September 29, 2015 | The commodities crash has not hit all juniors equally, and at least one Australian stock has seen a strong share price increase in 2015. … Read MoreGet Tantalum Stock Investor Kits
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Widely used in capacitors for computers and mobile phones, tantalum is certainly an important component in many modern technologies.
About two-thirds of tantalum is used to construct electronic capacitors, a fundamental component in cellphones and other electronics. Tantalum’s use has contributed hugely to the miniaturization of hand held electronic devices, since tantalum allows for the storage of electricity in small capacitors.
As one of the five major refractory metals, tantalum is also highly resistant to heat and wear, and has an extremely high melting point. It is also extremely ductile and can be drawn into a thin wire. Because it causes no immune response in humans, it is also used in the making of surgical appliances, as a replacement for bone, as a connector of torn nerves or a binding agent for muscles.
Certainly, there are plenty of uses for tantalum, and as a result, the metal is highly sought after. Tantalum ores are found in parts of central Africa, as well as in Australia, Canada and Brazil. It is extremely rare, averaging only 2 parts per million in the earth’s crust.
A large portion of the world’s tantalum is produced in the Democratic Republic of Congo (DRC), and as such, the metal is the subject of plenty of controversy with regards to conflict minerals.
The US Securities and Exchange Commission (SEC) implemented a conflict minerals rule as part of the Dodd-Frank act, requiring publicly traded manufacturers to disclose to investors whether any of the tantalum, tin, gold and tungsten used in their products may have originated from the conflict-ridden Democratic Republic of the Congo (DRC).
Companies have fought hard against the new rule, and only five percent of businesses filed reports tracing the conflict status of materials used in their products, according to a report from PricewaterhouseCoopers.
Still, the European Parliment has followed suit, enacting its own conflict minerals rule in May 2015. The decision still has to be discussed with EU member states and the European Commission before the new regulations are put in place.
The top tantalum producing country for 2014 was Rwanda, which put out 250 tons of the metal, followed by the DRC with 180 tons. Other countries on the list included Brazil (98 tons), Mozambique (85 tons), China (60 tons) and Nigeria (60 tons). The US has not produced tantalum since 1959, according to the United States Geological Survey.
The market for tantalum is extremely small, and the critical metal is not traded on commodities exchanges. However, investors may gain exposure to tantalum by investing in tantalum mining companies.
There are some junior exploration and development companies looking to move ahead with tantalum projects in North America. Critical Elements (TSXV:CRE) holds the Rose tantalum-lithium project located in Quebec’s James Bay region, while Commerce Resources (TSXV:CCE) holds the Blue River Tantalum and Niobium Deposit in British Columbia.
Elsewhere in the world, Pilbara Minerals (ASX:PLS) is moving ahead with its Tabba Tabba and Pilgangoora tantalum-lithium projects in Western Australia, while another Aussie company, Gippsland (ASX:GIP), is looking to start production at its Abu Dabbab tantalum-tin-feldspar project in Egypt by 2016.
With the importance of tantalum in everything from laptops to iphones, savvy investors may want to take a closer look at the critical metal.