The tantalum market will remain well-supplied for the time being, according to market research. A key characteristic of the tantalum industry in recent years has been that supply has nearly always been greater than demand. As a result, large material inventories have been built up at most levels of the supply chain, generally as a result of take or pay contracts set up in the early part of the decade.

Unable to win the large increase in prices it needed to be economic, the world' s largest primary producer suspended mining operations in late 2008. It was soon followed by two others. Within the space of a few months, close to 40% of global primary tantalum capacity was taken out of the market. There are no guarantees as to when, or even if, it will be brought back into production. However, the stocks are not inexhaustible

Numerous new tantalum-niobium projects are in the pipeline and several would be very large producers. The big question is when they will come on-stream. Of the three mega-projects, one was originally planned to come into production in 2006, while another has been held up for over two years by red tape. The third may come into production in 2011.

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