Markets

TANTALUM

Tantalum metal (element number 73 in the periodic table) is a blue-gray in colour, heavy, hard and dense transitional metal (7.935 g/cm3) discovered in 1802 by Anders Gustaf Ekeberg and named after a character Tantalus from Greek mythology. Tantalum is highly conductive of heat and electricity and very inert to chemical attack and corrosion resistant to acids. It has a high melting point (3,017 degrees C), is relatively rare in nature and easily fabricated (Wikipedia).

Mineralogy

Tantalum can occur in some 70 or more minerals. The minerals of greatest economic potential are: tantalite, microlite, wodginite, euxenite and polycrase. Tantalum commonly occurs with the chemically similar metal niobium. Coltan is a parochial name referring to a mixture of tantalite and columbite. Tantalite is the most important of these minerals for the extraction of tantalum.

Uses of tantalum

As tantalum is highly corrosion resistant it is widely used as a component in alloys. Common uses include capacitors for automotive electronics and computers. Other uses are in medical applications (surgical instruments and implants) as it is immune to body fluids and tolerated by the body; aircraft, the nuclear industry, glass lenses, vacuum furnaces, and in munitions.

Tantalum pricing

SMA can direct its sales via Nagrom Laboratories to either Global Advanced Metals (GAM) Perth or investigate other sale opportunities to maximise the value. For a premium grade 30% Ta2O5 concentrate with low U3O8 and ThO2 an estimated 2021 price is US$120/kg.

Resources

Australia historically has been the world’s largest producer of tantalite concentrates from two mines; Greenbushes and Wodgina in Western Australia. More recently there has been production from the Mt Cattlin lithium mine, Western Australia. Brazil, Mozambique, Rwanda and Canada are all significant producers. China, Thailand, Nigeria and Portugal are also producers.

Other deposits of significance in Australia are being developed for rare earth minerals with tantalum production as a possible by-product.

Markets

Outlook to 2030, 16th Edition by Roskill

Tantalum market development was somewhat paused in 2020, with global demand reduced significantly across all sectors and a hiatus on the ramp up of by-product tantalum concentrate from Australia on the supply side. However, recovery is on the horizon as the market enters Q1, with a reversal of these trends and a return to longer-term growth expected over the coming years.

Tantalum is a critical material in many of the niche industries where it has carved out a home, with limited threat from substitution and reliable high-performance consumers in sectors such as aerospace, medical and military. However, the unprecedented roller coaster of 2020 has resulted in dramatic changes for tantalum.

Early on in 2020, the impact on tantalum was fairly limited. Unlike many industries, the proportion of supply from China is relatively small, only around 7% of primary mine production. The major suppliers in recent years have been Central Africa (mainly the DRC and Rwanda with a high proportion of artisanal production) and Brazil (from AMG’s Mibra and Mineração Taboca’s Pitinga mines). However, production of by-product tantalum from new lithium operations in Australia has taken increasing market share, mainly from African supply. Tantalum concentrate from Australia accounted for 3% of primary global supply in 2017, but this had increased to 14% by 2019. Ramp up of the lithium mines had been spurred by bourgeoning demand in the lithium-ion battery sector, for use in EVs and energy storage, but a downturn in China’s EV sector in 2019, followed by the shock of COVID-19 in 2020, has forced most of the Australian producers to suspend mining, with some continuing to produce from stocks.

Alita Resources, which produces lithium/tantalum from the Bald Hill operation, entered voluntary administration in August 2019. Altura Mining, which operates the Pilgangoora lithium mine containing tantalum for potential future recovery, entered administration in October 2020, with neighbour Pilbara Minerals looking to purchase its assets to add to its own Pilgangoora lithium/tantalum operation. However, with China’s EV market recovering strongly from the middle of 2020, the sector is poised for a return to higher rates of lithium and by-product tantalum recovery in 2021. This material potentially offers a more sustainable and traceable product compared to African-sourced tantalum which, despite major improvements over the last decade, continues to be associated with fears of conflict mining and illegal smuggling. The EU’s new Conflict Minerals regulation will come into play in 2021, reinforcing the aims of the 2010 US Dodd Frank provision to put more responsibility on the shoulders of consumers to ensure sustainability.

The largest application for tantalum is in high performance capacitors which was experiencing strong growth prior to 2020 thanks to the roll out of 5G infrastructure and booming electrification in our homes, cars and workspaces. With roll out plans put on hold and reduced consumer spending, 2020 saw a decline of 15-20% in this sector. Other major markets such as anti-corrosive materials for the chemical processing industry, mill products, and cemented carbides were even worse affected. However, by far the biggest losses in 2020 came from aerospace, where demand for specialist tantalum alloys is thought to have almost halved in 2020 as a result of the hiatus on most air travel, and the grounding of Boeing’s 737 Max aircraft. However, again, recovery had already begun towards the end of 2020, with a pick-up in monthly deliveries and a resumption of flying for the beleaguered Boeing model. Roskill expects demand recovery to lead to a spike in tantalum demand in 2021, and forecasts a return to optimistic growth rates in the long-term.

Tantalum concentrate prices fell from a peak of US$100/lb (CIF China, 30% Ta2O5) in mid-2018 with an influx of by-product material, almost halving to their lowest point in August 2019 at US$53/lb. As Australian supply slowed down, prices recovered, and continued to rise through H1 2020 despite COVID-19. From August 2020, however, the pronounced effects of COVID-19 on tantalum demand filtered through to prices, which fell to a low of US$51/lb by the end of the year. With a hint of recovery going into 2021, Roskill expects prices to rise again as tantalum demand returns through 2021 but, long term, upward price movement will be limited as Australian supply re-enters the market.