200 jobs axed at Pilbara mine

Privately-owned Talison Minerals said some 200 jobs will be lost as it suspends work at its Pilbara located Wodgina mine, the worlds largest tantalum operation.

Talison, established in 2007 after buying the tantalum and lithium projects from Sons of Gwalia, said contractors will make up more than half of the job losses.

Mining activity will halt from early next month.

Talison said the suspension was driven by the severe downturn for consumer electronics, of which tantalum is used for production, caused by the financial crisis.

In addition, the long-term and increasing trend to reduce material costs in the electronics supply chain, which encourages increased tantalum supply from Africa, was also a factor.

"Tantalum from Central Africa is available at relatively low prices because it is often mined illegally or without regard and commitment to health, safety, environment and labour conditions and frequently transported in contravention of international regulations," Talison said in a statement.

Chief executive Peter Robinson said the company hopes to bring the mine back into production as soon as the economic situation improves.

The company's operations at Greenbushes are not affected.

The announcement is pasted below:

Talison Minerals announced today that it is suspending mining at the world's largest tantalum operation at Wodgina, 100 kilometres south of Port Hedland, Western Australia from early December 2008.

The suspension of operations at Wodgina will result in an estimated 200 job losses, more than half of which will be contractors from a range of companies.

During 2008, Wodgina has supplied more than 30 per cent of the world's tantalum, which is used in popular consumer electronic products such as mobile phones, digital cameras, gaming consoles and computers.

Talison's lithium mining and processing operations at Greenbushes are unaffected. Demand for lithium, particularly for lithium ion batteries, remains robust and the Company is expanding its lithium production facilities to meet increased demand.

Talison's actions are driven by two factors. Most importantly, the recent global financial crisis has seen a severe downturn in worldwide demand for consumer electronics, resulting in lower demand for tantalum. As a consequence, Talison's customers have sufficient tantalum for the near future and have not needed to extend their current contracts.

The second factor is a long-term and increasing trend to reduce material costs in the electronics supply chain, which strongly encourages increased tantalum supply from Central Africa, and particularly from the Democratic Republic of Congo (DRC).

Tantalum from Central Africa is available at relatively low prices because it is often mined illegally or without regard and commitment to health, safety, environment and labour conditions and frequently transported in contravention of international regulations. Revenue from tantalum mining activities in the DRC is reportedly used to fund militias involved in the ongoing civil war in the north east of the Country, with little financial benefit flowing to the local people.

Chief Executive Peter Robinson said it was extremely disappointing to be suspending operations at Wodgina due to economic conditions and industry activities beyond the Company's influence. "Historically, Talison has provided a large, reliable supply source which has underpinned the entire tantalum industry. We have the capacity and the desire to continue in this role and we believe it is in the electronics industry's interests for Talison to play a significant part in its future" he said.

"Our goal is to bring Wodgina back into production as soon as the global economic situation improves and demand and prices are stronger. Until then we will keep working with the electronics industry to encourage all participants in the supply chain to purchase tantalum from responsible sources and to assist in establishing a system that will give consumers confidence that tantalum is being produced in compliance with internationally recognised social, legal, ethical, safety and environmental standards."

"Without Talison's supply the majority of the world's tantalum will come from irregular and unreliable suppliers from politically unstable regions, with much of it coming from the DRC" Mr Robinson said.

Background on Talison Minerals

Talison is a private company owned by a consortium of investors. Talison was established in 2007 after the consortium purchased the tantalum and lithium operations of Western Australian miner Sons of Gwalia.

Mining has been conducted at Wodgina since 1904, initially for tin and later for tantalum. The present tantalum mine was established in 1989 and expanded as the global electronics industry has grown.

Talison has the capacity to produce 1.4 million pounds of tantalum oxide from Wodgina and 1.0 million pounds from Greenbushes, making it the world's largest primary producer of tantalum. The combined capacity of Wodgina and Greenbushes represents more than 50% of global tantalum demand. Tantalum production facilities at Greenbushes have been on care and maintenance for the past three years.

Through its Greenbushes operation, Talison is also the world's largest supplier of lithium minerals which are used in glass and ceramics and for the production of lithium chemicals. Escalating demand for lithium is being driven by the market for rechargeable lithium ion batteries for mobile phones and computers and in the rapidly emerging electric vehicle market.

As a member of the Electronics Industry Citizenship Coalition (EICC), Talison is focused on helping to implement a Code of Conduct that will ensure improved social and environmental outcomes throughout the supply chain for individuals and communities.