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Posts tagged ‘mozambique’

Conflict-free tantalum

March 24th, 2013

End-users can help real miners develop legitimate sources of this crucial metal

by Michael Kachanovsky

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Tantalum is not well-known. Rarely mentioned in financial news, the metal is often traded in opaque transactions between processors and end-users. Its worldwide production is a fraction of the output for more common metals like aluminum and copper.

Tantalum demand has been estimated between six and seven million pounds per year, a tiny market indeed. But do not assume that tantalum is unimportant, as it plays a significant role in nearly all high-end electronics. The metal is irreplaceable. It cannot be substituted with other, more commonly available elements or alloys without losing qualities in the finished components.

Conflict-free tantalum

Although not a well-known commodity, tantalum has wide-ranging applications that suggest end-users will take steps to secure
their future supply.

Tantalum production can’t keep pace even with current demand. Meanwhile new products require additional supply. End-users are acutely aware of this shortfall. Since Australia’s Wodgina mine closed in 2012, a major source of tantalum production was lost and spot prices have risen steadily. Wodgina accounted for about 1.4 million pounds per year. Now Australia produces just a few thousand pounds a year.

Brazil remains a dominant tantalum source, with several operating mines. About a quarter of historic world supply originated from the country. The Mibra mine, operated by Companhia Industrial Fluminense, is the country’s largest tantalum producer. But even this mine was limited to processing tailings during recent months while expansion plans were underway to increase open pit production. Mibra is expected to produce about 400,000 pounds tantalum per year, still a relatively small amount of the world’s total projected demand.

Ethiopia was once a significant producer. The Kenticha mine is considered to have one of the world’s largest tantalum resources. But production has been suspended due to contamination from uranium, which caused problems with radioactivity during transport. In 2012 Ethiopian exports were halted and the country is considering new processing capacity to deal with the problem. However Elinito, a significant mine developer with other African assets, recently offered to invest in a processing plant to restart Kenticha’s production. The plant would use a hydrometallurgical circuit to remove uranium, yielding a high-purity tantalum-niobium concentrate. For the immediate future, however, this is still on the drawing board, pending government approval and development of the processing plant.

Mozambique has also been a significant tantalum exporter. Here too, production shortfalls have limited output in recent years. The Marropino mine is the country’s largest producer, operated by the Noventa Group. The company has reported a string of operational problems including severe weather, processing plant shutdowns and unreliable electrical supply, all of which cut production sharply. Mine output has fallen from more than 5,300 pounds to just 1,600 pounds in 2012 and early 2013. While the company states that it aspires to increase future tantalum production, the situation in Mozambique is not unique. It illustrates tantalum’s tenuous supply outlook.

With few legitimate sources for tantalum production, much of the world’s supply comes from conflict minerals. They are delivered by small-scale artisanal output that is smuggled across borders to be sold from neutral countries. For example, in the Democratic Republic of the Congo, rebel groups control large parts of the country. They have imposed dictatorial rule on local communities and generated small-scale mine production under conditions so harsh that they actually approach slavery. High-value minerals and diamonds, including tantalum concentrate, are smuggled into neighbouring countries like Rwanda and sold to finance the rebels’ activities. Since there are no producing tantalum mines in Rwanda, it is likely that much of the country’s output comes from DRC conflict sources. One could make the same assumption for several other nearby countries.

The human and environmental toll of mining and smuggling conflict minerals presents a crisis. However, in an age when money is often the only consideration, this human rights abuse is often ignored. The proportion of this shadow tantalum inventory in total world supply is difficult to estimate.

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Week in review

January 25th, 2013

A mining and exploration retrospect for January 19 to 25, 2013

by Greg Klein

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Canadian company’s employees still held hostage in Colombia

Kidnappers continue to hold five workers abducted from Braeval Mining’s TSX:BVL Snow Mine project in Colombia. According to a Thursday story in Colombia Reports, two Colombian hostages are being held separately from two Peruvians and a Canadian. The government has offered a cash reward while the army said it has 2,700 soldiers searching for the victims.

A Monday Colombia Reports article said soldiers had arrested three of the 20 to 25 kidnappers. The story gave the victims’ names as Canadian Jernoc Wobert, Peruvians Jose Manami and Javier Ochoa, and Colombians William Batista and Manuel Francisco Zabaleta.

Rebels abducted them on January 18 in northern Colombia’s Bolivar department. Among grievances cited by the kidnappers, the National Liberation Army (ELN) listed unequal distribution of mining rights, stated Colombia Reports.

Most Mali operations safe so far

A mining and exploration retrospect

“If you are still in Mali, you should leave immediately,” Canada’s Foreign Affairs department warned on Sunday. But Tuesday’s Toronto Star reported that work continues in most of southwestern Mali’s mining operations while French-led forces battle rebels hundreds of kilometres away. Over 15 Canadian exploration and mining companies operate in the country although some, especially in the northeast, have suspended work.

Endeavour Mining TSX:EDV Neil Woodyer described the turmoil as “part of the nature of the beast, as far as we’re concerned, being miners.” But his company’s properties, like most of Mali’s advanced-stage projects and operating mines, are in the southwest.

Mali is Africa’s third-largest gold-mining country, the Star reported. According to a 2008 estimate cited by the CBC, about 17% of the country’s government revenue comes from gold mining.

BCSC finds sloppy disclosures an ongoing problem

NI 43-101 regulations govern not only news releases and technical reports but also company Web sites, speeches, corporate presentations and other communications considered to be voluntary disclosures. But that fact sometimes slips the minds of company officials.

Of a sample of companies reviewed by the British Columbia Securities Commission between 2009 and 2012, only half met 43-101 standards in their voluntary disclosures. According to the BCSC 2012 Mining Report released Thursday, the problem is especially apparent when reporting PEA results, historic estimates, quality control, lab procedures and identifying the qualified person who takes responsibility for the information.

Yet compliance in non-voluntary disclosures is hardly reassuring. Only 65% of companies made the 43-101 grade. PEAs were especially problematic, flunking out in more than half of all cases for both voluntary and compulsory disclosures. A lack of cautionary language was the most frequent reason.

Non-compliant data verification, resource and reserve estimates, pre‐feas and feasibility studies also raised concerns. A common problem with resource estimates was totalling all categories instead of segregating the inferred numbers.

Among other monitoring activities, the commission targeted 82 companies between February 2011 and September 2012 that were selected because of “poor disclosure we observe in e-mail blasts, news releases and paid promotions on industry‐related Web sites,” the report stated.

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