Tantalum Supply Dwindles, Prices Expected to Spike

Global supplies of tantalum are running low, and that could cause a steep spike in prices and significant disruptions in supply chains over the remainder of this year, according to an article from earlier this week in the International Business Times.

Tantalum a rare earth metal that is used in a wide variety of products, ranging from bone implants and camera lenses to iPhones and laptop computers is in short supply mostly because there aren't many suppliers. A major tantalum mine located in Australia stopped production in 2008 when the price of most commodities collapsed, and production from other suppliers has not filled the void.

As it stands now, the US imports all of its tantalum. However, in the article, Dennis Zogbi, CEO of Paumanok Publications, which does extensive research on the component industry and the tantalum markets, says tantalum could be found in North Carolina and Alabama if the federal government would open up exploitation of mining tailings in these areas. (See this earlier post for a discussion of legislation that has been introduced to address what appears to be a looming rare earths crisis that will affect the supply of tantalum and other essential rare earth raw materials.)

The US Geological Survey estimates the price of tantalite, from which tantalum is extracted, increased from $35 per pound in 2005 to $42 per pound in 2009. Another expert cited in the article says the prices out of Brazil are now at $80 per pound, and that buyers should brace for potentially another 50 percent increase in prices across the board in 2011.