Tantalum Prices About to Go Through The Roof?

by Lisa Reisman on

More than two years ago, MetalMiner reported that one of the world’s leading tantalum producers, then Talison Minerals (now Global Advanced Metals) closed its operations at Wodgina due to poor demand just after the global economic crisis in late 2008. This past Monday, Global Advanced Metals announced it would re-open the Wodgina mine as well as Greenbushes, its processing operation, to the tune of 700,000 pounds of material. Wodgina has annual capacity of 1.4 million pounds of tantalum pentoxide. The Wodgina operation, according to a press release on the company’s website, represents one third of global supply when fully operational.

Clearly some market dynamics have shifted within the tantalum market.

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Try keying in “tantalum prices” into Google and one can find few if any reference prices, though Infomine does have some pricing (though it’s unclear exactly what the pricing covers) or perhaps the old articles we ran back in early 2009 including this one (tantalite ore back in Dec. 2008 had been in the $36-37/lb range) provide additional price points. Reuters published a piece today with European spot pricing (scroll further down). The only other pricing available involves spot pricing from Africa. But spot pricing may no longer provide a viable means of understanding market trends, primarily because that market has dried up, so to speak.

Welcome to the murky world of global tantalum pricing, in which a few world buyers and sellers set prices based upon actual transaction prices.

Sources tell us that historically long-term contract pricing runs higher to the spot price. And that means a concentrate price in the $120/lb range. How does one come up with that figure?

Let’s review tantalum’s forms and a few rules of thumb. Tantalum comes in basically three forms: tantalum ore and concentrate (where our sources tell us long-term pricing could easily exceed $120/lb with African spot prices at $60/lb, though one can’t actually buy African tantalum at that price), tantalum oxide/salts (which essentially double the ore prices) and finally, capacitor-grade tantalum powder, now at approximately $300/lb according to our sources. It’s this last grade that finds its way into the electronics we own.

In 2008 Global Advanced Metals had asked for higher prices to justify production cost increases at their Wodgina mine. Considering mining economics, one can assume the mine achieved its price per pound target based upon what they had sought in 2008, $120/lb.

We speculate their economic break-even point at about $100/lb. The fact they have made this announcement, opening their mining operations suggests to us that tantalum concentrate prices may already be in the $120/lb range. Reuters published this European tantalite (ore) spot market price chart today:

Source: Reuters

So why the price spike for tantalum?

As a reminder, tantalum is used in cell phones, DVD players, PCs, digital cameras, LCD screens, and game consoles. It is also an essential component for jet turbine blades, nuclear reactors … and the list goes on. On January 1 of this year, the Frank-Dodd financial reform bill went into effect requiring US corporations to “state whether they source ‘conflict minerals’ from both Congo and neighboring countries” and “report on steps taken to exclude conflict sources from their supply chains, backed by independent audits.

Even China has stopped purchasing tantalum on the spot market, because of the conflict minerals legislation. China has historically served as the largest purchaser of this material. It should come as no surprise that Chinese ODMs and contract manufacturers had great concern and interest in keeping their US customers from Apple to Intel to Toyota.

The largest tantalum processor in China, Ningxia Non Ferrous Metals, purchased 91 metric tons of tantalum concentrate from CI Fluminense (Brazil) in July 2010 at $80.00 per pound. At the time, that represented a 30% premium to the existing tantalum price of $60/lb.

Will these new prices stick and will new capacity come on stream? The signs may suggest yes.

More on tantalum and other conflict minerals in our CM Resource Center here. 

Comments (27)

  1. Marx says:

    Who said you can’t buy tantalum from Africa? Starck and Cabot have both been procuring large amounts of Ethiopian material at anywhere from $120-140/lb for 30-35% material.

    1. admin says:

      Perhaps we should re-phrase…the supply chains from Africa have certainly become more tenuous due to ethical sourcing considerations…LAR

      1. Oduduwa says:

        Admin, you don’t need to rephrase you need to correct the notion that whenever Africans have something to offer such words of yours discourages businesses from even attempting to buy from Africa, only war and violence is advertised about Africa. why?

  2. I believe that tantalite prices are currently at $122.00 per pound. There are two data points for this conclusion- first, as you stated, the $120 per pound price to re-open Wodgina; and 2) the Ethiopian Mineral Resources auction, which fetched $122.00 per pound for contained tantalite. So we are at $122.00 I think. But I think the price has the ability to go higher. Your data on the Brazilians is a bit dated. They are a key player here and a very consistent one; so they may demand a premium above $122 per pound because they deserve it for not only sticking with it, but also because of prior investments in infrastructure. So $150 per pound before June is a real probability in my analysis.

  3. admin says:

    Dennis, thanks for your comments and insight. We welcome your analysis! LAR

  4. its all politics and “big powers” and multi nationals manipulations as usual in the East DRC, seen then same happening with rough diamonds and De Beers manipulations

  5. T.Yee says:

    Any idea how the pricing works:
    $ 120 per lb. for 30-34% concentration does this equal to:
    300 (or 340) x $ 264 ($120 x 2.2) = $79,200 per metric ton

  6. Philip Pereira says:

    I am ceo of a exploration/mining co.We are presentely applying for mining licences in Nigeria,we have proven reserves of around 900,000lbs containing 50%Ta205.We have indicated reserves of 1,584,000 lbs from surface two meters down.we have a resource of 29,228,400 ore containing 9,703.8 tons Ta205@332ppm,from surface 20 meters down.Nigeria is capable of supplying any shortfall in the tantalite market,and will start production later this year.

  7. Currently, we have a sizeable quantity of CP grade scrap tantalum in our inventory. I’m currently looking for a good consuming home for this material, other than Starck or Cabot.

  8. Juan Gutierrez says:

    We hear all the time that the US has few tantalum resources, and they are too low of a grade to develop. We are currently trying to reactivate the McAllister Ta-Sn property in Alabama even though its defined reserves are only one million pounds of 1% Ta205. Given the demand for this strategic minor metal and its projected future prices, why isn’t there more exploration activity for tantalum here in the U.S?

  9. Farai says:

    I am looking for Europe and USA tantalite buyers.

    30-40% grade.

  10. Dennis Sheets says:

    Are there any buys of scrap tantalum capacitors in the US?

  11. Cmotyka03 says:

    the escrap industry does not recover tantalum but there is a refiner on the east coast that does recover tantalum from just capacitors

    1. Joe1938 says:

      Can you provide me a name and number?

  12. Tylertoymender says:

    ntalum/columbite crystals rom the Black Hills of South Dakota.  How do I sell them?  tylertoymender@yahoo.com

  13. Benon says:

    Hello everyone,

    I am just wondering whether anyone has an idea which company sells high concentrated Tantalum at least 60% concentration. A minimum of one year contract to be issued. It a South Korea company interested. More than 1,000MT required. My email is benonk@gmail.com

  14. Benon, if these folks can’t help you, I’d suggest finding a tantalum-based LinkedIn group. Good luck!

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