Talison Suspends Operations at Largest Tantalum Mine

By Jason Scott

Nov. 26 (Bloomberg) -- Talison Minerals will suspend mining at the world’s largest tantalum operation in Australia as the global financial crisis reduces demand for consumer electronics.

The halt from next month of the Wodgina mine, which supplies 30 percent of the world’s tantalum, will result in 200 job losses, the Perth-based, closely-held company said today in a statement on its Web site. The metal is used in mobile phones, digital cameras, gaming consoles and computers.

Retail sales in the U.S., the world’s largest economy, have plunged as the credit crunch pushed consumer confidence near to record lows. Global mobile-phone sales will fall next year, the first drop since 2001, researcher Gartner Inc. said yesterday.

“The recent global financial crisis has seen a severe downturn in worldwide demand for consumer electronics,” the statement said. “As a consequence, Talison’s customers have sufficient tantalum for the near future and have not needed to extend their current contracts.”

Illegal mining of the metal in Africa, particularly in the Democratic Republic of Congo, has also hurt prices, undermining the Australian company’s competitiveness, Talison said.

“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 labor conditions,” it said. “Revenue from tantalum mining activities in the DRC is reportedly used to fund militias involved in the ongoing civil war in the northeast of the country.”

Gwalia Legacy

Talison’s mine at Wodgina, 100 kilometers (63 miles) south of Port Hedland in Western Australia state, will be suspended from early December, it said. The company was founded in 2007 after a group of investors bought the tantalum and lithium operations of Sons of Gwalia Ltd., which collapsed in 2005.

Talison’s lithium mining and processing operations at Greenbushes, 250 kilometers southeast of Perth, are unaffected.

Sony Electronics Inc. President Stan Glasgow said Nov. 20 that the economic situation was “probably more challenging than anything I’ve seen.” Electronics and appliances sales in the U.S. fell 22 percent in the first half of November, according to data from MasterCard Advisors’ SpendingPulse service.

To contact the reporter on this story: Jason Scott in Perth at Jscott14@bloomberg.net