Tantalum Ore Supply Tightens with Wodgina’s Low Output and U.S. New Law

Tantalum ore supply maintains tight against steady demand for tantalum capacitors. International ore spot price is currently US$ 120 per pound of tantalum pentoxide, staying at three-time high level of a year earlier. One background is that ore output volume is likely to represent small from Wodgina, a resuming tantalum mine in Western Australia. Another factor is U.S. new law to regulate use of conflict minerals.

Global Advanced Metals, Australian mining company, announced in January the firm resumes operation of Wodgina tantalum mine. The firm has suspended the operation since December 2008 due to world economic deterioration but determined the resumption along recent tantalum market price improvement. The production is scheduled to start in June or July 2011. Wodgina is the world largest tantalum mine which represents 30% in world total output.

Despite of this announcement, current ore price maintains high. The reason is that Wodgina’s production is planned at around 300 tonnes per year, only a half volume against its capacity. Japanese major rare metal trader points out Wodgina’s output plan is too small against global demand size at 2,000-2,500 tonnes, which suggests the mine owner’s intention to control supply volume in order to prevent market price dropdown.

Meanwhile, in the U.S.A., Financial Regulatory Reform Act was legislated in July 2010. This new law contains an article to oblige application of origin certificate for tantalum or tin using products to Security & Exchange Commission. Then tantalum users are regulating consumption of materials supplied from conflict countries such as Congo. As a result, material supply maintains tight.