Rare Metals Seen Growing in Significance
By Lesley Wroughton
TORONTO (Reuters) - Just 20 years ago mining companies were discarding rare metals like tantalum, which today is a major component in mobile phones and electrical devices.
Australia's Sons of Gwalia (SGW.AX), the world's biggest tantalum producer, promotes tantalum as the best material to store and release electrical charges, and exceptional resistance to corrosion.
David Paull, general manager of business development for Sons of Gwalia, said on Tuesday 2002 will see a slight recovery in tantalum demand after dramatic declines in 2001 when inventory buildup from the previous year went back into the system.
Speaking at the annual Prospectors and Developers Conference of Canada -- a showcase for new mining trends -- Paull said tantalum demand in 2000 was around 5 million pounds but demand in 2001 would probably be less than that.
Last year's slowdown saw spot tantalite prices drop in 2001 to $35 a pound from $100 dollars, and Paull said prices were expected to remain low for the short to medium term due to the availability of ore.
"Maintaining ore prices at a stable level going forward is an important influence to keep customers using tantalum products," he said.
He said Sons of Gwalia had initiated a "buffer" stockpile of around 300,000 pounds to give customers confidence after recent perceptions of shortages.
DEMAND RETURNS
He said in 2003 to 2004 demand was expected to return to its 'normal' growth rate of about 6-7 percent annually, however that could change with the emergence of third-generation mobiles(G3). Other growth areas were in the safety performance of vehicles including airbag trigger mechanisms and braking systems.
He said the metal was also being used in the super alloys industry, and in the last decade it had been used in an alloy form in the aerospace industry and turbine business.
By sector, the electronics industry is the biggest user of tantalum at 61 percent, 15 percent used in mill products, 10 percent in super alloys, and 6 percent in chemicals.
Other sources of tantalum worldwide include Africa, and the Defense National Stockpile Center in the United States which has been a consistent seller of tantalum of around 300,000 pounds, Paull said.
Paull said that tantalum producers had become more environmentally aware since customers like Nokia Corp (NYSE:NOK - news) Motorola Inc (NYSE:MOT - news), and Intel Corp (NasdaqNM:INTC - news) were increasingly being pressured by political and green activists.
Canada's Cambior Inc (Toronto:CBJ.TO - news), one of the world's biggest producers of another rare metal, ferro-niobium, told conference delegates it expected demand to grow between two and three percent a year but that depended on steel demand.
Cambior's marketing manager, Claude Dufresne, said that in the last two years world consumption of ferro-niobium had flattened with 34 percent consumed in Europe, 29 percent in North America, and 18 percent in Japan.
The biggest uses were in the steel industry, stainless steel, iron and steel production, and cutting tools.
Dufresne said there was about 14,000 tonnes of ferro-niobium in inventory currently, with the majority of this from Brazil's CBMM, the world's biggest ferro-niobium producer.
(Reuters Toronto newsroom +416-941-8101, toronto.newsroom@reuters.com)
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