The pattern of tantalum supply is expected to change rapidly and dramatically. In 2017, Africa accounted for 59% of mine supply, with South America adding a further 18% and Australia a mere 3%. Supply of by-product tantalum from lithium mining is Australia is starting to kick in and by 2022 the country’s output could have increased tenfold, talking its share of the total to 20%. In Brazil, the Mibra operation has been rebuilt following the fire in early 2017 and the move into lithium production could result is a substantial increase in by/co-product tantalum production.
The Pitinga mine in Brazil is also expanding, and small-scale production in the region is growing. By 2023, supply from South America could double, increasing its share of the global total to 30%. With large quantities of traceable tantalum entering the market, the importance of Central Africa is expected to diminish and the continent’s share of world production is likely to fall below 40% in the early 2020s. The decision by the DRC government to increase royalties to 10% has not made Central African tantalum any more attractive to the international market, increasing prices and serving to encourage smuggling of DRC tantalum via neighbouring countries. Despite the anticipated fall in production from Central Africa, it seems likely that the tantalum market will move from a small deficit in 2018 to surplus in 2019 and beyond.
Roskill expects that demand for tantalum will grow at a rate of 4-5%py over the forecast period. Capacitors are, and are expected to remain, the largest single market but increasing functionality of smartphones, and ongoing reductions in capacitor size, are the principal limitations to growth. Shipments of smartphones themselves are expected to rise by 3%py through to 2027. Demand for tantalum in superalloys is likely to have an above-average rate of growth (7%py), largely because of a healthy outlook for the commercial aerospace sector. Sputtering targets, tantalum chemicals and mill products have a wide range of final applications and this diversity provides a measure of protection from swings in individual end-use markets. Demand in these segments is also expected to display above average growth. The use of tantalum in carbides is forecast to decline slowly over the coming years however, falling by 1%py.
Tantalum is a small industry and has historically been susceptible to rapid changes in market balance with volatile price movements. A production outage at just one operation can have a major effect, as can unforeseen upticks in downstream demand that catch processors off-guard and holding little inventory. A combination of such events in 2017 saw tantalum concentrate prices jump from little more than US$50/lb Ta2O5 at the start of the year to nearly US$90/lb Ta2O5 by year-end. Prices remain over US$100/lb Ta2O5 in mid-2018 although the sharp increases appear to have stopped. The impending surge of lithium by-product material is expected to have a moderating effect on future prices, though other factors may cause uncertainty.