Mining concessions in North Kivu and South Kivu, eastern DRC* Source: congomines.org.
Recent reporting on conflict in the Democratic Republic of the Congo (DRC), based in part on the UN Security Council’s Group of Experts report of December 2023 and in part on a communique from the Responsible Minerals Initiative (RMI) to its roughly 400 members, has renewed concern in the tantalum industry around the infiltration of conflict-derived tantalum ores into global supply chains as well as conflict-related disruption to global markets.
The UN Group of Experts has alleged that DRC tantalite from certain mining areas (specifically concession PE-4731, the concession in North Kivu province formerly managed by Société Minière de Bisunzu (SMB), where mining permissions were cancelled by the DRC Government) have entered sup-ply chains from the spring of 2023 either in the DRC or else via Rwanda, while the ITSCI production figures for the surrounding PE-76 concession are estimated by the UN Group of Experts to be five times greater than actual production.
CPM Group takes no position on the validity of the UN Experts’ allegations. However, our tantalum industry analysis does include close attention to production from the DRC-Rwanda-Burundi region and we can offer some additional insights.
First, it is clear from the available ITSCI data that there is a material discrepancy between the tonnes of tantalite ITSCI reports as shipped from the DRC, and the tonnes received by importing countries. The practicalities of shipping ore mean that ore exported from the DRC in any given month likely is delivered three months later, and it is unfortunate in the extreme that ITSCI’s published numbers are generally at least a year old.
That being said, tonnes shipped from the DRC for the 15-month period ending December 2022 (the latest ITSCI numbers currently available) represent only 80% of the tonnes reported by importing countries as received from the DRC for the 15-month period to end March 2023. We see similar or larger discrepancies looking over longer time periods.
Second, Rwandan numbers are remarkably in balance, with ITSCI reported shipments and aggregate reported imports in very close agreement. Thus, if the claims of smuggling through Rwanda are true, it is likely also that smuggling is coordinated closely so that ITSCI data (and therefore ITSCI tags) are organised to match shipments. We emphasise that we are not taking a view on the allegations of smuggling, just pointing out the implications if smuggling is occurring at a meaningful scale.
Third, this is a problem likely almost entirely for Chinese processors in the time period that is the focus of the most recent UN report.
No material from the region was delivered to the United States after January 2023 (a cargo originating in Rwanda), and to Germany after May 2023 (also from Rwanda). Thailand and Kazakhstan last imported ore from the region in the third calendar quarter of 2023, and Japan reported no 2023 imports. Given a 3-month delivery time for ore shipments, none of these countries, all homes to important tantalum processors, appears to have imported any regional tantalite since about June 2023.
Meanwhile, Chinese imports from the region grew from 2022 to 2023. The most likely reason for this is a tender by the Chinese Government for about 400 mt of tantalum ore to build a strategic stockpile of tantalum. China lacks significant tantalum resources, and its only substantial producing mine today is the Yichun Mine. One can readily understand in a world of rising tensions why China may seek to accumulate a strategic reserve of a critical metal.
Fourth, the situation is likely to hurt the DRC’s efforts to move downstream in tantalum. The PE-76 concession is operated by Congo Fair Mining (CFM). CFM has been reported (November 2023) to be planning to develop a tantalum refinery in the DRC, but it is hard for CPM Group to see how products from the underlying concession can be accepted into world markets until the concerns of the UN Group of Experts are resolved.
As of late March 2024 the conflict in and around the concession (centered around Rubaya in the PE-4761 concession but extending east to Sake) appears to be worsening.
Finally, right now, the situation is not disrupting meaningfully the market and, in CPM’s view, supply constraints are likely to be mitigated, at least partly, by increasing production from other regions of the world. Nigerian columbite production has increased as a byproduct of strong niobium prices, Brazilian production has been growing thanks to improved out-put by the Mibra Mine of tantalite as well as columbite, and most important, Australian production is increasing on the back of rising lithium output.
The dramatic collapse in lithium prices in 2023 has not had any visible impact on lithium supply from the major tantalum byproduct producers. In fact, Pilbara Minerals is currently working to resume tantalum supply, while Mineral Resources’ Wodgina Mine is in the process of commissioning its third production train. Even the curtailment at Greenbushes is un-likely to have an impact on tantalum supply from the mine.
With tantalum demand still low and inventories still being drawn down (something CPM Group underestimated for 2024) there is no immediate concern for supply and there-fore price stability. Australian ore sales (likely by GAM) were booked in 2023 to Thailand and China and we expect to see more of this in 2024. There is scope for further near-term tantalum supply from Australia, especially from Bald Hill, recently acquired by Mineral Resources.
Looking to the long term, we project supply from the Rwanda-DRC region of Africa will remain important to global tantalum supply as demand grows through the early 2030s.
Also, the strife in the region is unlikely to disrupt severely industry growth, with disruptions there creating opportunities for Nigeria, Brazil, and especially Australia.
By Andrew Matheson and Patrick Stratton
CPM Group
*Image: Concessions in North Kivu and South Kivu, eastern DRC. Source: congomines.org.
Polymetallic concession 2598 hosts some artisanal mining and is owned by Compagnie Miniere de Kalehe SA (CMK SA), a JV between Amur Sarl and Societe Aurifere Du Kivu et du Maniema SA (Sakima). In 2023 Canadian company African Energy Minerals entered into an agreement to acquire 60% interest in CMK. The 2598 concession, located in South Kivu province, was not mentioned in the UN Groups of Experts’ report.
About the authors
CPM Group is an independent commodities research, consulting, and investment banking advisory company head-quartered in New York. The company is considered the fore-most authority on markets for precious metals, along with manganese and molybdenum. Its entry into tantalum re-search came through a new collaboration with Andrew Matheson and Patrick Stratton, who are both recognised ex-perts in the tantalum market.
Andrew Matheson, the founder and principal of OnG Com-modities LLC, has 25 years of experience in the tantalum in-dustry, leading Cabot Corporation’s tantalum ore procure-ment and mineral development activities, as general manag-er of Cabot’s sputtering target business and serving as direc-tor of R&D. His experience includes a range of other specialty materials including niobium, scandium and rare earth metals.
Patrick Stratton spent 16 years with Roskill, where he led the tantalum research. His experience also covers niobium, gallium, magnesium metal and titanium. In addition to being the lead author of published research reports on these com-modities, he has also undertaken many consulting assign-ments for producers, project developers, financial institutions and government bodies.
