Surging consumption in the advanced electronics, artificial intelligence (AI) and aerospace industries has driven strong growth in tantalum and niobium demand this year. But this surge has come at a time when supply chains are already strained by non-state armed groups capturing key mining areas in the Democratic Republic of Congo, which has made traceability a much bigger challenge.
Argus spoke to industry association the Tantalum-Niobium International Study Centre (TIC) president Silvana Fehling, who is also Germany-based producer Taniobis' senior director of materials management. Argus asked her about the outlook for the tantalum and niobium industry, the challenges facing supply chains and the importance of independent due diligence. Argus also asked about the industry's reaction to China's decision to sanction US-based industry coalition the Responsible Business Alliance (RBA), but the TIC was unable to comment at the time.
In which sectors do you see the biggest growth for tantalum and niobium demand?
We will see growth across many areas rather than one single sector. For tantalum, electronics will remain very important, particularly tantalum capacitors. But we also see growing demand linked to high-performance electronics such as semiconductors, because of demand from data centres and other advanced technologies. AI is definitely something that is a big driver for our industry right now. Data centres need a huge amount of very reliable and corrosion-resistant tantalum capacitors.
For niobium, I think the picture is a bit broader. Steel remains a very dominant and important market, but niobium has also become more important for other industries. It is expanding into aerospace, energy applications and additive manufacturing.
How do you think the industry will be able to accommodate the surge in tantalum demand from technology applications?
The industry will have to do three things — increase capacity, diversify supply and improve efficiency.
Increasing capacity is quite clear. Start developing a mine, investing in mine processing or refining. We are lagging a bit behind on this, but we clearly see more focus is on investing into capacities.
Secondly, customers are looking for more diversified and resilient supply chains. This means looking at different regions and trying to work with different sources.
And on improving efficiency, I think mining companies, refiners and producers will improve communication and transparency to improve efficiency in the supply chain and have better outcomes.
Could you explain more about how the industry can diversify tantalum supply?
Artisanal mining will remain an important part of the tantalum supply chain. It is contributing volume-wise but it is also generating income for the people in central Africa and it is able to quickly adjust to demand from the market.
In terms of expanding or finding new capacity, in the past there were a lot of projects and mines that were not possible to run economically. Lithium by-product projects have been part of that discussion for a long time but have not made much economic sense.
But we see that governments are focused more on critical minerals, and that there are corporations within totally different industries looking into new streams of recycling, regaining or trying to recover from residues. This is definitely something where I think we will see additional supply in the future.
There are also regions that were not so competitive cost-wise in the past. Canada, for example, which has had a combination of problems such as environmental and cost structure. Having strong demand and better margins for tantalum and niobium mining firms will mean projects that were less attractive in the past might become more attractive.
You say that central Africa will remain part of the supply base, but how is the industry adapting to the security situation in the DRC?
This is one of the most common issues for our industry. We must make sure that our supply chains do not contribute to conflict or serious human rights abuses, and our focus is on helping to build transparent supply chains.
But the solution is not moving away from that region. We must make sure that we get traceable, reliable and transparent systems in place and do the due diligence that allows us still to use some proportion of material from that region.
There have been questions about reliability around using established third-party systems such as the International Tin Supply Chain Initiative. But in the past few years, refiners and stakeholders have had time to work on and develop confidence in their own systems. The industry is still using third parties as a supporting tool but is not relying exclusively on these parties.
At the TIC, we support our members in their due diligence efforts with know-how and the advanced due diligence handbook. But in the end, due diligence remains the responsibility of each company participating in this market.
How is the industry responding to wider geopolitical tensions and trade barriers that have targeted critical minerals in recent years?
Trade restrictions can create opportunities and challenges. It may encourage new investments and diversification, but it can also increase costs and uncertainty in the short term.
The TIC is a global organisation with members all over the world, trying to offer a neutral platform for dialogue between different regions. Therefore, our focus is always on helping our members grow the market and develop new applications. Ours is a global industry, working with global materials. Tantalum and niobium are mined in one region, processed in a totally different one and finished in another region. So I would say, do not touch on politics and stick to business.
