SONS OF Gwalia Limited plans a major expansion of the Greenbushes and Wodgina mines following successful negotiations with two of its major customers.During the quarter, negotiations with the company’s two major customers resulted in the execution of new fixed volumes and price sales contracts for increased production and sales through to December 2005.These contracts provide for sales of 10-12 million pounds of tantalum, in different forms, over a five-year period.As a result, tantalum production will be doubled over the next three years to about 2.3 million Ibs. per annum.Both the Greenbushes and Wodgina mines will be expanded at an estimated capital cost of about $100 million.In line with a recent feasibility study, the Greenbushes mine will be expanded from its current production level of 0.7 million Ibs. per annum to 1.3 million Ibs. per annum. lncreased production will be achieved from expansion of the existing processing facility from 1.6 million tonnes per annum to in excess of 2.75 mtpa.At the Wodgina mine, current production levels of 0.5 million Ibs. per annum will be doubled over the next two years as a result of the production capacity being increased to 1.0 million lbs. per annum. Throughput capacity will increase to 1.8 million tonnes per annum.The capital costs associated with this project are estimated at $35 million and includes ancillary infrastructure, new supplies and power.The company is the largest producer of tantalum in the world. The new contracts and production increases, will significantly enhance the company’s position as the primary supplier of ore to the tantalum industry.Gwalia currently supplies about 25 per cent of global demand.A Gwalia report says demand for tantalum is “extremely strong”, primarily driven by the electronics industry, and the company will continue to work with the industry to provide sustainable production at required industry levels.At Greenbushes mine, in the South West of Western Australia, tantalum production for the quarter was 192,547 Ibs., a record for the operation.At the Wodgina mine, located in the Pilbara, tantalum production for the quarter was 146,403 Ibs., also a record for the operation.
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