Gippsland Limited
www.gippslandltd.com
www.gippslandltd.com
Gippsland focuses on world-scale projects which have been over-looked by major resource groups. Projects which have undergone detailed exploration and which have the potential to be brought into production quickly are a prime target for the Company. Gippsland's success in this area is due in part to the Company's philosophy of entering into equitable joint venture arrangements with overseas nationals. The Company's prime assets are the 40 million tonne Abu Dabbab and the 98 million tonne Nuweibi tantalum-tin projects located in the Central Eastern Desert of Egypt, adjacent to the western shore of the Red Sea.
Talison Minerals closes Wodgina Mine. So what?
Companies have closed bigger mines! Xstrata closed its Falcondo mine, North American Palladium closed its Lac des Iles Mine in Thunder Bay and Teck Cominco announced its plans to close Pend Oreille Mine. Falling metal prices, financial constraints or adverse political environments as in the case of Anvil Mining could prompt companies to close mines. Then what is so special about Wodgina?
Formerly owned by the Australian mining company Sons of Gwalia, Wodgina mine is the world’s largest tantalum operation which supplied over 30 percent of the World’s tantalum demand in 2008. Tantalum is widely used in the production of electronics capacitors, and finds its way into cell phones, DVD players, personal computers, digital cameras, gaming platforms, LCD monitors and wireless devices. In other words, tantalum keeps us entertained, productive and connected. Tantalum is also used to make super alloys for jet engines, turbines, space vehicles, nuclear reactors, power plants and cutting tools.
Diverse may be its applications but not supply sources. Tantalum supply comes from primary sources such as mining operations, as well as secondary sources such as recycled material, processor inventories, tin slags from old dumps containing low percentage material and the United States’ Defence Logistics Agency (USDLA) stockpile. Much of the tantalum from primary sources reportedly comes from Australia with Africa, Brazil, Asia and Canada accounting for the remainder. Primary and secondary sources account for 70% and 30% of the tantalum supply respectively.
A vast majority of the primary raw materials derives from one source; Talison Minerals’ Wodgina mine in Western Australia. That makes its closure a matter of concern. It also makes the development of alternative tantalum supply sources out side China a matter of priority. Companies engaged in that exercise are few and far between as tantalum deposits with the ability to host an economic operation are considerably rare.
According to Talison, the closure was prompted by a worldwide decline in demand for consumer electronics precipitated by the global financial crisis and the consequent economic down turn. The consequent reduction in tantalum consumption by end-users has left sufficient stockpiles among them thus causing tantalum prices to weaken. Talison expects Wodgina closure would help revive tantalum prices.
Then there is this small mater of blood tantalum, derived from the ill-famed “blood diamonds”. Similar to diamonds, a considerable proportion of tantalum supply apparently comes from countries such as the Democratic Republic of Congo (DRC) which reportedly uses revenue from tantalum sales to fund militias involved in the ongoing civil war in Goma. According to Talison, some customers from countries such as China are buying tantalum at knock down prices from the DRC. Talison claims that Wodgina closure was also prompted by the practice of buying tantalum from countries with dubious human rights records.
Talison’s main customers such as Stark and Cabot do not source their tantalum requirements from the DRC and the closure would place them in considerable difficulty. All tantalum users will now be forced to seek other alternatives such as China, which has so for not been the most reliable tantalum source. They may also be forced to seek supplies from the United States’ Defence Logistics Agency (USDLA) stockpile. Recycled tantalum as a supply source has proven to be less reliable, as it is becoming increasingly difficult to separate tantalum capacitors from miniaturised integrated circuit board chips.
There are bans already in place against sourcing tantalum from the DRC. For instance, there is a ban by the United Nations against the use of tantalum from the Lake Kivu area of the DRC. Regrettably, some end-users pay little attention to such matters as UN bans. With main consumers such as Stark and Cabot remaining committed to their policy of not sourcing tantalum from Central Africa, the impact of Wodgina closure will soon be felt and reflected in tantalum prices.
If one pays attention to these developments, companies such as Toronto listed Commerce Resources Corp. (CCE), London listed Tertiary Minerals PLC (TYM) and Australian listed Gippsland Limited (GIP) would prove to be compelling investment opportunities. All three companies have exploration and development stage projects and have been involved in this niche market for several years.
With properties located in close proximity to the key US market, Commerce Resources has all ingredients to be one of the main tantalum suppliers to the market. The company has approximately 29 million tonnes of indicated and 24 million tonnes inferred resources (NI 43-101 compliant). Commerce Resources is on full throttle in its development endeavours and is unfazed by the market turmoil. Flush with cash from previous financing rounds, a significant exploration and development programme is currently underway at its flagship Upper Fir deposit of its Blue River Tantalum/Niobium Project.
Gippsland Limited has two assets in Egypt namely, the 40 million tonne Abu Dabbab and the 98 million tonne Nuweibi tantalum-tin projects located in the Central Eastern Desert of Egypt. Having completed an Environmental Impact Assessment report, the company is presently negotiating project financing to advance the Abu Dabbab project.
Talison’s decision would invariably increase tantalum prices in the market. While it takes only weeks to close mines it takes months to re-open them. May be it is bad news for Talison customers but rising tantalum prices in the face of curtailed supply and start up delays would underpin valuations of tantalum companies.
Formerly owned by the Australian mining company Sons of Gwalia, Wodgina mine is the world’s largest tantalum operation which supplied over 30 percent of the World’s tantalum demand in 2008. Tantalum is widely used in the production of electronics capacitors, and finds its way into cell phones, DVD players, personal computers, digital cameras, gaming platforms, LCD monitors and wireless devices. In other words, tantalum keeps us entertained, productive and connected. Tantalum is also used to make super alloys for jet engines, turbines, space vehicles, nuclear reactors, power plants and cutting tools.
Diverse may be its applications but not supply sources. Tantalum supply comes from primary sources such as mining operations, as well as secondary sources such as recycled material, processor inventories, tin slags from old dumps containing low percentage material and the United States’ Defence Logistics Agency (USDLA) stockpile. Much of the tantalum from primary sources reportedly comes from Australia with Africa, Brazil, Asia and Canada accounting for the remainder. Primary and secondary sources account for 70% and 30% of the tantalum supply respectively.
A vast majority of the primary raw materials derives from one source; Talison Minerals’ Wodgina mine in Western Australia. That makes its closure a matter of concern. It also makes the development of alternative tantalum supply sources out side China a matter of priority. Companies engaged in that exercise are few and far between as tantalum deposits with the ability to host an economic operation are considerably rare.
According to Talison, the closure was prompted by a worldwide decline in demand for consumer electronics precipitated by the global financial crisis and the consequent economic down turn. The consequent reduction in tantalum consumption by end-users has left sufficient stockpiles among them thus causing tantalum prices to weaken. Talison expects Wodgina closure would help revive tantalum prices.
Then there is this small mater of blood tantalum, derived from the ill-famed “blood diamonds”. Similar to diamonds, a considerable proportion of tantalum supply apparently comes from countries such as the Democratic Republic of Congo (DRC) which reportedly uses revenue from tantalum sales to fund militias involved in the ongoing civil war in Goma. According to Talison, some customers from countries such as China are buying tantalum at knock down prices from the DRC. Talison claims that Wodgina closure was also prompted by the practice of buying tantalum from countries with dubious human rights records.
Talison’s main customers such as Stark and Cabot do not source their tantalum requirements from the DRC and the closure would place them in considerable difficulty. All tantalum users will now be forced to seek other alternatives such as China, which has so for not been the most reliable tantalum source. They may also be forced to seek supplies from the United States’ Defence Logistics Agency (USDLA) stockpile. Recycled tantalum as a supply source has proven to be less reliable, as it is becoming increasingly difficult to separate tantalum capacitors from miniaturised integrated circuit board chips.
There are bans already in place against sourcing tantalum from the DRC. For instance, there is a ban by the United Nations against the use of tantalum from the Lake Kivu area of the DRC. Regrettably, some end-users pay little attention to such matters as UN bans. With main consumers such as Stark and Cabot remaining committed to their policy of not sourcing tantalum from Central Africa, the impact of Wodgina closure will soon be felt and reflected in tantalum prices.
If one pays attention to these developments, companies such as Toronto listed Commerce Resources Corp. (CCE), London listed Tertiary Minerals PLC (TYM) and Australian listed Gippsland Limited (GIP) would prove to be compelling investment opportunities. All three companies have exploration and development stage projects and have been involved in this niche market for several years.
With properties located in close proximity to the key US market, Commerce Resources has all ingredients to be one of the main tantalum suppliers to the market. The company has approximately 29 million tonnes of indicated and 24 million tonnes inferred resources (NI 43-101 compliant). Commerce Resources is on full throttle in its development endeavours and is unfazed by the market turmoil. Flush with cash from previous financing rounds, a significant exploration and development programme is currently underway at its flagship Upper Fir deposit of its Blue River Tantalum/Niobium Project.
Gippsland Limited has two assets in Egypt namely, the 40 million tonne Abu Dabbab and the 98 million tonne Nuweibi tantalum-tin projects located in the Central Eastern Desert of Egypt. Having completed an Environmental Impact Assessment report, the company is presently negotiating project financing to advance the Abu Dabbab project.
Talison’s decision would invariably increase tantalum prices in the market. While it takes only weeks to close mines it takes months to re-open them. May be it is bad news for Talison customers but rising tantalum prices in the face of curtailed supply and start up delays would underpin valuations of tantalum companies.
