In Strong Tantalum Market, Noventa Exceeds Targets at Mozambique Mine

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Researched by Industrial Info Resources (Sugar Land, Texas)--Within a week of tantalum-mining company Noventa Limited's (LSE:NVTA) (St. Helier, Jersey) announcing that it had made the first shipment of tantalum concentrate to Asia from the Marropini mine in Mozambique, the company announced what sources described as a "significant additional deposit" of tantalum in the Marropini license area.

The shipment to Asia was achieved earlier than scheduled, as a result of production levels that were higher than anticipated after mining commenced in April. The 8,000-kilogram shipment in August will be followed by a second shipment in October. In July this year, Noventa reported 51% tantalum recovery at the mine, which was well up from the rates before May 2009, which were between 30% and 35%.

As a part of a strategic plan announced earlier this year, the company has targeted an annual production rate at Marropino of more than 500,000 pounds of tantalum pentoxide (Ta205) per year in 2010-11. This will represent a 70% increase over production at the commencement of operations. As part of the strategy to become the global low-cost tantalum-mining leader, Noventa will also upgrade the capability and infrastructure at the Marropino facilities to handle material from the company's sites at Mutala, Morrua and other adjacent locations.

The August shipment was made through the Mozambican port of Quelimane, which although 350 kilometers away from the mine, is the closest port to the project and presents overall land- and sea-route benefits compared to the alternative of overland delivery to Namibia's Walvis Bay on the southeast coast of Africa.

Eric Kohn, a nonexecutive chairperson at Noventa, said that he was delighted that the company had begun shipments to their two key customers. "I am also especially pleased that we have been able to meet our stated objective to use a Mozambique port. This not only shortens our logistic tail, but also provides welcome support to Mozambique's growing infrastructure," he said.

The new deposit discovery is in an area of about one square kilometer, two kilometers to the southeast of the existing mine, and is part of Project Ligonha, which the company announced in June. The discovery is undergoing independent assays and a sampling program that will accurately define the shape, potential tonnages and grades of the discovery, which could extend the life of the Marropino mine and provide up to 12 months of supply at the expanded production rate, according to Kohn.

There is a renewed buzz in the tantalum market, as the metal's post-recession price moves upward. Tantalum is a key substance for the electronics and high-tech industries as it is essential in manufacturing capacitors for mobile phone motherboards and a range of audio and video equipment. Tantalum consumption could exceed supply next year.

This market upturn could see what was the world's largest tantalum mine, the Woodinga mine in Pilbara, Western Australia, reopening after being closed in 2008, as the global recession hit. A 110% rise in spot prices since December 2009, from $38 per pound to $80 per pound in July, is increasing the prospects of the mine's restarting. The mine previously supplied up to 30% of global demand.

Illegal mines in the Democratic Republic of Congo, which are estimated to supply up to 35% of global tantalum, could feel a market chill from a bill passed in the U.S. that requires manufacturers to identify the sources of their input materials. This would identify "conflict tantalum" in the same way as "conflict diamonds" and would heavily curtail market access and production.

Noventa will continue mapping and exploring in Mozambique's Zambesia province and is looking to bring the Mutula resource into production by 2012 and the Morrua resource into production not later than 2015, with both sites leveraging off the existing infrastructure of Marropino.

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