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Air lift to precious level

GLOBAL shortages of the hi-tech metal tantalum has forced a European consumer to air freight concentrates from Perth, despite the fact that two thirds of it will be discarded in processing.

It is believed to be the first time mineral concentrates have been flown across the world, reflecting the soaring prices for a metal which is an essential raw material in mobile phones and other electronic devices.

This demand has driven the price of some tantalum end products as high as $A600 per lb, although the concentrates flown - and more commonly shipped by sea - from Western Australia by Sons of Gwalia Ltd are sold under long-term contracts for perhaps a fifth of this.

The German tantalum processor H.C. Starck, along with a U.S. company, dominate the world market, as Sons of Gwalia dominates the mining end of the chain.

The Perth-based company pro-duces nearly a third of the world's tantalum, and has half global reserves, in the long-established mine at Greenbushes and another it acquired recently near Port Hedland.

Starck was so desperate for supplies in December that it asked the Perth miner to arrange to have a 20-tonne parcel sent by air, at a cost of $4 a kilogram, compared with the seaborne rate of 20c.

However, with the container load worth perhaps $80,000, the additional freight was readily absorbed. Another air shipment followed in recent weeks, but supplies have since become a little easier.

However, the fact that such a material can be air freighted in a form in which the contained tantalum makes up only 30 per cent of the parcel demonstrates the value on tantalum, making it almost a precious metal.

It is a long way from a slump in the market in the early 1980s, when prices fell from $US120 per lb. to $US12 per lb., giving the Western Australian miner Greenbushes Tin, grave problems. A merger with Sons of Gwalia followed and production - then prices - have risen strongly in recent years.

Sales of the tantalum concentrate will soon be worth $160 million a year, compared with about $240 million in gold sales for the company, and total revenue about $500 million, including other minerals in its portfolio.

Further expansion of Green-bushes and the Pilbara mine, Wodgina, will produce one million lb from each by the end of next year, confirming the company's position as the world's dominant supplier.

Greenbushes was WA's first gazetted mining field, in 1888, and produced significant tonnages of tin for the next 70 years.

Then tantalum and lithium began to be the primary targets, although wildly cyclical markets gave the mine difficult years.

Five years ago the merged companies, Greenbushes Tin and Sons of Gwalia, acquired the Wodgina project, and have since doubled production.

Last week Sons of Gwalia revealed that it had signed new contracts that will increase it sales commitments to two million lb next year, and 2.4 million lb in 2003.

This will absorb the increased output which will result from the $100 million expansion now under way at the two mines.

Tantalum demand is calculated to be growing by 15 per cent a year, driven not only by electronics, but its use in jet engines and gas turbines.

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