7.4 Use of tantalum mill products 136 7.4.1 Consumption of tantalum mill products 137 7.4.2 Applications for tantalum mill products 138 7.4.2.1 Corrosion-resistant applications for tantalum mill 138 products 7.4.2.2 Other uses 141 7.5 Use of tantalum in cemented carbides 143 7.6 Use of tantalum chemicals 146 8 Tantalum prices 147 8.1 Prices of tantalum minerals 147 8.2 Prices of tantalum products 151

The Economics of Tantalum (10th Edition 2009) is available at GBP2500 / US $5000 / 4000 Euros from Roskill Information Services Ltd, 27a Leopold Road, London SW19 7BB, England.

Tel: +44-20-8944-0066. Fax +44-20-8947-9568 Email: info@roskill.co.uk

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Source: Roskill Information Services

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