What China and the DRC Mean for Tin Investment, Tantalum and Conflict Minerals Legislation Part Two

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So what does all this tin investment have to do with conflict minerals?

Tantalum, the hotly talked-about rare earth metal, is a byproduct of tin mining and smelting, and the Democratic Republic of Congo is an important source of both. (The DRC is known for being a producer of coltan, which is the industrial name of columbite-tantalite, the mineral from which niobium and tantalite are extracted.)

From one of Lisa’s recent pieces on the tantalum market, we can see the complex pricing issues at work: “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.

Although central African coltan is a comparatively minor source of tantalum, the DRC’s tantalum production accounts for roughly 15 to 20 percent of the world’s total according to the SEC and the country has been at the center of the recent policy firestorm regarding conflict minerals legislation. A recent MetalMiner contributor, Lawrence Heim, has written a series of posts detailing the new conflict minerals law (known as the Frank-Dodd Law) and its implications for the metal supply chain. The bottom line is that although as many as 14,000 companies (SEC-regulated and non-regulated suppliers of the former) may have to file conflict minerals reports, yet many scrap dealers still have access to plenty of loopholes to steer clear of adhering to the law.

Just recently, the DRC will lift the mining ban that the administration imposed on the eastern North Kivu, South Kivu and Maniema, effective on March 10, 2011, according to Reuters via an ITRI news release. These regions produce tin, coltan and gold, and are said to account for 85 percent of the country’s tin production. The initial ban, which came down last September, intended to cut off funding to the illegal activities of armed groups in those areas. The DRC government said they had removed a number of these groups as a result of the ban, and is now working in tandem with international bodies to “develop ways of tracing the supply chain of its minerals, said DRC Mines Minister Martin Kabwelulu at a February conference in Kinshasa.

As the DRC appears to be a hot zone for both tantalum and tin, tin investors would be smart to keep an eye on this contentious region and what it could mean for tin supply.

–Taras Berezowsky
*Please click here to download the MetalMiner Conflict Minerals Legislative Guide, covering the details of the new Dodd-Frank Wall Street Reform and Consumer Protection Act and how mandated audits will affect companies that purchase tin, tantalum, tungsten and gold.

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