Tantalum, the Precious Metal You've
Never Heard Of
April 5, 2001 8:30am ET
by Sarah Burgess
Staff Writer
Canadian mining companies are on the hunt for tantalum.
Tantalum's presence in consumer goods is ubiquitous. It can be found
in Nintendo's (NTDOY:OTC) Gameboy and Sony's (SNE:NYSE)
Playstation 2, and inside cell phones and pagers.
The metal is an excellent conductor of electricity and so it is used in
the manufacturing of capacitors critical computer components,
tantalum's principal market.
Tantalum has many other uses besides its starring role as an electrical
conductor. Because it is unaffected by body fluids and causes no
adverse tissue reactions, it is used in dental and surgical instruments
and prostheses.
The metal is also used in superalloys for nuclear reactors, engines,
fighter planes and weapon systems. As tantalum resists corrosion, it is
suited for chemical processing in applications such as the
manufacturing of pharmaceuticals and insecticides.
The demand for tantalum has risen astronomically over the past few
years, as supplies mined in Africa are dwindling. A recent report from
Merrill Lynch warned investors in the electronic-components
industry,"we have become much more concerned [that] the short
supply of tantalum powder could make earnings-per-share growth even
more challenging during 2001."
The Ontario Geological Survey (OGS) estimates that the demand for
tantalum rose about 20 percent this year due to growth in the
electronics industry. An intrepid group of Canadian mining companies
has pledged to unearth significant stores of the metal in northwestern
Ontario and in parts of Manitoba and Quebec.
Currently, there is only one tantalum mine in North America. The mine
is located at Lac du Bonnet in Manitoba and is owned by Tantalum
Mining Corp. of Canada, a wholly owned subsidiary of Cabot Corp
(CBT:NYSE). The Canadian mine accounts for only a tiny share of
world production.
"The market is booming right now," said David Lewis, a senior markets
analyst for Cabot Corp. Cabot is a major supplier of tantalum, which is
part of the company's focus on high-performance materials.
Cabot purchases most of its tantalum from a wide variety suppliers, an
expensive means of getting the metal to its customers. Cabot would
consider developing other sources, Lewis said. However, he adds, "It's
not really our mission in life to be in the mining industry."
Supplying about 25 percent of the world market in tantalum,
Australian-based gold mining company Sons of Gwalia (SOGAY:OTC),
is considered to be the biggest player in tantalum mining.
The company plans to double production to 2.3-million pounds a year
by 2003 by spending (Aust.) $100-million, but many think there will be
a need for more mines around the world.
Canadian mining companies are focussing on northwestern Ontario as
the hotbed for tantalum. "They [tantalum prospects] are a tough
target," said Donald Bubar, president of Avalon Ventures (AVL:CDNX)
of Toronto, ON.
The metal is found in low concentrations in oxide rocks, which are
non-conductors, making it difficult to find targets using geophysical
techniques and airborne surveys. "Northwestern Ontario is just prime
geology to find these types of deposits," Bubar said.
Avalon is currently exploring two targets in Ontario and one at the
border with Manitoba. The mining company has signed a deal with a
private company in the tantalum industry, giving that firm the right to
earn a 50-percent interest in any of Avalon's tantalum targets by
spending (Cdn.) $5-million on exploration.
"It's just good old-fashioned prospecting, along with a good knowledge
of what the rare metals look like in the field, that will result in the
discovery of most tantalum prospects," said Dr. Frederick Breaks, a
geoscientist with the OGS.
Breaks has been involved in a project attempting to find tantalum in
the far reaches of Ontario. The program has been under way since
1993, and many discoveries have been made in the Kenora, ON, area
but none yet that are big enough to justify a mine.
Tantalum Mining of Canada has signed a deal with Gossan Resources
(GSS:CDNX) of Winnipeg, MN, to explore a property near Kenora.
Houston Lake Mining (HLM:CDNX) of Val Caron, ON, and Champion
Bear Resources (CBA:CDNX) of Calgary, AB, have joined the hunt for
tantalum in Ontario.
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THE MAIN VEIN
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8:30am ET
by Sarah Burgess
Staff Writer
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THE MAIN VEIN
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