With the US National Defense Authorization Act on the cusp of being updated to include a US$900Bn defence and national security bill, the Department of Defense (DoD) has engaged in discussions with Liontown Resources, owner of the Kathleen Valley lithium project, to secure a by-product of tantalum from their operations.

The agreement hinges on amendments being finalized in the legislation, which is expected to occur before the end of 2023. The DoD intends to acquire 53klbs of tantalum concentrate (grading 30% Ta2O5) for its fiscal year that commenced in October 2023.

Tantalum's strategic importance has intensified in the eyes of many global powers. Despite the USA being a key producer of tantalum metal through supply secured from Australia, Brazil, and secondary scrap material, the country still relies on China’s metal powerhouse to fulfil domestic demand. Subsequently, the country is taking measures to ensure it fills its supply chain vulnerabilities. In 2020, the Pentagon announced restrictions on the import of refined tantalum metal from China, Russia, Iran, and North Korea, signalling a clear intention to defend its domestic value chain.

In the face of growing geopolitical risks surrounding the high-tech chip industry, the country will need to diversify its raw material supply chain to maintain its market position – one of the few critical materials where the USA has retained a significant role in the upstream supply chain.

Tantalum's exceptional resistance to corrosion and wear has made it a highly sought-after material for semiconductor applications, where longevity and thermal stability are paramount. Historically, tantalum concentrates were primarily obtained as a byproduct of tin mining and commonly associated with conflict mineral mining in Central Africa. However, the metal is also geologically associated with lithium-caesium-tantalum (LCT) pegmatite deposits, which are ramping up in their importance as a key supply of hard-rock lithium as part of the burgeoning EV battery market.

The increasing potential of hard-rock LCT projects to come to market for lithium demand has the potential to reduce supply risks around primary tantalum mining as a byproduct. Australia, with its established history of exporting tantalum from LCT operations to the US through the vertically integrated operations of Global Advanced Metals, is currently the only country showing the reported potential for by-product tantalum and is well positioned to capture more of the tantalum supply market share off the back of the growing lithium industry.

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