There is concern among market participants about reputational damage surrounding the tantalite supply sourced from Democratic Republic of Congo (DRC) and Rwanda.
“There is no doubt there are supply chain challenges and the industry is actively looking at its options,” Ian Margerison told Fastmarkets recently. “There are schemes there to support miners but the perception is often worse than the reality.”
Tantalite is the primary mineral source of the element tantalum, as well as a source of niobium.
Tantalite is sought after for its highly efficient conductivity and high melting point, with material primarily processed in China for use in the electronics sector.
The largest auditing, due diligence and traceability system for tantalite currently in operation in Central Africa is the International Tin Supply Chain Initiative (ITSCI), which has worked with TIC.
“From 2010 to 2024, ITSCi tantalum and tin supply has imposed the most rigorous compliance on DRC and its neighbors,” Margerison said. “Compliance has allowed Central African tantalite to exceed 50% of the entire world supply, which is a tremendous success for the millions of people who depend on mining in these countries.”
Conflict within the DRC has hindered production and meant the auditing of tantalite has become highly complicated.
“ITSCI works in a difficult part of the world where it is very challenging to get material out legitimately” he said. “It is down to the government to really get a handle on it.”
But without the DRC government managing to calm unrest it has meant ITSCI’s work has had to be halted in some parts of the country.
“ITSCI has had to stop operating in parts of the DRC where there is smuggling. It is at the maximum [level of difficulty] it can be expected to operate at,” Margerison said.
Margerison believes the industry has been unusually open about the reputational risk it potentially faces and this openness has left it exposed.
“People in the tantalum industry are talking about the situation and regulations – and information is coming out about supply from Central Africa,” he said. “Other industries don’t have this same openness, which means that concern about reputational risk can be self-fulfilling.”
And Margerison stated the tantalum industry has implemented very comprehensive compliance to protect the reputation of the industry. But this process has not been perfect and some issues have arisen.
“There have been problems, some created by the compliance itself, some related to the difficulty of the environments in which these programs operate, some due to the staffing of African compliance programs,” he said.
But in response to these issues emerging, some consumers have sought to withdraw from tantalite rather than seeking any solutions.
“Now, it seems end industries require perfection of the African supply chain instead of containing errors to a reasonable level, while working on continuous improvement,” Margerison said.
Support for suppliers
“We should not walk away from the governance issues in Africa, no matter what the governance issues may be,” Margerison said.
Instead of moving out of tantalite, TIC calls for consumers to show understanding and support for the auditing systems in place rather than rejecting material sourced from Central Africa.
“If possible, we would like to improve and increase transparency and have workable requirements that absolutely exclude any sources that truly finance conflict and smuggling,” Margerison said. “Premature bans make the victims of conflict the victims of our international community by taking away their livelihood as well.”
The process of effective compliance implied in artisanal production carries costs in addition to those required in production.
And these additional costs could place material from DRC, for example, at a price disadvantage in a competitive marketplace.
“We need to ensure that compliance in Central Africa does not become an issue for competitive advantage by supply regions that are more sophisticated than the many small African supply sources in Central Africa,” Margerison said.
Artisanal miners in Central Africa have the capacity to ramp up their tantalite production or move to another source of income according to market conditions.
“Africa has the flexibility to tap in and out of production almost instantly and some of the best quality deposits,” Margerison said.
This capacity to switch into production in response to market fundamentals means Central Africa currently has a pivotal role in the market despite the issues taking place there.
“Material from Central Africa is not going away, instead it is an issue of the market adapting to the situation,” Margerison said.
Western Australia
Lithium was anticipated to hold the key to the future of tantalite supply, with mines in Western Australia producing tantalite as a by-product.
“The tie in between lithium and tantalite is another interesting area for future production,” Margerison said. “Supply will come off the back of the lithium developments in Western Australia.”
But a sharp fall in lithium prices since 2022 has dampened the appetite for more projects to be launched into a market that is already over-supplied.
Adverse price conditions meant Australian lithium producer Pilbara Minerals will place its Ngungaju plant on care and maintenance from December 2024, the company recently announced.
A recovery in lithium prices could well trigger the Australian lithium industry back into life. But this would also not be without risks for the tantalite market.
“Tantalum knows the pitfalls of running an industry as a side product of another mineral,” Margerison said. “The tantalum industry supply will be dependent on an unrelated field and will be powerless to set its own supply requirements.”
Should production be ramped up from Western Australia, it would then need to be exported to be smelted.
“The situation in terms of smelting in Western Australia looks challenging at the moment but we are now beginning to see interest in developments,” Margerison said. “There is definitely room for [miners in Western Australia] to develop in this area but it will come down to the companies’ cost model.”
China has the lion’s share of global smelting capacity.
“There are only a few smelters in Europe and the US, while Russian material is not on the table,” Margerison said. “I can see Brazil making ingots and oxides – they make the oxides now for export.”
Fastmarkets weekly price assessment of tantalite, basis 25% min Ta2O5, cif China, was $78.00-84.00 per lb Ta2O5 on October 25.
Other sources of tantalite
Aside from Central Africa and Australia, there are other sources of tantalite, such as Ethiopia, Brazil and Nigeria.
“The tantalum industry is keen to increase all ethical supplies of tantalum raw material, including as a by-product of lithium,” Margerison said. “Our industry is keen to implement and improve the effectiveness of as many programs as may be possible to support supply for the industry.”
As part of this mission TIC wants to increase acceptance of material from Ethiopia.
“The TIC is advocating to raise the levels of [Hazard] Class 7 levels to allow transportation of material with higher radioactivity,” Margerison said.
Engineering out
Concern about securing supply without reputational risk has led some market participants to anticipate some end users will engineer out of the material.
But Margerison doubted whether this would be practical in some applications.
“While it is expensive, it does have real benefits that are difficult to get away from,” he said.
“Tantalum is used in the first designs of new mobile phones, when they are at their most expensive. If it is not used then it will never be used in phones,” he continued. “It also has major advantages over MLCC (multi-layer ceramic capacitors) for pacemakers and defibrillators as it can form shapes and provides high energy density.”