Lots of news and developments coming on this one. Just a little more patience IMO. More info on tantalum:
1. COMMODITIES & AGRICULTURE: Tantalum demand grows as electronic devices shrink: From a contaminant to an essential of high-tech production, new sources of the metal are being sought, writes Paul Solman:
COMMODITIES & AGRICULTURE: Tantalum demand grows as electronic devices shrink: From a contaminant to an essential of high-tech production, new sources of the metal are being sought, writes Paul Solman:
85% match; Financial Times ; 23-Nov-1999 02:14:48 am ; 721 words
The tantalum market is undergoing significant change as demand grows and traditional production gives way to mining from ores.
Once considered merely a contaminant in the production of tin, tantalum's applications include metal-cutting, heat-resistant super alloys for the aerospace industry, and anti-corrosive materials for the chemicals and pharmaceuticals sectors.
Since the beginning of the decade it has also become increasingly important in the electronics industry, where it is used to make high-quality capacitors for mobile phones, computers, car electronics, video cameras, pagers and other small devices.
"The main advantage of tantalum is that it has a very high capacitance per volume," says George Korinek, market analyst. "For that reason, it has benefited from the trend towards making electronic objects smaller."
There are about 20bn tantalum capacitors in use, and the latest miniature mobile phones have an average of about 10 tantalum components, Mr Korinek says.
Electronic applications for the metal have jumped so sharply in the past 10 years that they now account for almost two-thirds of consumption, compared with 12 per cent going to aerospace, 9 per cent to metal-cutting and 17 per cent to chemicals and pharmaceuticals.
Analysts estimate global demand is now about 4m lbs a year, and growing at an annual rate of 4-5 per cent.
A side-effect of that growth is that one of the traditional production methods is beginning to be exhausted.
Twenty years ago, about 70 per cent of the world's tantalum was recovered from slag created by production of tin. As the slags have run down, the amount of tantalum produced from this source has diminished, now accounting for only 18 per cent of annual production.
A small amount is recovered from recycled scrap, processors' stockpiles and from strategic metal supplies held by the US Defense Logistics Agency, which are being run down.
However, the main source of tantalum has shifted to mining from hard ores, which accounts for 40 per cent of supplies.
"There will always be a certain amount of tantalum produced from tin slags, but hard ores are becoming more and more important to satisfy demand for the metal," says Peter Lalor, executive chairman of Australian mining group Sons of Gwalia.
SGW's core business is gold, but it also has the world's largest tantalum reserves at its Greenbush and Wogina mines in Western Australia, and produced 929,000 lbs of tantalum in the 1999 financial year.
Smaller mining opera-tions are located at the Yichun mine in China, Metallurg in Brazil and Tanco in Canada, but SGW accounts for half of mined tantalum production.
"Up until about three or four years ago, there was genuine concern among tantalum users about whether there would be sufficient production to satisfy the growth in demand," Mr Lalor says. "However, the development of Greenbush and Wogina has ensured we will be able to keep up."
Mr Lalor says that even without further exploration, SGW has tantalum reserves of about 50m lbs. However, the group is also investing heavily in research and development in an effort to increase the amount of tantalum recovered from ore.
This is crucial if prices of the metal are to remain under control.
Market values of tantalum are difficult to gauge as much of the metal is sold through confidential long-term contracts. SGW has deals with Cabot Corporation of the US and H.C. Starck, part of Germany's Bayer group, both of which are leading processors of tantalum.
However, Metal Bulletin, the trade magazine, quotes prices of about Dollars 40 a pound, and industry insiders say the highest quality metal can be worth Dollars 50 a pound on the spot market.
Prices have risen sharply from about Dollars 30 in the past two or three years on the back of the rising demand in the electronics industry, but producers and traders are keen to avoid further big increases.
Though tantalum is a premium material for manufacturing miniature capacitors, it faces competition from less expensive materials such as aluminium and ceramics.
"Increasing demand could push prices up further, but our challenge is to ensure that we get a good rate of return from our production," Mr Lalor says. "There is a keen understanding in the industry that allowing prices to rise fast would be shooting ourselves in the foot."
Copyright © The Financial Times Limited
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