Luisa Moreno, Ph.D, Equity Research Analyst with Jacob Securities Inc. has released their premier research report on the rare metals tantalum and niobium. The report mentions the listed companies with clear exposure to tantalum and niobium. This includes Commerce Resources Corp. (TSXv: CCE), Noventa Ltd. (TSX: NTA) and Pacific Wildcat Resources Corp. (TSXv: PAW).
Osisko Gold Royalties Ltd - Corporate Presentation, March 2024
Rare Metals Report on Tantalum & Niobium by Jacob Securities (July 19, 2011)
1. EQUITY RESEARCH
Luisa Moreno, Ph.D, Analyst
lmoreno@jacobsecurities.com
+1 (416)866-8380
July 19, 2011
Tantalum and Niobium Primer Stock Rating: SPECULATIVE BUY
Risk Rating: High
Two Critical Metals
Jacob Securities Inc. (“Jacob Securities”) does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
For analyst certification and other important disclosures, refer to the Disclosure Section, at the end of this report
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Contents
Investment Summary .............................................................................................................................................................. 3
General Properties .................................................................................................................................................................. 4
Mineralogy and Occurrences .................................................................................................................................................. 4
Resources and Reserves.......................................................................................................................................................... 8
Mining and Processing ............................................................................................................................................................ 9
World Supply ......................................................................................................................................................................... 11
World Demand ...................................................................................................................................................................... 16
International Trade ............................................................................................................................................................... 23
Prices ..................................................................................................................................................................................... 24
Recycling and Substitution .................................................................................................................................................... 26
Profiled Companies ............................................................................................................................................................... 27
Acronyms .............................................................................................................................................................................. 35
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Investment Summary
Two Critical Metals
There is currently a growing supply gap of tantalum products. This situation has
been caused by the fact that the largest tantalum mines in Australia, Canada and
There is a growing
Africa were forced to close in 2008–2009 due to the global economic slowdown and
supply-demand gap for depressed tantalum prices. There are currently a few mines and projects under
tantalum. development, and those that are able to start first and have a production cost
advantage will have a better chance to secure contracts with the top three
processors and develop a sustainable tantalum mine business.
The European Union (EU) has recently declared niobium and tantalum as critical
metals. Brazil, the world’s ultimate producer of niobium, has recently engaged in a
joint venture (JV) with Korean and Japanese companies with the aim to gain access
Niobium and tantalum
to new processing technologies and expand niobium applications and production. A
have been declared drastic difference from the current rare earth situation between China and the rest of
critical elements by the world. The EU has identified niobium as a critical material given its unique
EU. characteristics and significance for the EU manufacturers and economy. The largest
end-use market for niobium is HSLA (high strength, low alloy) Steel. Niobium
demand is expected to grow at 5–7% per year going forward, driven by the growth in
the emerging economies and their anticipated consumption of steel.
It has been estimated that in 2009 about 50% of the tantalum supply was from the
DRC and Rwanda, two zones affected by brutal guerrilla wars and genocide. Conflict
minerals from these areas are often used to support these wars. The “Conflict
A significant Minerals Law” in the U.S. aims at restricting the trade of conflict minerals, and many
percentage of tantalum technology companies, like Apple Inc. (NASDAQ:AAPL), Motorola Solutions Inc.
supply is from African
(NYSE:MSI) and AVX Corp., are taking initiatives to comply with the law. The
conflict areas.
restrictions regarding conflict minerals are likely to improve tantalum trading
conditions and keep prices at sustainable levels for conflict-free tantalum miners.
There are only a few listed companies that offer a clear exposure to tantalum and
Noventa Ltd.,Commerce
niobium, which includes: Noventa Ltd. (AIM:NVTA;TSX:NTA), Commerce Resources
Resources Corp., Corp. (TSXV:CCE), Pacific Wildcat Resources Corp. (TSXV:PAW) and Gippsland
Pacific Wildcat Ltd. (ASX:GIP). Noventa is a pure-play tantalum company, currently mining and
Resources Corp. and producing tantalum concentrate at Marropino in Mozambique. Pacific Wildcat is
Gippsland Ltd. are
exploring niobium in Kenya’s Mrima Hill deposit and evaluating the dormant Muiane
profiled in this report.
tantalum mine in Mozambique. Commerce Resources is exploring the Upper Fir
property in British Columbia for tantalum and niobium. Gippsland Ltd. is the owner of
the tantalum project Abu Dabbab in Egypt; the company plans to start production in
2013. Some of the rare earths companies, like Avalon Rare Metals Inc. (TSX:AVL)
and Quest Rare Minerals Ltd. (TSXV:QRM;OTC:QMNME), also have significant
amounts of tantalum and niobium minerals in their deposits, and lithium company
Galaxy Resources Ltd. (ASX:GXY) produces tantalum concentrate as a by-product.
Tantalum and niobium will likely keep their status of critical materials for the world’s
largest economies (e.g. U.S., Japan, EU and China) because of their essential
applications in the major growing sectors of their economies, such as the
electronics, energy, construction and manufacturing sectors.
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General Properties
Tantalum is a transition metal with atomic number 73 and atomic weight 181. The
element is usually found together with niobium with an atomic number 41 and atomic
weight 93 (Exhibit 1). The two elements are part of the Group 5 in the periodic table,
along with vanadium (V) and dubnium (Db). Tantalum is a grey blue, ductile metal with a
high melting point and high resistance to chemical attack at temperatures below 1 C.
It is, however, dissolvable in hydrofluoric acid or in acidic solutions containing fluoride
ion, sulphur trioxide and potassium hydroxide. Tantalum is easy to machine and is highly
conductive of heat and electricity. Niobium is a lustrous gray, ductile metal, and has
similar physical and chemical properties to tantalum, which makes them sometimes
difficult to distinguish.
Exhibit 1: Selected Tantalum and Niobium Properties
Properties Niobium (Nb) Tanatalum (Ta)
Atomic Number 41 73
Atomic Weight 92.90638 180.9479
Density at 293K (g/cm3) 8.581 16.677
Melting Point °C 2468 2996
Boiling point °C 4930 5425
Vickers hardness MPa 1320 873
Electrical resistivity (nano ohm-metres) 152 at 0°C 131 at 20°C
Source: BGS
Tantalum and niobium Tantalum and niobium have unique mechanical, electrical and chemical properties,
have unique and
indispensable which make them indispensable in many industrial applications. In addition to the
properties. properties listed above, they also have nearly zero electric resistance at low
temperatures, high corrosion resistance, shape memory properties and high capacitance
(i.e. ability to store electric change).
Mineralogy and Occurrences
Mineralogy
Tantalum is a fairly widely distributed element but relatively rare, with an average crustal
abundance of 1.7 mg/kg (0.000017%); niobium crustal abundance is 20 mg/kg.
Tantalum and niobium are hosted in a variety of minerals, some of which are listed in
Exhibit 2. Tantalum and niobium are almost exclusively found in complex oxide and
hydroxide minerals. Silicates of these elements exist but they are relatively rare, one
such example is the eudialyte mineral (Na4(Ca,Ce)2(Fe++,Mn,Y)ZrSi8O22(OH,Cl)2).
Tantalum and niobium also substitute ions in common oxide groups, such as the
titanium minerals, rutile and ilmenite. The oxides comprise the majority of the
economically important minerals. The most common tantalum and niobium minerals are
the columbite-tantalite (also known as coltan) group minerals. When tantalum outweighs
niobium the mineral is called tantalite, when niobium outweighs tantalum the mineral is
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called columbite. When tantalum and niobium are equally weighted it may be referred to
as coltan. Wodginite is also an important source of tantalum and pyrochlore is of
particular importance to niobium.
Niobium usually Tantalum and niobium deposits are often associated with igneous rocks (e.g.
outweighs tantalum in pegmatites, granites, syenites and carbonatites). Carbonatites and alkaline igneous
carbonatites and
syenites, whereas in
rocks (e.g. alkali granites and syenites) are usually enriched in a variety of elements,
pegmatites and granites including rare earths (REE), zirconium and niobium, but usually have low tantalum
tantalum reaches content. The main niobium-bearing minerals in these deposits usually include perovskite
higher concentrations.
and pyrochlore.
Pegmatites and granites enriched with lithium minerals, caesium, as well as tantalum
and niobium, are the main sources of tantalum in the world and usually contain lower
levels of niobium. Columbite-tantaline and wodginite are usually the main tantalum-
bearing minerals in these deposits.
Exhibit 2: Selected Tantalum and Niobium Minerals
Mineral name Mineral group Formula Nb2O5 (%) Ta2O5 (%)
Columbite Columbite-tantalite (Fe,Mn)(Nb,Ta)2O6 78.72 n.a.
Tantalite Columbite-tantalite (Fe,Mn)(Nb,Ta)2O6 n.a. 86.17
Pyrochlore Pyrochlore (Na,Ca)2Nb 2O6(O,OH,F) 75.12 n.a.
Microlite Pyrochlore (Na,Ca)2Nb 2O6(O,OH,F) n.a. 83.53
Tapiolite Tapiolite (Fe,Mn)(Ta,Nb)2O6 1.33 83.96
Ixiolite Ixiolite (Ta,Nb,Sn,Mn,Fe)4O8 8.30 68.96
Wodginite Wodginite (Ta,Nb,Sn,Mn,Fe)O2 8.37 69.58
Loparite Perovskite (Ce,La,Na,Ca,Sr)(Ti,Nb)O3 16.15 n.a.
Lueshite Perovskite NaNbO3 81.09 n.a.
Euxenite Euxenite (Y,Ca,Ce,U,Th)(Nb,Ti,Ta)2O6 47.43 22.53
Struverite Rutile (Ti,Ta,Fe)O2 11.32 37.65
Iimenorutile Rutile Fe x (Nb,Ta)2x 4Ti1-x O2 27 n.a.
Source: BGS
Occurrences
Africa: In Mozambique, the Alto Ligonha Province contains various zones of pegmatite
mineralization that have been mined since 1926. Noventa Ltd. is currently mining
tantalum at the Marropino mine and has plans to mine and explore various other sites in
the province, including Morrua, Mutala and Ginama. The Marropino pegmatite is the
classic example of zoned lithium rare-metal pegmatite rich in lithium, cesium and
tantalum (known as LCT family). Also in Mozambique, Pacific Wildcat Resources Corp.
is currently evaluating the dormant Muiane mine; the company is also exploring the
Mrima niobium deposit in Kenya. In Central Africa, tantalum-mineralized pegmatites are
associated with the Mesoproterozoic Kibaran belt and can be found in Burundi, Rwanda,
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Uganda and the Democratic Republic of Congo (DRC). In these countries, columbite-
tantalite minerals are found in weathered pegmatites and secondary placer deposits.
Tantalum-mineralized granites and pegmatites can also be found in North African
countries, including the Kenticha pegmatite in Ethiopia and the Majahayan pegmatite in
Somalia. In Egypt, the tantalum mineralization of the Abu Dabbab and Nuweibi deposit is
found in stock-like granite instead of pegmatite; the project is being developed by
Gippsland Ltd. and is near production.
The Lueshe deposit in the DRC is a carbonatite deposit and has been mined for
niobium. In Malawi, the Kanyika niobium and tantalum project is run by Globe Metals
and Mining. The large Pilanesberg alkaline complex in South Africa contains eudialyte-
rich syenites with zirconium, niobium and rare earth. Niobium and tantalum deposits of
the Alkaline to peralkaline type have also been found in Morocco, Nigeria and Namibia.
Asia: In China, 73% of tantalum and niobium mines are found in three provinces: 26% in
Jiangxi, 24% in Inner Mongolia and 23% in Guangdong. Some of the Chinese columbite
mines are characteristically small with low grades. The columbite deposits in China are
usually associated with rare earth elements (REE). For instance, the world’s largest rare
earth deposit, Bayan Obo, is also rich in niobium, and some of the REE deposits in the
country also contain small amounts of tantalum. In Malaysia and South-western
Thailand, tantalum has been produced from weathered tin-mineralized granites and
pegmatite and secondary placer deposits. The Khaldzan-Buregtey zirconium-niobium-
REE peralkaline granite-related deposit is located in western Mongolia, the main niobium
mineral is pyrochloride.
Australia has one of the largest tantalum resources, and for many years was the largest
Australia has one of the
highest tantalum
producer of tantalum. The Greenbushes and Wodgina mines, from which most of the
reserves in the world. tantalum was produced, are owned by Global Advanced Metal (formerly Talison
Minerals Pty Ltd.), and they ceased production in 2008 due to poor global economic
conditions and depressed tantalum prices. The mines are expected to resume
production in 2011. The Greenbushes deposit contains large resources of tantalum and
lithium associated with tin mineralization; the pegmatite has been exploited by both
open-pit and underground mines. At the Wodgina pegmatite district, the main tantalum
minerals include manganese-rich tantalite and wodginite.
Brazil: The Volta Grande mine in Nazareno, Minas Gerais, is characterized by albite-
Brazil is the largest spondumene-type pegmatite and is mined for tantalum, niobium and lithium. Brazil is
producer of niobium
and has the largest
currently the largest producer of niobium. The Araxá mine is the largest producing
reserves. niobium mine in the world and is owned by Companhia Brasileira de Metalurgia e
Mineração (CBMM).The second-largest niobium mine is at Catalão and is owned by
Anglo American Plc. Another carbonatite-hosted niobium deposit is the Morro dos Seis
Lagos deposit. Niobium and tantalum are also extracted from the albite-rich peralkaline
granite tin deposit at the Pitinga mine, in the Amazon state.
Canada: The Tanco pegmatite in Manitoba hosts a high variety of tantalum minerals that
are generally fine grain, making processing a challenge. The deposit also contains
caesium and lithium and is owned by Cabot Corporation.
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In the Northwest Territories, the Thor Lake igneous complex comprises syenites and
peralkaline granites with various hydrothermally mineralized zones. The deposit is
currently being explored for rare earths by Avalon Rare Metals Inc., but is also rich in
yttrium and zirconium, as well as tantalum and niobium, which are found mainly in
columbite-tantalite minerals. The Oka carbonatite complex in Quebec includes three
separate tantalum niobium deposits containing pervskite and pyrochlore group minerals.
The Niobec mine in Quebec is the largest niobium mine outside of Brazil and is owned
by IAMGOLD Corporation. Niobec is also the only known underground niobium mine in
the world. The mine lies in the southern region of the Saint-Honoré carbonatite complex;
the main mineral is pyrochlore. Nearby, the Crevier syenite carbonatite deposit with
tantalum and niobium mineralization is currently being explored. The Strange Lake
peralkaline granite deposit in Quebec is currently being evaluated by Quest Rare
Minerals Ltd. for rare earths; the deposit is also rich in tantalum and niobium.
Commonwealth of Independent States: The Tomtor deposit in Siberia, Russia, is a
carbonatite-hosted niobium deposit, and the Lovozero syenite massif is rich in eudialyte,
loparite and apatite with small percentages of niobium and tantalum.
Europe: The Sokli carbonatite complex in Finland is rich in phosphate and niobium
minerals (e.g. pyrochlore) and is owned by Yara International ASA.
Greenland: The Kvanefjeld deposit in Southwest Greenland is a multi-element deposit
containing niobium-tantalum-REE and is associated with the llimaussaq intrusive
complex. Greenland Minerals and Energy Ltd. is currently exploring the deposit. The
Motzfeld deposit owned by Ram Resources is also a multi-element deposit that has
been targeted mainly for niobium, tantalum and REE.
Saudi Arabia: The Ghurayyah alkaline granite deposit contains tantalum, niobium and
rare earths. The columbite-tantalite and pyrochlore are the main tantalum and niobium
minerals. Tertiary Minerals Plc is currently exploring the deposit.
The United States: According to the United States Geological Survey (USGS), all of the
tantalum and niobium resources in United States are considered uneconomic at 2010
prices. However, the country has a few niobium and tantalum occurrences. For instance,
in Alaska, the Ray Mountain REE deposit, now being explored by Ucore Rare Metals, is
reported as having minor amounts of tantalum and niobium. In Nebraska, Quantum Rare
earths Developments Corp. is currently exploring the Elk Creek carbonatite, located
south of Lincoln; according to the USGS, this deposit has the potential to be one of the
largest global resources of niobium and REE.
It should be noted that the tantalum and niobium occurrences discussed above include
both economic and non-economic occurrences. In the following section, we present the
tantalum and niobium resources and reserves per country. It is important to note that
resources refer to the estimated ore occurrences and reserves are the portion of
resources that can be economically mined.
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Resources and Reserves
Major resources of tantalum are located in Brazil, Australia, China and Russia. Brazil
and Australia have combined about 70% of the global tantalum reserves (Exhibit 3).
Exhibit 3: Tantalum Resources and Reserves
Australia and Brazil
have about 70% of the Resources Resources Reserves Reserves
global tantalum Country
( tonnes Ta2O5) (%) ( tonnes Ta) ( %)
reserves.
Brazil 129 274 40.8 87 360 57.2
Australia 65 771 20.7 40 560 26.5
China and Southeast Aisa 33 112 10.4 7 800 5.1
Russia and Middle East 31 298 10.0 ------ ------
Central Africa 28 576 9.0 3 120 2.0
Other Africa 21 318 6.7 12 480 8.2
North America 5 443 1.7 1 500* 1.0
Europe 2 268 0.7 ------ ------
Total 317 060 100 152 820 100
*Deemed uneconomic at 2010 prices
Source:BGS; JSI
Contrary to tantalum, most of the niobium reserves are located in only a few countries.
Brazil holds the largest niobium reserves (93%), followed by Canada (Exhibit 4). Other
unquantified niobium resources and reserves may be found in Egypt, Malawi and
Greenland.
Exhibit 4: Niobium Reserves
Niobium reserves are
almost exclusively
Reserves Reserves Contained Nb2O5
located in two Country
countries, Brazil and (tonnes) (%) (tonnes)
Canada.
Brazil 452 200 000 93.35 11 142 740
Canada 32 086 000 6.62 179 682
United States 150 000* 0.03 ------
Total 484 436 000 100 11 322 422
Source: USGS
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Mining and Processing
Mining
Tantalum and niobium are mined using conventional open-pit and underground mining
techniques. Surface mining (open pit) is used to extract near-surface deposits (<100
metres) and is generally cheaper and safer. This method involves removing large
tonnages of waste to access the ore, digging or blasting the ore with explosives, and
transporting the ore by truck or conveyor belt for processing or stockpiling. If the
mineralization is found deep in the ground, it may not be economical to remove the
unmineralized material (waste) to access the ore; as such, underground mining is
preferred.
In underground mining, various techniques may be used, depending on the type of rock.
In large ore bodies, mechanized systems can be applied, but in the case of narrow
veins, labour-intensive drilling and blasting techniques are usually used. Common less-
expensive underground mining techniques are the block-caving method and the room-
and-pillar method. In the block-caving method, very large ore bodies are drilled and
blasted in such a way that several thousand tonnes of broken ore may be extracted per
day. In the room-and-pillar method, mined material is extracted across a horizontal plane
opening multiple spaces or "rooms" underground while leaving "pillars" of untouched
material to support the roof overburden. Waste material is sometimes used to fill worked
places, which secures the roof and safely disposes of the waste. This technique has
been used at the Tanco pegmatite deposit in Canada.
Hard-rock deposits may be mined using standard surface, underground or both
methods. For example, the Wodgina tantalum open-pit mine in Australia is mined using
drilling and blasting techniques.
Extraction from placer Extraction from placer deposits usually requires less costly mining techniques. In dry-
deposits usually does
not involve drilling and mining applications, shovels, scrapers and bulldozers are used to remove and transport
blasting and requires the often unconsolidated ore to the processing plant. This method usually does not
less costly mining
techniques. require drilling and blasting, with the exception of occasional areas that may have
cemented sand. The weathered Araxá carbonatite deposit in Brazil is mined using
economic open-pit methods.
Tantalum and niobium are also extracted as by-products. It has been suggested that
about 14% of the total tantalum is extracted as a by-product, and only 2% for niobium.
Tantalum-bearing tin slags are a common source of tantalum.
Processing Methods
Tantalum and niobium minerals, such as columbite-tantalite, are first crushed and milled,
and then the ground down ore undergoes several conditioning treatments to produce a
slurry substance. During tantalum production, the ore slurry is usually concentrated to
about 30% tantalum oxide using mainly gravity and magnetic technique, depending on
the type of ore.
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In niobium concentrate production process, the ore slurry is further concentrated to
about 54% using gravity separation, froth flotation, magnetic and electrostatic
separation, and acid leaching may also be used depending on the characteristics of ore.
Once the concentration process is complete, the concentrate is usually sent to a refinery
plant where tantalum and niobium are separated using either an acid or solvent
extraction process (Exhibit 5). Niobium companies that convert niobium oxide into ferro-
niobium may do so using the aluminothermy reduction process or an electric arc
furnace.
Exhibit 5: Chemical Processing of Tantalum and Niobium Concentrates
Source: BGS
Artisanal Mining
There are positive and
negative implications Artisanal and small scale mining (ASSM) have increased significantly in recent years,
that result from particularly in developing countries. There are positive and negative results from these
artisanal and small
scale mining activities activities. ASSM has been associated with socioeconomic development in some rural
in developing countries. areas, resulting in poverty alleviation, reducing rural migration and increasing national
income. However, mining activities are often performed under poor environmental
The United States has conditions with severe and negative implications for the local environment and health of
introduced a legislation the workers (Exhibit 6). Additionally, in some situations, the revenue from ASSM has
designed to restrict the
importation and trade of been used to support brutal wars. For instance, in the DRC, minerals trade has been a
conflict minerals in significant source of revenue for armed rebel groups that have committed horrible
Central Africa, in
particular in the DRC.
human rights violations against locals. This situation has led the U.S. to introduce the
“conflict minerals” law on May 20, 2010, which requires U.S. and foreign companies
operating in the United States to report the use of conflict minerals (which includes
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tantalum) from the DRC and neighbouring countries. The idea is to restrict, to the extent
possible, the use of conflict minerals across the supply chain from processors to
manufactures at different technology levels (including electronic component producers
and cellphone manufactures). Restricting the diffusion of conflict minerals should lead to
better trading conditions and pricing of the underlying metals, allowing conflict-free
metals to be traded at fair and sustainable market prices.
Exhibit 6: Artisanal Miners
Source:Google
Estimates indicate that The DRC has large resources of columbine-tantalite minerals in many areas of the
the DRC has made in
excess of $1.0 billion country. It has been estimated that more than 50% of the world tantalum supply comes
dollars from sales of from Africa and a significant percentage of that is said to be from the DRC. It has been
conflict minerals.
estimated that in 2009, the DRC made more than US$1.0 billion through the sales of
conflict minerals. It will likely be almost impossible to completely stop the spread and use
of conflict minerals in the world, but the current law in the United States has certainly
created an awareness of the problems associated with conflict minerals and it will likely
reduce the use of these minerals significantly. There are many non-governmental
organizations working on this problem and several technology companies are refusing to
use conflict minerals-bearing components in their products. The global economic growth
(although slow), combined with the introduction of the conflict free mineral law in the
United States, and other industrial countries, has contributed to higher tantalum prices,
which should make possible the return to the market place of large tantalum producers
such as Global Advanced Metals (previously Talison Minerals Pty Ltd.) and other
companies.
World Supply
Sources
Currently only 60% of
tantalum supply is
derived from direct Tantalum supply is derived from various sources: about 60% is obtained from primary
mining. sources (i.e. direct mining of tantalum ores), 10% from secondary concentrates, 10%
from tin slags and 20% from scrap, synthetic concentrates and recycling (Exhibit 7).
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Exhibit 7: Historical Tantalum Sources
Scrap, Synthetic
Concentrates
and Recycling
20%
Primary
Tin Slag
Concentrates
10%
60%
Secondary
Concentrates
10%
Source:TCI
Niobium supply is derived mainly from primary sources (Exhibit 8), with the mineral
Niobium supply is pyrochlore accounting for more than 95% of the total primary production. Less than 15%
derived mainly from is derived from tin slags and recycling.
mining.
Exhibit 8: Niobium Sources
Recycling
10% -15%
Primary and
Secondary
concentrates
85% - 90%
Source:TCI; USGS
The Defense National Stockpile Center (DNSC), a division of The United States Defense
Logistics Agency (USDLA), used to be a significant source of tantalum and niobium.
However, in 2008, the DNSC announced that the stockpile of these metals has been
depleted and were no longer offered for sale.
Production
Tantalum Production
In the last two years, Brazil and Mozambique were the largest producers of tantalum
(Exhibit 9). The largest operating tantalum mine in Brazil is the Mibra mine at Nazareno
in Minas Gerais with a capacity of 300,000 pounds of Ta2O5 per year. In Mozambique,
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the Marropino mine has the capacity to produce 600,000 tonnes of Ta2O5 and is
Brazil and Mozambique
currently producing close to 200,000 tonnes of Ta2O5 per year. Australia used to be the
are currently the largest
producers of tantalum. world’s largest producer of tantalum and in 2 2 contributed to about 6 % or the total
world production; however, its contribution to total production was only 10% in 2010. The
two largest mines in Australia, the Wodgina and Greenbushes mines, were placed under
care and maintenance in December 2008, due to poor economic conditions and
depressed tantalum prices aggravated by increased volume of cheap conflict tantalum in
the market.
Exhibit 9: Tantalum Mine Production per Country
Ta Mine Production (tonnes)
2009 2010
Australia 81 80
Australia used to be the
largest tantalum
Brazil 180 180
producer.
Canada 25 25
Mozambique 113 110
Rwanda 104 100
Other countries * 297 310
Total 800 805
* includes Burundi, Ethiopia, Uganda, Congo (Kinshasa),
Zimbabwe and tantalum contained in tin slags
Source:BGS ; USGS; JSI
Other tantalum-producing mines are the Keticha mine in Ethiopia, the Lovozero mine in
Russia, the Yichun mine in China and the Pitinga tin mine in Brazil. Additional tantalum
production is also available in Southeast Asia, in particular in Malaysia and Thailand,
from where tantalum is produced from tin-slags, and in Canada and Central Africa from
small alluvial and soft rock deposits. Estimates indicate that Rwanda and the DRC
accounted for 40–50% of the global tantalum production in 2009, with a significant
portion from conflict areas. The volume of conflict minerals are, however, usually hard to
track and quantify.
In the late 90s, the technology sector increased at a rapid rate, driving global tantalum
The 2008 recession and
the depressed tantalum production up. Tantalum production peaked in 2001, likely associated with the dot-com
prices caused many bubble and the expectation of continuing growth in the technology sector. During that
mines around the globe
to suspend production.
period, many companies built inventories of tantalum. However, with the slowdown in the
technology sector, tantalum production decreased in the subsequent years (Exhibit 10).
The 2008 recession and the low tantalum prices caused by the oversupply of tantalum in
the market led many mines in Australia, Canada and Africa to suspend production,
leading to a more than 50% decrease in mine production.
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Exhibit 10: Tantalum Concentrate Mine Production
2,500
Ta Mine Production, tonnes
2,000
1,500
1,000
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source:BGS; JSI
Niobium Production
Brazil is the world’s largest producer of niobium (92%), followed by Canada (Exhibit 11).
Brazil has two of the largest niobium deposits in the world, the Araxá and the Catalão
deposits. The Araxá mine is operated by CBMM (Companhia Brasileira de Metalurgia e
Mineração) and it has enough reserves to supply current global demand for 500 years;
however, decreasing grades are increasing operating costs at the mine. The Catalão
mine is operated by Anglo American Brazil (a subsidiary of Anglo American plc) and has
CBMM, Anglo American about 18 million tonnes of niobium oxide. The third-largest deposit is the Niobec deposit
Brazil and IAMGOLD in Quebec with 18,000 tonnes, and is owned by IAMGOLD Corp. The main niobium
together supply about
85% of niobium to the mineral in these deposits is pyrochlore. CBMM, Anglo American Brazil and IAMGOLD
market. together supply about 85% of niobium to the market, most of it being in the form of ferro-
niobium with 60% niobium oxide content, for use in the production of high-strength, low-
alloy steel (HSLA).
Exhibit 11: Niobium Producers
Brazil is the largest
producer of niobium. Canada Other
7% 1%
Brazil
92%
Souce: USGS
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The niobium production, profile which shows a steady increase in the last six years
(Exhibit 12), is dramatically different from that of tantalum. Niobium production increased
from about 20,000 tonnes in 2000 to more than 80,000 tonnes in 2010, driven by
increased demand for HSLA steel used in the manufacture of vehicles, and in
construction of buildings, ships and refinery equipment. The increase in steel
consumption has been linked to the economic growth in the emerging markets, in
particular the BRIC countries (i.e. Brazil, China, India and Russia).
Exhibit 12: Niobium Concentrate Mine Production
90,000
80,000
Nb Mine Production. tonnes
Niobium production has
increased fourfold over 70,000
the past ten years. 60,000
50,000
40,000
30,000
20,000
10,000
-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: BGS; JSI
Projects Under Development
Tantalum supply has been constrained in recent years as a result of production halts at
the world’s largest tantalum producing mines in Australia, Canada and Mozambique. As
mentioned above, poor economic conditions in 2008 and the growing supply of cheap
conflict tantalum in the market caused significant decrease in tantalum prices, granting
many tantalum mines around the globe uneconomic and causing over a 50% decrease
in production of conflict-free tantalum in 2009. Since the introduction of the conflict-free
The growing constraint minerals law in the U.S., there have been major constraints in the diffusion of conflict
in tantalum supply has
led to an increase in tantalum; however, as previous mines struggle to re-start production there’s likely a
exploration projects. supply-demand gap forming in the market; at least in the short term. This growing
constraint in tantalum supply has led to an increase in exploration projects.
Exhibit 13 presents a list of some of the current tantalum projects. Noventa’s mine
Marropino is currently producing at a rate of about 200,000 lb/year and expects to
increase production to 600,000 pounds by the end of this year. The company has two
other tantalum projects in Morrua and Mutala with short-term production potential.
Global Advanced Metals (GAM), plans to re-start the Wodgina mine in Australia this
GAM plans to re-start
production at the year, with an initial production of 700,000 pounds per year. In Egypt, Gippsland Ltd. is
Wodgina mine this year. developing the Abu Dabbab mine scheduled for production in 2013, with a production
target of 650,000 pounds per year. In Malawi, Globe Metals and Mining is developing the
Kanyika project and plans to bring it to production in 2013. The plan is to produce 200
tonnes of ferro-niobium and 400,000 tonnes of tantalum pentoxide per year.
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Other projects under development include Commerce Resources Upper Fir deposit with
large niobium and tantalum resources, and the Motzfeldt deposit in Greenland that has
the potential of becoming an extremely large niobium-tantalum deposit with about 500
million tonnes of resources. This project is 51%-owned by Ram Resources.
Exhibit 13: Selected Projects
Resouces*,
Project/Mine Company Deposit Production Status % Ta 2O5 % Nb2O5
Million Tonnes
Wodgina, Global Advanced 700,000 lbs Ta2O5
Li-albite granite Feasibility n.a 0.027 n.a
Australia Metals (frm Talison) p.a., 2011
Marropino, Zoned LCT-type 600,000 lbs p.a
Noventa In Production 8.1 0.022 n.a
Mozambique pegmatite Ta2O5, 2011
Morrua, Zoned LCT-type 250,000 lbsp.a
Noventa Feasibility 7.8 0.049 n.a
Mozambique pegmatite Ta2O5,2012
Abu Dabbab, 650,000 lbs p.a.
Gippsland Li-albite granite Feasibility 44.5 0.025 n.a
Egypt Ta2O5, 2013
200 tonnes Fe-Nb,
Globe Metals and Carbonatite-nephelite
Kanyika, Malawi 400,000 lbs Ta2O5, Feasibility 21 0.018 0.41
Mining syenite
2013
Commerce Carbonatite-nephelite
Upper Fir, Canada n.a. Conceptional 36.4 0.019 0.17
Resources syenite
Carbonatite-nephelite
Anita, Canada Les Mineraux Crevier n.a. Conceptional 23.75 0.019 0.186
syenite
Motzfeldt, Alkaline-peralkaline
Ram Resources n.a. Conceptional 500 0.011-0.013 0.13-0.15
Greenland granite
Carbonatite-nephelite
Crevier, Canada MDN Inc. n.a. Conceptional 25.4 0.023 0.2
syenite
Carbonatite-nephelite
Mrima Hill, Kenya Pacific Wildcat n.a. Conceptional 105.3 n.a. 0.65
syenite
*Include all categories of resources
Source: BGS; JSI
World Demand
Tantalum demand has increased steadily in the last 10 years, driven by developments
and growth in the technology sector. According to Paumanok Publications Inc., a leading
market research firm in the electronic components sector, demand for tantalum
concentrate increased from 2.97 million pounds in 1995 to about 6.22 million pounds in
Estimates indicate that 2008, at an average growth rate of 6% per year. However, we think there was likely a
tantalum demand has
grown by 6% between slowdown in tantalum demand during the 2001–2002 downturn and that the preceding
1995 and 2002, but had years’ demand may have grown by double digits (10–12% in some years) driven by the
a one-year decline of
31% in 2009 due to the steady growth of the electronics industry and increasing applications for tantalum in the
recent global economic super-alloys sector. The recent global economic slowdown caused a significant
slowdown. decrease in demand for industrial metals. Tantalum demand estimates for 2009 indicate
a one-year decline of 31%, which equates to 4.3 million tonnes for that year.
Tantalum products are used in a variety of industries, such as medical, construction and
Tantalum demand
expected to grow by 9% electronics. We believe that as the global economy improves, demand for tantalum,
in the next 4 years. niobium and other industrial metals will rise. Paumanok Publications Inc. estimates that
demand for tantalum will grow 9% per year in the next four years as the markets
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recover. Exhibit 14 shows our production and demand forecast for tantalum under three
scenarios: low growth (6% CAGR), medium growth (9% CAGR) and high growth (12%
CAGR).
Exhibit 14: Tantalum Supply and Demand Forecast
10,000,000
Other Sources
8,000,000 Malawi
Egypt
6,000,000 Australia
Mozambique
4,000,000
Current Sources
Demand 6% CAGR
2,000,000
Demand 9% CAGR
Demand 12% CAGR
-
2009 2010 2011 2012 2013 2014 2015
Source: JSI
Our analysis indicates that there should be sufficient supply of tantalum in the market,
assuming a growth rate below 9% and assuming all the projects currently under
development will not be delayed or cancelled. We believe there is currently a shortfall of
tantalum in the market, caused by the 2008–2009 shutdowns of the largest tantalum
mines in Australia, Canada and Mozambique, and due to increased restriction in trade of
conflict tantalum. As tantalum production increases, however, prices are likely to fall and
High-cost tantalum
producers may be kept the lowest-cost producers will be better positioned to maintain operations. In fact, some
out of the market and of the high-cost producers may be squeezed and/or kept out of the market and new
new “low-cost”
producers may be able
“low-cost” producers may be able to enter the market by offering competitive prices.
to enter the market by Tantalum production volume estimates from the DRC vary depending on the year and
offering competitive the source. Our estimates indicate that in 2010 less than 30% of the total primary
prices.
production was obtained from conflict areas. We believe this number is likely to fall
further as old and new mines come into production. Also, given the increasing efforts to
curb “blood” minerals and the potential for new production in the near term, we do not
expect conflict-tantalum to cause major price and production disruptions going forward.
Niobium is mostly sold as ferro-niobium alloy. Estimated global annual consumption of
Niobium is mostly sold
as ferro-niobium alloy. ferro-niobium was nearly 180 million pounds in 2010.
According to Niobec, annual niobium demand has grown at a rate of 10% between 2002
and 2009, driven by the growing need for high-grade steel, especially from the emerging
economies of China and India. For example, it is estimated that China has doubled its
niobium imports in the last four years and now accounts for 30% of the global
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consumption. As demand and production of crude steel rises, demand for niobium is
also expected to rise but at a higher rate as demand for niobium in other sectors
increase.
As mentioned above, the economic growth in emerging nations is driving the demand for
The economic growth high-grade steel products, and securing niobium supplies has become an important
in developing issue for the leading steel producers, such as Korean company Posco and Nippon Steel
economies is expected
to drive up demand for Corp. in Japan. This situation has prompted a consortium of Korean and Japanese
steel and niobium. companies to invest an aggregate amount of about US$2.0 billion for a 15% stake in the
Brazilian company CBMM, the world’s largest niobium producer.
According to various niobium resource companies, the niobium market is expected to
continue to grow at a rate of 5–7% per year driven mainly by higher demand for high-
Niobium market is
expected to grow at a grade steel use in the automotive and construction industries, which are expected to
rate of 5–7% per year. expand as the global economy recovers.
Although it has been estimated that Brazil likely has sufficient niobium resources to
supply the current world demand for centuries, given the economic importance of
niobium for the leading economies, we believe that users of niobium will likely pursue
partnerships with other niobium producers around the world in the attempt to diversify
supplier and country risks. As such, if demand for niobium continues to grow, we are
likely to see new niobium producers entering the market in the next five years, especially
those with potential for low production costs.
Uses and Application
The three largest consumers of tantalum raw materials are H.C. Starck GmbH in
Germany, Cabot Corporation in the United States and Ningxia Non-Ferrous Metals
Import and Export Corporation in China (Exhibit 15). These three companies account for
about 85% of the global consumption of tantalum concentrate. Tantalum raw material is
processed to create various products, such as powders for the capacitor manufactures.
The capacitors are then sold to the circuit board assemblers, who then supply them to
high-tech companies such as Dell Inc., Airbus S.A.S., Sony Corp., etc.
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Exhibit 15: Tantalum Supply Chain
Concentrate Suppliers Concentrate Processors Tantalum Users End Users
Sources: Refine tantalum into Capacitors Manufactures Using
Miners tantalum powder and tantalum capacitors
Three companies Scrap/Recycling metal 25% of the market
account for about 85% Synthetics/slags
of the global Three companies
consumption of Leading Miners represent 85% of the
tantalum concentrate. - Paranapanema market
- Fluminense
- Kenticha
- Noventa
Care and
Maintenance Alloys
- GAM (Wodgina)
- TANCO 17% of the market Aviation Industry
High Influence:
- DRC Coltan Trade
Miners 3 Major Processors 25% Used by Capacitor Producers Multiple End Users
Source: PWC; JSI
The largest producer of niobium, CBMM, mines and processes niobium to produce a
variety of products, including ferro-niobium, nickel niobium and niobium metal.
Exhibit 16: Niobium Supply Chain
Miners and Processors Niobium Users End Users
Mining and Processing Ferro-Niobium Users
Three companies 89% of the market
supply 85% of the
market
In the last 6 years, 89%
of the global niobium
production was used to
produce ferro-niobium.
3 Major Integrated
Miners & Processors 89% Used for Ferro-Niobium Multiple End Users
Source: JSI
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CBMM sells its products to steel companies and major specialty alloy producers such as
Cabot, H.C. GmbH and Treibacher AG, which in turn sell their products to the
automotive, manufacturing and construction industries (Exhibit 16).
Tantalum is utilized in a variety of forms and is commonly sold as tantalum pentoxide
(Ta2O5), which is the initial form for the production of other tantalum compounds, such as
tantalum chloride (TaCl5), tantalum carbide (TaC) and lithium tantalite (LiTaO3).
Niobium pentoxide is usually the starting point for niobium compounds. Common
niobium compounds include niobium chloride (NbCl5), niobium carbide (NbC) and
lithium niobate (LiNbO3).
Tantalum and niobium are extensively used in the production of alloys, metal carbides,
powders and chemical compounds; they have a wide variety of applications in all major
industries. Exhibits 17 and 18 show examples of applications for tantalum and niobium
products by industry.
Exhibit 17: Tantalum Uses by Industry
Industry Usage Tantalum product
Automotive Vehicle bodies Tantalum powder
Ceramics and Ceramic capacitors, glass coatings and
Tantalum oxide and yttrium tantalate
surface coatings camera lenses
Chemical processing equipment and oil
Chemicals Tantalum metal
&gas pipelines
Cathode protection systems for large
Tantalum and niobium steel structures such as oil platforms and Tantalum metal (sheets, rods, plates and
Construction
have a wide variety of corrosion resistant fasteners (e.g. wires)
critical applications in screws, nuts and bolts)
all major industries.
Engineering Cutting tools Tantalum carbide
Capacitors, surface acoustic wave filters
Lithium tantalate, tantalum powder, tantalum
Electronics for sensor and touchscreen technologies,
ingots and tantalum nitride
hard disk drives and LED lights
Pacemakers, hearing aids and prosthetic
Medicine Tantalum metal
devices such as hip joints
Furnace parts, supperalloys for jet
Metallurgical Tantalum metal and tantalum ingots
engines and rocket engine nozzles
Missile parts, ignition systems, night
Physics vision goggles and GPS (Global Tantalum ingots and tantalum oxide
Positioning systems)
Source: BSG
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Exhibit 18: Niobium Uses by Industry
Industry Usage Niobium product
Automotive Vehicle bodies HSLA ferro-niobium (60% Nb)
Ceramics and Ceramic capacitors, glass coatings and
Niobium Oxide
surface coatings camera lenses
Chemical processing equipment and oil HSLA ferro-niobium (60% Nb), niobium
Chemicals
&gas pipelines metal and niobium-1% zirconium alloy
Architectural Steel and cathode protection HSLA ferro-niobium (60% Nb), niobium
Construction
systems for large steel structures metal
Engineering Cutting tools, railway tracks and ship hulls Niobium carbide
Capacitors, street lighting systems and
Niobium powder, niobium oxide and lithium
Electronics surface acoustic wave filters for sensor
niobate
and touch screen technologies
Superconducting magnetic coils in MRI
Medicine scanners and magneto-encephalography niobium nitride
(brain activity mapping)
Super alloys for jet engines and turbine Vaccum-grade ferro-niobium and nickel-
Metallurgical
blades niobium
Physics Particle physics research Niobium-titanium alloy and niobium-tin alloy
Source: BSG
Alloys
Tantalum alloys are usually used in applications where resistance to corrosion is
Tantalum and niobium
alloys are commonly required, such as in the manufacturing of chemical processing equipment. Further,
used in applications tantalum-ruthenium alloy is used in military applications for their oxidation resistance and
where resistance to
corrosion is required. shape memory properties, i.e. if deformed they can return to the original shape when
heated. Tantalum alloys are also used in invasive medical applications such as
Tantalum alloys are
prosthetics and pacemakers given their biocompatibility with human tissue.
used in prosthetics and
pacemakers. Niobium alloys are also used for corrosion-resistance applications and medical devices.
For example, niobium-titanium and niobium-tin alloys are used in the production of
superconducting magnets for MRIs (Magnetic Resonance Imaging) used as cancer
Niobium is most often diagnostic tool. Niobium is, however, most commonly used in the production of ferro-
used in the production
niobium, a vital component in the production of high-strength, low alloy steel for the
of ferro-niobium, a vital
component in the manufacturing of vehicles, railway tracks, pipelines, etc. Ferro-niobium increases steel
production of high- strength but it can also offer cathode protection to large steel structures like oil platforms.
strength, low alloy steel
used in the The vacuum-grade ferro and nickel niobium are used in high-temperature, high-stress
manufacturing and applications, such as aircraft and aerospace turbines. Other metals alloyed to niobium
construction industries.
include zirconium, titanium and tin.
Carbides
Tantalum and niobium carbides are extremely hard, refractory ceramics that are used in
high-stress, high-temperature applications, such as in the production of high-speed
cutting and boring tools, teeth for excavator buckets and drill bits for the mining industry.
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These carbines are also used as refractory coatings in cutting tools, nuclear reactors
and furnaces.
Powders
Tantalum powders are High-purity tantalum powder is mainly used in the production of capacitors because of
used in the
manufacturing of
the tantalum’s high capacitance coefficient. Although the amount of tantalum in each
capacitors, which capacitor is small, this is a major tantalum application accounting for more than 20% of
account for more than the total tantalum market. Billions of capacitors are used in cellphones, computers and in
20% of the total
tantalum market. many other applications. For example, cellphones with camera and video functions have
22–23 tantalum capacitors, and last year 417 million new cellphones were produced.
Niobium powders are also used to produce capacitors, but they are usually larger in size
and less efficient.
Chemicals
Tantalum nitrite is used Tantalum and niobium chemicals have been increasingly used in electronics, medical
in LEDs and solar applications, optics and in spluttered film in integrated circuitry. Tantalum and niobium in
panels, and niobium
nitrite is a key
the oxide form are usually used in the manufacture of specialty glass and ceramics for
component of capacitors. Lithium tantalite and lithium niobate have unique optical, piezo- and pyro-
superconducting electric properties and are extensively used in electronic applications. Tantalum nitrite is
magnets for MRIs.
used in light emitting diodes (LED), solar cells and transistors, and niobium nitrite is a
key component of superconducting magnets for MRIs.
Exhibits 19 and 20 compare the end-uses of tantalum and niobium in 2004 and 2010,
according to Tantalum-Niobium International Study Centre (TIC).
Capacitor-grade tantalum still accounts for most of the production; however, contrary to
what some believe, the amount is far below 50%. The study suggests that between 2004
and 2010, there has been a significant increase in usage of tantalum for the production
of ingots, metal products and metallurgical grade powder.
Approximately 89% of the global niobium production is used to produce ferro-niobium,
and according to TIC, this situation has been about the same for the last six years
despite the significant increase in niobium production and demand. The remaining 11%
is used to produce niobium alloys, metals, high-purity ferro-niobium and niobium
chemicals and carbides. Based on the TIC study, production of niobium metal products
and high-purity ferro-niobium has decreased relative to all the other products.
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