tantalite report

73Ta

Tantalum

CIF Mineraçao • Gippsland Globe Metals and Mining MDN • Ram Resources

Shamika Resources

Established 1835

A supplement to Mining Journal

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September 2010Mining Journal special publication – Tantalum

INTRODUCTION

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BY ULRIC SCHWELA

Region Mlb Ta2O5 %South America 285 41Australia 145 21China & SE Asia 73 10Russia & Middle East 69 10Central Africa 63 9Other Africa 47 7North America 12 2Europe 5 1Total 698

TANTALUM resources are found in every continent, but there are various ways of looking at the relative abundance. This is due to variations in how much effort has been put into

exploration. For example, artisanal miners in central Africa will not concern themselves with assessing their resources, whereas the vast areas of Canada and Russia have simply not been fully explored.

Richard Burt, the current president of the Tantalum-Niobium International Study Center (TIC), noted in a recent paper that the purist view (which only considers known resources) would have Australia and Africa in 2nd and 3rd places, respectively, with 27% and 12% of the world total.

However, if a swathe of potential resources are included, 2nd and 3rd places would be taken by Russia and the Middle East (at 21% each), with Australia back in 4th place on 17% of the total.

Mr Burt balances the relative values of these various types of deposit (inferred and known) to arrive at a ‘Most likely resource base’ ranking.

Whichever model is taken, there is only one continent which always fills the top spot: South America, with 32-44% of the resource share. Most of this is due to Brazil. The distribution according to the ‘Most likely resource base’ is shown in the table below.

ESTABLISHED MINERSThe single largest operating tantalum mine is the Mibra operation of Companhia Industrial Fluminense Mineraçâo SA (part of the AMG Group).

This mine in Minas Gerais, Brazil, has recently

expanded capacity to produce an annual 300,000lb Ta2O5, which equates to approximately 20% of the currently low global primary production (at the 2007-2008 levels the Mibra mine accounted for 5-10% of global primary production). A further expansion to 500,000lb/y Ta2O5 is planned for late 2011.

The next most important operating mines are the Kenticha mine in Ethiopia (operated by Ethiopia Mineral Development Enterprise), the Lovozero mine in Russia (operated by LGOK, part of the Solikamsk Magnesium Works group), the Yichun mine in China (state owned), the Pitinga mine in Brazil (operated by Mineração Taboca, part of the Minsur group) and the Marropino mine in Mozambique (operated by Noventa).

Additional quantities are available from Brazil, the DRC, Nigeria and Rwanda, mostly from the mining of small alluvial and soft-rock deposits by artisanal miners.

In Malaysia and Thailand, the tin industry still provides tantalum at 2-8% Ta2O5 as part of the by-product tin slag from the smelting of cassiterite ore concentrates for tin production. Struverite concentrates (a Ti-Nb-Ta mineral) have historically also been available from northern Malaysia, containing 9-12% Ta2O5.

Scrap recycling generated from all the segments of the tantalum industry accounts for about 20% of the total input each year.

The global supply has historically looked as shown in the table below.

Source %Primary concentrates 60Secondary concentrates 10Tin slag 10Other* 20*Scrap recycling, synthetic concentrates

PRODUCTION STATISTICS2008 turned out to be a record year as the global economic crisis hit the tantalum industry a little later than most industries, only making itself felt in the fourth quarter of that year.

The recession pushed three large tantalum mines out of the market as demand dropped off; Wodgina closed in December 2008, and Tanco and Marropino in April 2009. The operating companies subsequently resigned from the TIC; Talison in February 2009, Cabot in October 2008 and Noventa in January 2010).

Starting from a low point, the second half of 2009 showed a renewed growth in demand. Of these three mines, only one (Marropino) tentatively returned to production (in April 2010).

As Tanco and Wodgina do not appear to be in a position to return to production, the demand has had to be satisfied from elsewhere. As a result, production from Brazil (Mibra) and Ethiopia (Kenticha) has been stepped up, yet demand continues to outpace production.

The Mibra operation (the Volta Grande mine in Minas Gerais) is owned by CIF Mineraçâo SA.

This demand for tantalum has to some extent been buffered by the large stocks held by processors which are believed to amount to as much as two years’ production, a legacy of the long-term contracts from previous years.

The following three tables contain rounded figures based on the detailed data collected from TIC member companies, and are considered to cover the majority in terms of quantity.

The state of tantalum mining

The above table thus shows where the potential for tantalum mining lies. However, currently-producing countries are limited to Brazil, Malaysia, Thailand, Russia, the Democratic Republic of Congo (DRC), Rwanda, Ethiopia, Mozambique and Nigeria.

expanded capacity to produce an annual 300,000lb , which equates to approximately 20% of the

currently low global primary production (at the 2007-2008 levels the Mibra mine accounted for 5-10% of global primary production). A further expansion to

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Mining Journal special publication – TantalumSeptember 2010 3

INTRODUCTION

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TRANSPARENCY AND TRACEABILITYIt is in the interest of the tantalum industry to maintain a stable and reliable supply of raw materials in order that this high technology market can continue to grow with confidence.

The TIC supports the industry as a whole, taking instruction from the executive committee composed of twelve volunteers from a broad cross-section of the industry including mining, trading, processing/refining, electronics manufacture and metal recycling.

Where necessary, the committee’s actions are subsequently endorsed by a vote at the annual General Assembly. As a voice for the entire industry, the TIC can not support the individual views of a minority of members, it is duty bound to follow the wishes of the majority.

Central Africa (chiefly DRC and Rwanda) and Nigeria were a very minor source in the mid-2000s. However, renewed interest in this area (not least because of the passage of legislation recently in the US) highlighted the need to implement a system of traceable supply due to the association of the conflict in the DRC with the supply of raw materials.

For a decade, the TIC has stated its commitment to, and our members’ requirement of, ‘lawful and ethical trade practices’. However, by 2008 this position was felt to be insufficient, and the TIC set up the Working Group on Tantalum and Niobium Mining (WGTNM) in January 2009 to study how best to achieve a transparent and traceable supply chain which would simultaneously support and promote the legitimate activities of the artisanal miners that make up the bulk of mining production in developing countries.

To this end, the TIC engaged pro-actively with the Electronics Industry Citizenship Coalition (EICC), Global eSustainability Initiative (GeSI), International Tin Research Institute (ITRI) and the Organisation for Economic Co-operation and Development (OECD) during the course of 2009 to investigate how best to move forward.

At the TIC General Assembly, held in October 2009, the membership ratified a general policy (which can be

viewed in full at www.tanb.org/wg). It states in part that the TIC: “supports the recommendations of the report issued by the UN Panel of Experts in 2008, that disengagement is not the answer, rather a comprehensive approach that requires members to work to a code of full, documented and audited traceability and transparency throughout the supply chain.

“The TIC condemns any activities that have the effect of routing mineral revenues to UN sanctioned groups; the Policy therefore accepts the requirement to identify ‘legitimate’ mines, and the need to work with the host governments to improve governance that will ensure artisanal mining can be performed in conditions of freedom, equality, safety and human dignity.”

The TIC concluded, with endorsement by the EICC/GeSI, that the only constructive way forward was to support the ITRI traceability scheme (iTSCi), which had started in July 2009. In February 2010, WGTNM agreed to support the financing of the iTSCi scheme, which was just then entering its second phase, ie moving from establishing a paper trail to also sealing and tracking the tin and tantalum raw materials in a few pilot project locations.

While much progress has been made, there is still much to do before the third phase of iTSCi can be implemented, including full auditing of the actors in the supply chain.

Given the concerns over the supply from central Africa it is important that all tantalum raw materials can be traced transparently to their source so that they can be shown to be conflict-free.

The stakeholders in the central African supply chain, the industry and trade associations, the civil societies and intergovernmental organisations, are all agreed that disengagement and blanket embargoes are not a solution but would only contribute to putting people out of work or leaving an uncontrolled illicit trade in the hands of the least scrupulous.

The only way to solve the existing problems is the hard way: to engage constructively with all the

2005 2006 2007 2008 2,009Ta concentrate 3,000 1,700 2,100 2,100 500Other concentrates* 220 380 440 470 430Tin slag 500 480 350 490 390Total 3,720 2,560 2,890 3,060 1,320*Columbite, struverite

TANTALUM PRIMARY PRODUCTION (’000lb Ta2O5 contained)

2005 2006 2007 2008 2009Primary raw materials* 4,200 4,200 3,400 4,300 2,800Secondary materials (Ta2O5, K2TaF7, scrap) 1,200 900 1,500 1,900 1,800Total 5,300 5,100 4,900 6,200 4,600 *Tantalite, columbite, struverite, tin slag, synthetic concentrates

TANTALUM PROCESSORS’ RECEIPTS (’000lb Ta2O5 contained)

2005 2006 2007 2008 2009Chemicals (Ta2O5, TaCl5, K2TaF7) 660 860 1,100 1,500 1,100Capacitor-grade tantalum powder 1,900 2,100 2,000 2,000 1,000Mill products of tantalum 770 1,100 1,300 1,300 790Tantalum ingot 300 380 250 510 320Tantalum carbide 400 390 350 400 230Other* 570 750 730 740 840Total 4,600 5,580 5,730 6,450 4,280*Metallurgical-grade powder, unwrought metal, scrap, other

TANTALUM PROCESSORS’ SHIPMENTS (’000lb Ta2O5 contained)

One of the denser natural elements, tantalum is related to niobium and vanadium, and shares many of niobium’s chemical and physical characteristics. Discovered in Sweden over 200 years ago, tantalum was not isolated until 1820, and then only as an impure metal.

It was not until 1905 that a pure metal suitable for working was achieved. Its strengths are a high electrical capacitance, a high melting point and excellent resistance to chemical attack.

More than 130 species of tantalum/niobium minerals exist, although only some (tantalite, microlite, wodginite, euxenite and polycrase) are used by the tantalum industry as raw materials. Tantalite, in the form of (Fe,Mn)(Ta,Nb)2O6, is the most important mineral for tantalum extraction.

About half of the tantalum consumed each year is used in the electronics industry, mainly as powder and wire for capacitors, owing to tantalum’s particular ability to store and release electrical energy. This allows components to be exceptionally small. They are therefore favoured in space-sensitive, high-end applications in telecommunications, data storage and implantable medical devices.

Tantalum is also used for electronic sound filters and as a barrier against copper diffusion in semi-conductors. Tantalum carbide’s hardness makes it ideal for cutting tools.

Tantalum is highly biocompatible. Its low mechanical strength means it is generally used as a coating on stronger substrates, such as stainless steel. Applications range from stents supporting blood vessels to plates, bone replacements, suture clips and wire.

Tantalum also goes into the manufacture of superalloys, imparting strength and high-temperature resistance against cracking, for use in aerospace and energy generation. The use of noble metals in the aircraft industry is assured for the foreseeable future as they cannot easily be substituted once they are engineered and tested in to the designs. Its corrosion resistance makes tantalum useful in the chemical industry, generally as a lining to pipes, tanks and vessels. Tantalum oxide increases the refractive index in lens glasses. ■ Tantalum carbide: Cutting tools.■ Tantalum oxide: Camera lenses, X-ray film, ink jet printers.■ Tantalum powder: Tantalum capacitors for electronic circuits in medical appliances (such as hearing aids, pacemakers, also in airbag protection systems, ignition and motor control modules, GPS, ABS systems in automobiles, laptop computers, cellular phones and digital cameras). ■ Tantalum fabricated sheets, plates, rods, wires: Sputtering targets, chemical process equipment, cathodic protection systems (for steel structures), prosthetic devices for humans (hips, plates in the skull etc) and suture clips. Also corrosion-resistant fasteners, screws, nuts and bolts, and high-temperature furnace parts and alloys (eg turbines).

TANTALUM HISTORY

USES

continued on page 5



INTRODUCTION

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Commerce Resources continues drilling on its Upper Fir deposit near Blue River in British Columbia, Canada, and a technical report was produced in March 2010.

The company is also exploring a new deposit at Eldor in Quebec, where drilling commenced in August 2010.

Also in Quebec, Crevier Minerals is working on the eponymous Ta-Nb deposit near Girardville, with a feasibility study expected for the first quarter next year. Crevier is owned 67.5% by MDN Inc and 32.5% by Iamgold.

In Malawi, Globe Metals and Mining is developing a primarily niobium deposit at Kanyika with a tantalum by-product, with production scheduled to commence in 2013.

Shamika Resources is promoting the outstanding

resources of the DRC in compliance with international and local regulations, and has recently increased the number of mining licences it holds in the country.

Tertiary Minerals is waiting to resolve licence issues before continuing exploration of the Ghurayyah deposit in western Saudi Arabia.

In Egypt, Gippsland Ltd is focused on development of its tantalum and tin deposits in the Central Eastern Desert area, adjacent to the western shore of the Red Sea. These projects include the Abu Dabbab and Nuweibi deposits.

In Greenland, Ram Resources has entered into an agreement to acquire the Motzfeldt polymetallic deposit, which, the company claims, has the potential to become a world-class bulk-tonnage tantalum-niobium deposit.

EXPLORATION EFFORT

Category 2005 2006 2007 2008 2009Tantalum powder 1,400 1,500 1,400 1,700 1,100Tantalum wire 220 270 260 330 250Mill products (except wire) 0 0.2 3.4 6.0 1.5Total 1,620 1,770 1,663 2,036 1,352

TANTALUM CAPACITOR PRODUCERS’ RECEIPTS (’000lb Ta contained)

The extraction and refining of tantalum, including the separation from niobium in these various tantalum-containing mineral concentrates, is generally done by treating the ores with a mixture of hydrofluoric and sulphuric acids at elevated temperatures.

This causes the tantalum and niobium values to dissolve as complex fluorides, and numerous impurities that were present also dissolve. Other elements such as silicon, iron, manganese, titanium, zirconium, uranium, thorium, rare earths, etc are generally present.

The filtration of the digestion slurry, and further processing via solvent extraction using methyl isobutyl ketone (MIBK) or liquid ion exchange using an amine

extractant in kerosene, produces highly-purified solutions of tantalum and niobium.

Generally, the tantalum values in solution are converted into potassium tantalum fluoride (K2TaF7) or tantalum oxide (Ta2O5). The niobium is recovered as niobium oxide (Nb2O5) by neutralising the niobium fluoride complex with ammonia to form the hydroxide, followed by calcination to the oxide. The primary chemicals of industrial significance, in addition to K2TaF7 and Ta7 and Ta7 2O5, are tantalum carbide (TaC), tantalum chloride (TaCl5), and lithium tantalate (LiTaO3).

Tantalum metal powder is generally produced by the sodium reduction of the potassium tantalum fluoride in a molten salt system at high temperature.

The metal can also be produced by the carbon or aluminium reduction of the oxide or the hydrogen or alkaline earth reduction of tantalum chloride.

Capacitor-grade powder is produced by the sodium reduction of potassium tantalum fluoride. The choice of process is based on the application and whether the resultant tantalum will be further consolidated by processing into ingot, sheet, rod, tubing, wire, and other fabricated articles.

Capacitor-grade tantalum powder provides about 60% of the market of all tantalum shipments. Additional quantities are used in tantalum wire for the anode lead as well as for heating elements, shielding, and sintering tray assemblies in anode sintering furnaces.

EXTRACTION AND REFINING

Established in November 2006, the International Steering Committee on Delay and Denial of Shipment (ISC) has gathered explanatory fact sheets on all types of Class 7 transport (see p5).

The ISC has also set up regional networks and co-ordinators for each continent, and requested that states assign a National Focal Point (NFP) for these issues (with over 70 NFPs designated so far).

The committee has set up a denial-reports database, prepared a website and launched a campaign to demystify Class 7 transport.

Also available is a free e-learning package by the International Maritime Organisation for Class 7 transport, and maps to assess route sustainability. Finally, everyone in the industry is encouraged to provide reports of their delays/denials using the simple form available.

SHIPMENT COMMITTEE

Over the years, the TIC has welcomed exploration and mining companies into the association where they have made their mark on the industry to a greater or lesser degree. Sadly a number of them have left as their focus changed or they left the tantalum industry entirely.

TIC MEMBERSHIP

Most tantalum-bearing raw materials are sold on long-term contracts, although there is some spot market activity. Prices are a matter of negotiation between buyer and seller and are not made public. There are no official or published prices, as tantalum is not traded on any metal exchange.

MARKET PLACE


Mining Journal special publication – TantalumSeptember 2010 5

INTRODUCTION

5

stakeholders, to empower and involve the entire supply chain and the local authorities, and to assist and

encourage self-regulation supported by

audits. This is what the TIC members have voted for,

and this is what the TIC is working to achieve in partnership with the iTSCi.

MOVING RADIOACTIVE MATERIALRadioactivity is naturally present in all rocks to varying degrees. This is due to the presence of thorium and/or uranium, and what are known as their progeny or ‘daughters’ (the elements produced by the radioactive decay of the ‘parent’ thorium or uranium).

Sometimes the concentration of these radioactive elements is sufficient to merit closer attention, primarily in the handling of processing at the mine site.

Certain areas of the world, eg parts of the DRC, Mozambique, Nigeria, Russia and Zambia, have higher Th/U concentrations than others, and a wide variety of mineral commodities may be affected, including coal, cobalt, copper, niobium, tantalum, tin, tungsten and zircon. One mineral which often has remarkably high values is monazite, a source of rare earth metals.

Transport of these minerals is a lesser concern than handling and processing, nevertheless those minerals with higher concentrations may be subject to transport as Dangerous Goods Class 7, Radioactive Material. The TIC estimates that 95% of the tantalum raw materials are above what is known as the exemption level for Class 7, therefore only a small fraction of the minerals traded may be transported as ordinary material or general cargo.

This situation arose as a result of recommended regulations set by the International Atomic Energy Agency (IAEA) in 1996 which then started to come into force as national regulations a few years later.

To study this issue, the TIC formed a Transport Committee in 2002 and commissioned a detailed radiological study into the transport of tantalum raw materials by the experts SENES Consultants that lasted from 2004 to 2007.

The TIC has participated, been invited and contributed to a variety of forum (including the IAEA, EAN-NORM, IMO and WNA) since 2002. The TIC participated in the IAEA CRP on the ‘Appropriate Level of Regulatory Control for the Safe Transport of Naturally Occurring Radioactive Material (NORM)’, which looked at studies from nine different countries and ran from 2006 to 2009; the TIC is currently assisting in the completion of the draft report for this CRP.

The TIC has also been attending the IAEA Transport Safety Standards Committee since 2008 to pro-actively monitor regulatory developments and provide feedback from the tantalum industry before any changes are turned into regulations.

The TIC was one of the founding institutions of the ISC-DOS which was set up in 2006 to identify and address the problems affecting transport of Class 7 materials; the TIC has contributed fact sheets and other material, including over 20% of the delay/denial reports in the ISC’s database which is used to identify broader patterns.

The consolidation of metal powder for ingot and processing into various metallurgical products begins with either vacuum arc melting or electron beam melting of metal feedstocks, comprising powder or high-purity scrap, where the elements with boiling points greater than tantalum are not present.

Double- and triple-melt ingots achieve a very high level of purification with regard to metallics and interstitials. Ingots are used to produce the various metallurgical products named earlier.

Ingot stock is also used for producing such alloys as tantalum-10% tungsten. Ingot and pure tantalum scrap are used in the production of land and air-based turbine alloys.

EXTRACTION AND REFINING

stakeholders, to empower and involve the entire

encourage self-regulation supported by

audits. This is what the TIC members have voted for,

and this is what the TIC is working to achieve in partnership with the iTSCi.

stakeholders, to empower

regulation supported by audits. This is what the TIC

members have voted for, and this is what the TIC is working

to achieve in partnership with the iTSCi.

continued from page 3continued from page 3



PROFILE

6

CIF Mineração SA:a proven Brazilian source

CIF Mineração SA, a holding of AMG Advanced Metallurgical Group NV, owns and operates the Volta Grande mine (MIBRA) located nearthe city of Nazareno in the state

of Minas Gerais, Brazil. The company extracts and processes pegmatite

ore from which it currently produces a tantalum and niobium concentrate, high purity tantalum and niobium oxides, feldspar for the ceramics/glass industry and tin.

CIF Mineração is actively developing future products such as lithium concentrate, kaolin and albite. The company has operated a pilot plant for the separation of lithium minerals and albite since the fourth quarter 2009, and has successfully produced chemical-grade lithium concentrate.

SUSTAINABLE BUSINESS MODELThe operations at MIBRA possess several key competitive advantages:

Non-Conflict source: The company is one of the few proven suppliers of non-conflict tantalite amid growing concern over materials sourced from the Democratic Republic of Congo (DRC) or its nine neighbouring countries.

Multi-mineral deposit: More than half of the pegmatite processed is converted to saleable product. MIBRA is one of the most cost efficient tantalum mines because of its ability to leverage existing resources to create incremental products and revenues.

Feldspar logistics: MIBRA is located in the heart of the Brazilian porcelain industry and as a result, has a cost advantage versus local competitors and imports.

Environmentally friendly: The manufacturing process only requires a minimum-sized tailings pond.

Experience: Well developed process technology and experienced workforce; the mine currently employs 105 staff and 130 people in contracted services.

CONCENTRATION PLANTThe main deposit is Orebody A, which is a compact pegmatite with 6.32Mt at 375 ppm Ta2O5, 92ppm Nb2O5 and 283 ppm Sn. This orebody reserve was certified in July 2008 by SRK Consulting to National Instrument (NI) 43-101 standards. The mine also has

an estimated additional 11.6Mt of pegmatite in other hard orebodies. At current production levels, these hard ore bodies are estimated to provide 30 years of mine life.

Orebody A mineralogy:■ Albite (25-30%)■ K-Feldspar (15-20%)■ Quartz (20-30%)■ Spodumene (10-15%)■ Zinnwaldite (8-10%)

In addition to the hard orebodies, there are many others soft pegmatite deposits with an estimated potential of 7.6Mt. These soft pegmatite deposits are kaolinised with a resource estimated at 2.7-3.0Mt.

A pilot plant study has proven that 80% of this material is recoverable and could be used for sanitary ware, ceramic titles and others applications. CIF Mineração is investigating the white mica applications.

Soft pegmatite mineralogy:■ Quartz (50-60%)■ Kaolinite (35-40%)■ White Mica (1-5%)■ Iron Oxides (0-2%)

An exploration work programme with 30,000m of drill hole is taking place to measure the compact and soft pegmatite.

CURRENT OPERATIONSMining operations consist of conventional surface mining activities such as drilling, blasting, loading and transportation.

The processing portion of mine operations consists of a hydro-gravity plant that concentrates the heavy minerals of economic value; tantalite, microlite and cassiterite. This plant has a capacity to process 600,000t/y and produce 300,000lb of Ta2O5 in concentrate annually with the potential for expansion to 450,000lb annually..

0

50

100

150

200

2003

2005

2004

2006

2007

2008

2009

2010

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19

42

84101

118132

144

Feldspar: Ceramic Production (‘000t)

OREBODY AMetal Grade (g/t) Metal content

(Mlbs)Ta2O5 375 5.2Nb2O2 92 1.5Sn 283 2.1Li2O 10,100 140.7

CIF Mineração SAPaulo Guimaraes MiskOperational DirectorRodovia LMG 841 - Km 18 - S/NVolta GrandeCEP 36370-000Nazareno - MG, BrazilE-mail: [email protected]: +55 (3 5) 3842 1832

1912 Founded in Rio de Janeiro, Brazil1945 MIBRA mine starts activities in Nazareno1978 MIBRA purchase by Metallurg Group2002 Started production of feldspar for ceramics

industry applications2007 Metallurg Group goes public as part of AMG

Advanced Metallurgical Group NV2008 Doubled processing capacity to 300,000lb

Ta2O5 by constructing a new tantalum concentration plant

2010 Successfully produced chemical-grade lithium concentrate at pilot plant

CONTACTS

HISTORY

Volta Grande mine at Nazareno- MG

Concentration plant

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Mining Journal special publication – TantalumSeptember 2010

PROFILE

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AUSTRALIA-based Gippsland Ltd is focused on the development of its major tantalum and tin deposits in Egypt. The company’s prime assets are world-class tantalum-tin projects

in the Central Eastern Desert of Egypt, adjacent to the western shore of the Red Sea.

These projects include the 44.5Mt Abu Dabbab project, scheduled to be brought into production in 2013, and the 98Mt Nuweibi tantalum deposit, situated 17km south-east of Abu Dabbab.

Gippsland shares trade on the Australian Stock Exchange (GIP) and the Frankfurt Deutsche Börse (GIX), reflecting the company’s large shareholder base in both countries.

Gippsland has developed a solid infrastructure and a highly supportive commercial relationship with the Egyptian government. With a low-cost production base, favourable commercial environment and key logistical advantages, Gippsland is poised to become one of the world’s largest tantalum suppliers, enabling it to capitalise on the global shortage of the strategic metal tantalum.

ABU DABBAB – ON TRACKA Bankable Feasibility Study (BFS) has determined that the Abu Dabbab project alone is capable of producing 650,000lb/y of tantalum pentoxide in the form of a high-purity synthetic concentrate, the transportation of which will not be constrained by IMO Class 7 shipping restrictions.

The project, which has an expected mine life of 20 years, will become the world’s largest tantalum supplier. In excess of 1,500t/y of LME-grade tin will be produced as a co-product to the tantalum-pentoxide.

The project is being developed by Tantalum Egypt JSC, a company incorporated in Egypt, which is 50% owned by the Egyptian government via the Egyptian

Mineral Resources Authority (EMRA) and 50% by Tantalum International Pty Ltd, which is a 100%-owned subsidiary of Gippsland Ltd. Gippsland will maintain board and management control of the joint-venture company for the life of the project.

The Abu Dabbab scheme has the major advantage of being in its own free-trade zone, which provides relief from Egyptian taxation, import/export licensing and customs import duties.

Key features of the project include:■ Huge, 142.5Mt JORC and NI43-101 compliant

resources base;■ 60% of mineralisation at Abu Dabbab has been

categorised as ore reserves;■ 2Mt/y initial mill-feed rate, producing more than

650,000lb/y of tantalum pentoxide in the form of a high-purity synthetic concentrate, plus 1,530t/y of LME-grade tin metal as a co-product;

■ Existing ten-year offtake agreement with the world’s largest tantalum refiner, HC Starck GmbH, of Germany, for 600,000lb/y. Further negotiations are underway over pricing;

■ Project-specific free-trade zone with zero taxation, no import-export licensing, and no customs import duties for machinery and project consumables;

■ Environmental studies completed to World Bank standards; and

■ All project permitting requirements completed.

The capital cost for the project, including financing during construction, is estimated at US$173 million. The estimated time to complete the engineering design and construction of the plant at Abu Dabbab is two years, with production due to start in March 2013.

MARKETINGAn agreement has been reached with the German tantalum refiner HC Starck GmbH for the supply of 6Mlb of the product to HC Starck over the initial ten years of production.

Negotiations are underway to adjust the offtake price to reflect the higher-value synthetic tantalum product which will now be produced. The confidential pricing mechanism contained in the offtake agreement provides protection against production cost increases and underpins the viability of the project by reducing the long-term market risk.

Based on the present price of tin, the revenue from

this London Metals Exchange (LME) grade material is likely to generate annual revenue of over US$30 million. Projected tantalum sales are expected to exceed US$40 million annually.

SUMMARYAbu Dabbab is poised to become the largest producer of tantalum – a strategic metal essential for the production of numerous electronic devices, such as cell phones, laptops and video cameras.

The metal is also a crucial component in the production of super-alloys, as used in the fabrication of turbine blades for stationary and jet engines, while its resistance against acid corrosion makes it an important material in the fabrication of specialised chemical plant and equipment.

Abu Dabbab will operate in a most favourable commercial environment, which will ensure low cost production for several decades. Abu Dabbab has the potential to be the world’s largest producer of tantalum pentoxide. Most importantly, Gippsland’s huge 142.5Mt resource base provides a long-term alternative to ‘blood tantalum’, which has financed the ten-year war in Central Africa and caused the loss of more than five million lives.

Gippsland: the most advanced new tantalum projectHuge resource in Egypt could resolve the global tantalum shortage and eliminate dependence on ‘blood tantalum’

Gippsland LtdRJ (Jack) Telford, director and CEOPO Box 352, Nedlands WA 6909,, AustraliaE-mail: [email protected]: www.gippslandltd.comTel: +61 8 9340 6000Tickers: ASX, GIP; FRA, GIX

CONTACTS

Nuweibi is located 17km south of the Abu Dabbab deposit and 30km inland from the Red Sea. The project has indicated and inferred resources of 98Mt of 0.0143% tantalum pentoxide. The resource presents an opportunity to substantially increase production, leveraging the Abu Dabbab process plant for several decades beyond the initial, projected 20-year mine life.

NUWEIBI OUTPUT



PROFILE

8

THE Kanyika niobium project of Globe Metals & Mining will come into production in 2013. The project, in central Malawi, is at the final-feasibility stage and, although the primary

product will be ferro-niobium, tantalum represents a critical by-product.

Tantalum will represent 15-23% of revenue, with ferro-niobium representing 68-80% of the total and uranium 6-10%. Annual production from Kanyika will be approximately 192t Ta2O5 (produced as a by-product of ferro-niobium; FeNb) and 3,000t of niobium metal.

At a lower cut-off of 1,500ppm Nb2O5 the total resource is 60Mt. However, the higher-grade component of the resource (represented in the table, see below) is largely near surface and is the material to see below) is largely near surface and is the material to see belowbe mined in the initial 8-10 years.

The annual production of some 420,000lb will make Globe one of the most significant producers of the product. Pre-economic crisis, annual global consumption was estimated at 5.8Mlb.

There are a number of features about the Kanyika niobium deposit, as it relates to tantalum, that makes it particularly interesting:■ A critical feature of the Kanyika project is that the

principal product, FeNb, enjoys one of the most stable pricing regimes for any commodity, whereas tantalum prices have over the past ten years been extremely volatile, to the point of detrimentally impacting that industry. This is the ideal niobium/tantalum relationship (primary/by-product), as overall project cash flows are likely to be relatively stable.■ Globe’s tantalum production will be a value-added product, either tantalum oxide or k-salt, as opposed to a ~30% Ta2O5 concentrate.

In the FeNb production flow sheet, Globe initially produces a niobium/tantalum/uranium concentrate, which is then separated into individual elemental oxides via solvent extraction.

The niobium oxide is then used to produce the FeNb. As a result, Globe will be a relatively vertically integrated supplier of tantalum, being a miner that produces beyond the concentrate stage. ■ Malawi is not an ‘adjoining country’ to the DRC (as defined under the recent US legislation for the purposes of controlling conflict minerals). Globe will therefore be an African producer of tantalum, but not affected by the new constraints imposed on many other African producers.

Other important aspects of the Kanyika niobium project:■ Malawi is a stable, democratic, mining-friendly

country;■ The Kanyika operation will be an open-pit mine,

with very low strip ratio;■ There is potential for a downstream refinery to be

located outside Malawi, close to key markets;■ The total capital cost is approximately US$160

million, with a similar level of annual revenue;■ Capital payback period of only approximately three

years, with a very long mine life potential; and■ Kanyika will become Malawi’s second major mine.

Globe’s Malawi promise

Globe Metals & MiningP.O. Box 1811West Perth WA 6872AustraliaE-mail: [email protected]: www.globemetalsandmining.com.au Contact: Mark SumichTel: +618 9486 1779Fax: +618 9486 1718

CONTACTS

The company will become one of the most significant producers of tantalum

“Globe is well positioned to become a reliable, volume

“Globe is well positioned to become a reliable, volume

“Globe is well positioned to

and ethical supplier of quality tantalum products,

and ethical supplier of quality tantalum products,

and ethical supplier of

with the start of production quality tantalum products, with the start of production quality tantalum products,

from Kanyika in 2013”with the start of production

from Kanyika in 2013”with the start of production

KANYIKA: MINERAL RESOURCE ESTIMATES

Ore Nb2O5 Ta2Ta2Ta O5 U3O8 ZrSiO4

Category (Mt) (ppm)Measured 3 5,400 250 160 6,600Indicated 7 4,400 200 110 5,900Inferred 11 3,600 160 90 5,600Total 21 4,100 180 110 5,800Cut off: 3,000ppm Nb2O5

Reverse circulation drilling at Globe’s Kanyika Niobium project



PROFILE

9

THE niobium and tantalum Crevier deposit, located just a few hours north-west of Quebec City, was discovered in the 1970s by state-owned SOQUEM. Crevier Minerals Inc, which was created in 2008

to develop the project, is now owned 67.5% by MDN and at 32.5% by IAMGOLD. The latter is a major gold producer, and the third-largest ferro-niobium producer in the world. Both owners are based in Canada.

MDN is confident in bringing the Crevier deposit to production, and in establishing it as a top-tier supplier of tantalum and niobium. The deposit has the significant advantage of being in a politically-stable country and world-class mining jurisdiction.

COMPETITIVE ADVANTAGES The main competitive advantage of the Crevier deposit is its location. Quite apart from the political stability of Canada, and Quebec, there is considerable depth of expertise in the province. The project is also well serviced in terms of roads, power, a deep-water port and suppliers.

The Crevier project is also located within the Quebec government’s ‘Plan Nord’, and forms part of its ‘Mineral Strategy Plan’. The latter supports socially responsible and sustainable economic development in northern Quebec. Partnerships between companies, regions and the government are encouraged in order to increase mining development, improve knowledge of mineral potential and access infrastructures.

CREVIER PROJECTThe deposit occurs within the Crevier alkaline complex related to a major structural lineament that also hosts IAMGOLD’s Niobec mine near Chicoutimi. The Crevier 2010 updated measured and indicated resources was evaluated at 25.4Mt at 0.20% Nb2O5

and 234ppm Ta2O5, with inferred resources of 15.4Mt at 0.17% Nb2O5 and 252ppm Ta2O5.

An independent preliminary economic assessment was completed in January 2010. This report concluded that with an open pit production rate of 4,000t/day, the project has the potential to generate an average annual revenue of US121 million over a projected mine life of 18 years.

At a projected capital expenditure of US$305 million, the average annual profit is estimated to be US$56 million, representing a pre-tax net present value of US$263 million (using a discount rate of 5%). Metals prices were estimated in 2009 and based on an analysis of the market outlook by Roskill Consulting Group Ltd.

MDN is very encouraged by the results of the independent economic evaluation, and has invested in a feasibility study that will be completed in the first half of 2011. The company is looking forward to becoming Quebec’s first combined Nb-Ta oxide producer.

WORK IN PROGRESSMining engineers from MDN, and well-recognised industry consultants, are completing a feasibility study for the Crevier project. The aim of this study is to confirm, and improve, the economic parameters outlined in the 2010 preliminary economic assessment.

The mineral resource is confirmed in terms of size and grade, and many economic parameters defined in 2009 have already improved. These include the increasing price for tantalum, higher niobium and tantalum grades, and a resource that is enriched to the south of the open-

pit shell and extends up to 3km to the north. Every technical aspect and assumptions used in the

preliminary economic assessment will be reviewed and developed during the feasibility study. Metallurgy and processing development are key steps in the development of these types of deposits.

The project’s objective is to use a conventional floatation circuit to produce a primary concentrate followed by a niobium and tantalum oxide separation using acid lixiviation. The metallurgical recovery used in the scoping study was estimated to be 69% but this will be confirmed through the final flow sheet development and pilot tests being conducted by world-renowned experts at SGS Lakefield.

FINANCIAL STABILITYThe recent ‘Conflict Minerals Bill’ passed by the US Congress, and a key European Union statement published in June 2010 warning on shortages of 14 strategic metals, have highlighted the shift in global supply and demand for metals such as tantalum and niobium.

Development of the Crevier project has been financed by MDN (the feasibility study is fully funded). Given the excellent timing to take advantage of supply shortages of tantalum in a rising price environment, and the attractive economics of the Crevier open-pit operation (with its potential mine life of at least 18 years), MDN is confident it will be able to finance the project through corporate debt, strategic partnerships, or through end-user off-take agreements.

Opportunity in Quebec for MDNCrevier could become a leading supplier of tantalum and niobium

2009 2010 2011 2012 2013Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Scoping DevelopmentFeasibility StudyEconomic Review; Go, no goPermitting/ConstructionPermittingDetail Engineering/ProcurementPower Line Engineering and ConstructionMine ConstructionStart upProject Financing/Market Development

CREVIER DEPOSIT DEVELOPMENT SCHEDULE

MDN IncSuite 680, Place du Canada1010 de la Gauchetière WestMontreal, QuebecCanada, H3B 2N2

Nicole Blanchard, Investor RelationsTel: +1 450 973 6600 E-mail: [email protected]: www.mdn-mines.comTSX: MDN

CONTACTS



PROFILE

10

AUSTRALIAN resources company Ram Resources Ltd (ASX: RMR) has recently entered into an agreement to acquire (in a series of stages) the Motzfeldt polymetallic project in

southern Greenland. The deposit is near the transport hub of Narsarsuaq, which lies just 24km to the west.

The Motzfeldt project has the potential to become a world-class, bulk-tonnage tantalum-niobium deposit, with an additional potential for value-added rare earths, although further exploration work is required in order to define a JORC resource.

The prospectively of the Motzfeldt area was first investigated by the Greenland-Danish Geological Survey (GEUS), which carried out several geophysical and surface sampling programmes in the early 1980s.

As a result of this work, five radiometric anomalies (occurring over a strike length of 7km) were shown to be associated with tantalum-rich pyrochlore mineralisation, hosted by hydrothermally-altered syenite.

In 1987, GUES estimated a mineralised zone of 500Mt* at Motzfeldt, with average grades of 1,320-1,480ppm Nb and 110-130ppm Ta. Within the larger mineralised zone, GEUS identified areas of higher grade at Aries (30Mt) and Merino (30Mt) and designated them as priority targets.

During 2000-06, AIM-listed Angus & Ross plc carried out further work, including a limited drilling programme (nine holes for a total of 1,621m) on the Aries target. During this time an engineering scoping study was completed (based on a very modest conceptual deposit of 15Mt grading 500ppm Ta and 6,000ppm Nb). International mining consultants Behre Dolbear reviewed this work and concluded that the

project did not appear to have any ‘fatal flaws’, and there is no reason not to continue exploration and expenditure to move it towards feasibility.

Ram is conducting an exploration programme in Greenland, with the work centered on the Aries target, with the aim of establishing an initial mineral resource. The mineralised zone at Aries is thought to be approximately 1,500m long, 300m wide and 400m deep.

The programme incorporates:■ 2,000m (comprising approximately 10-12 holes)

targeting the known higher-grade areas, and also extending the drilled area for 1,000m along strike;

■ Digging a series of shallow trenches across the mineralised zone to gain a better understanding of the geological controls;

■ Updating and improving the geological mapping; and■ Ground geophysics and surface sampling.

Ram provides investors with exposure to a potential world-class deposit whose minerals include Ta, Nb and REE. All of these are currently showing strong demand, and will likely continue to do so because of their high-tech applications. Ram also provides excellent leverage to exploration success, compared with other companies in the region and sector, and has limited downside.

*These target areas are considered to be ‘exploration targets’, according to JORC, as the potential quantity and grade is conceptual in nature. To-date there has been insuffi cient exploration, and there is currently insuffi cient information to defi ne a mineral resource. At this time it is uncertain if further exploration will result in the determination of a mineral resource.

Greenland opportunity for Ram ResourcesMotzfeldt has the potential to become a world-class tantalum-niobium deposit

Ram Resources LtdLevel 1, Old Swan Brewery173 Mounts Bay RoadPerth 6000Contact: Mike DrewE-mail: [email protected]: www.ramresources.com.auTel: +61 8 9322 6424Fax: +61 9 9322 6778Mobile: +61 417 969995

CONTACTS

Motzfeldt project

A helicopter over Motzfeldt

The Motzfeldt core



PROFILE

11

SHAMIKA Resources was founded in Canada HAMIKA Resources was founded in Canada HAMIKAin 2006 with the objective of becoming one of the key global producers of columbo-tantalite ore. The Kibara belt on the African rift valley holds over 80% of the

world’s columbo-tantalite reserves1. In response to this, Shamika has acquired more than 40 exploration licences, covering a total of more than 5,083km2, in the Democratic Republic of the Congo (DRC).

Territories on which Shamika licences are held also hold large reserves of tin, niobium, tungsten, copper, cobalt, gold and diamonds. Shamika’s licences are not subject to review, and were acquired under the country’s new mining code, which was re-written based on a Canadian framework. It is, among other principles, protective of the rights of local and foreign investors.

The Montreal-based company set out on its corporate mission in the middle of the decade with a strong belief that post-war DRC could, and would, become a driving force for change on the African continent. Shamika founders have been active on the ground in Africa for years – they have financially backed their beliefs in the potential for change and transformation in the DRC.

Shamika recognises the state of affairs in the DRC, and is fully conscious of the challenges that lie ahead to overcome a situation that is still evolving on certain fronts. But the situation on the ground is improving on a daily basis – officials, who were democratically elected in 2006, are actively addressing these problems with increasing success.

The company has established itself in local communities to build ethical mining operations, capable of extracting minerals on a scale commensurate with world leaders in the domain. Co-operatives are increasingly active locally, and Shamika is assisting in the creation of these groups. They, in turn, will help bring about more transparent exchange outlets to facilitate the trade of minerals in a more ethical manner.

NEW LEGISLATIONLegislation passed recently by the United States Congress is intended to curb the black market, and to boost the legal one. Companies that report to the US Securities and Exchange Commission now have to reveal whether they buy minerals from the DRC, or from any of its nine neighbours, and, if so, to demonstrate the source2.

In concert with the efforts of the World Bank, and

of other international corporations and human rights organisations, Shamika is in the midst of validating that it is operating legitimate mines in the DRC, while upholding strict codes of corporate conduct in association with local officials.

‘Proof of origin’ initiatives, such as those being put in place in the DRC, are not the final answer to issues of questionable origins, but their successful implementation are the bedrock of the clean-up endeavour.

There is concrete proof in the sector that world-leading organisations and corporations share Shamika’s vision in the DRC. Shamika believes that traceability of minerals is part of the answer.

In concert with the leading legislators, Shamika is endorsing and associating with those initiatives to clean-up the trade in the DRC. The company is creating strong links within the community of local artisan minors to ensure the wealth created will not only benefit investors, but the local community as well.

The company is also laying the ground work to set-up the Shamika Resources Foundation to promote the company’s core values in areas such as health care, education, micro-finance, and women’s and children’s rights. It will be governed by both Canadian and Congolese laws.

Shamika Resources is undertaking this venture because even if the DRC government has the primary responsibility for ensuring that companies respect human rights, companies must also uphold human rights in their operations and in their sphere of influence.

Shamika is actively involved in encouraging the development of a stable environment for investment and business. This environment must be regulated by the rule of law, in which contracts are honoured, corruption reduced, and where the private sector, both foreign and domestic, has clearly defined rights and responsibilities.

World opinion, for the most part, does not presently endorse Shamika’s belief in the potential for positive change in the DRC, but nor did it endorse such a

positive outlook at the end of the last decade for some countries in post-communist Europe and in south-east Asia. History, and positive social, political and corporate agents of change, proved it wrong.

To that end, Shamika believes the same is possible in the DRC. It has been a leader for the DRC, among the juniors, in mining and social activities.

According to the Australian Geological Survey’s bulletin 22, the DRC land and properties where Shamika has its permits contain grades of 10-40% Ta205, which are by far the richest grades found on the planet.

Together with the fact that over three quarters of the world’s reserves of the mineral are held in the country’s undergrounds, Shamika has completed its set-up phase and is now poised to become a key worldwide mining operator.

Consequently, it is currently engaged in talks with global players, both on business and social levels, to enter long-term supply contracts and to continue implementing its strategy in Africa, one that will allow Shamika to operate ethically in the DRC well into the next decade, and well within all the ethical code of conduct guidelines the company, and the mining industry, have developed.

Sources: 1Mark Smith, RBC Securities Capital Markets, December 8, 2006. 2The Economist, August 19, 2010

Shamika Resources emerging in DRC

“Manufacturers, such as Apple and Nokia, are

sponsoring pilot schemes to Apple and Nokia, are

sponsoring pilot schemes to Apple and Nokia, are

trace the ore coming out of sponsoring pilot schemes to trace the ore coming out of sponsoring pilot schemes to

two particular mines to prove trace the ore coming out of

two particular mines to prove trace the ore coming out of

they can regulate the tradetwo particular mines to prove they can regulate the tradetwo particular mines to prove

2”

Canada-based Shamika Resources is emerging as a transparent, and fully compliant, mining player in the DRC

Shamika Resources1980 Sherbrooke Street West, Suite 1100Montreal (Quebec) CANADA H3H-1E8E-mail: [email protected]: www.shamikaresources.comContact: Robert Vivian, President & CEOTel: + 514 931 9990, ext. 33Mobile: + 514 850 1105Fax: + 514 514 907 5122

CONTACTS

Main: The Shamika team arrive at Kalimbi Mine, South Kivu, DRC. Inset: Robert Vivian, president and CEO of Shamika Resources Inc

11Tantalum_supptemplate.indd 11 28/09/2010 14:53

Published in September 2010 by:Aspermont UK Albert House, 1 Singer Street London EC2A 4BQTel: +44 (0)20 7216 6060Fax: +44 (0)20 7216 6050E-mail: [email protected] Website: www.mining-journal.comSupplement editor: Chris HindeDesign and production: Woody Phillips, Tim Peters

Printed by Stephens & George Merthyr Tydfil, UK © Aspermont UK 2010

12Tantalum_supptemplate.indd 1 28/09/2010 14:58

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