 PERTH (miningweekly.com) – New US legislation regarding “conflict minerals” from the Democratic Republic of Congo (DRC) is likely to push up the price of tantalum oxide as it could lead to a supply squeeze, Africa-focused Globe Metals & Mining said on Monday.
The Financial Stability Act, which was signed into law on July 21, would require American companies to submit an annual report to the Securities & Exchange Commission disclosing whether their products contain tantalum, tin, tungsten or gold sourced from the DRC or adjoining countries.
Globe Metals & Mining, which owns the Kanyika project in Malawi, said that the new Act would have “major” implications for tantalum supply and prices, as the DRC supplied about 15% of global supply.
It also pointed out that about 40% of the world’s raw material production were either closed or placed on semipermanent care-and-maintenance during the global financial crisis.
Globe Metals & Mining said that major consumer electronics brands might not source tantalum from the DRC, given the heightened interest in the issue and the onerous supply chain auditing obligations on reporting entities.
The company said that the increasing price of tantalum oxide improved the economics of the Kanyika project, as tantalum represented 15% to 23% of the revenues from the project, in addition to ferro-niobium and uranium.
Tantalum oxide is currently priced between $220/kg and $230/kg, which was “substantially higher” than the price used in Globe Metals & Mining’s existing financial forecast of $143/kg.
The annual tantalum oxide production from Kanyika is expected to reach around 192 t, as a by-product of the ferroniobium production.
“Globe is well positioned to become a reliable, volume and ethical supplier of quality tantalum products with the start of production from the Kanyika project in 2013,” the miner said.
Globe Metals & Mining noted that the US legislation viewed adjoining countries as those that actually adjoined the DRC, being Uganda, Rwanda, Burundi, Tanzania, Zambia, Angola, Republic of Congo, Sudan and Central Africa Republic.
Malawi is therefore outside the scope of the Act.
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