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A brief look at Tantalum supply from Africa

On the global seen, big tech companies such as Apple, Microsoft and Sony are feeling the impact of what is called “Chip shortage”. Put simply, Chip shortage occurs when the global demand for semiconductor chips exceeds the existing supply capacity. One of the factors contributing to Chips Shortage is a reduction in supply of the raw materials used to create these microchips. One of such raw materials is called Tantalum.

Tantalum is a rare and crucial component used in creating next gen semiconductors. Its properties allow electronics manufacturers to produce chips of increasingly greater information densities. It is estimated that Africa produces more than 70% of the worlds supply of Tantalum. Like the Blood diamonds of Sierra Leone, Tantalum is classed as a conflict resource in Africa.

Tantalum mining has been growing in significance over the past decade in Africa. Chinese investment in natural resource has helped open new mines in Africa and create infrastructure that has enabled them to be more productive.

Many companies on the continent work as subcontractors to many global firms operating in their countries, which include Intel and Taiwan Semiconductor Manufacturing Company (TSMC), who are the major players in the world supply of semiconductors.

Two major mining operators in Africa, Vedanta and Anglo American provide almost all of the raw materials needed for the tantalum industry.

Both companies operate mines in Southern Africa: Vedanta’s Luleå Titanium Mine, located in northern Sweden and Anglo American’s Ekati Mine in Northern Canada.

Tantalum is also a vital component for the global automotive industry, accounting for half of the world's tantalum production. The automotive sector uses more than 50% of the global tantalum consumption.

Shortage of Tantalum

The shortage of Tantalum is attributed to significant supply growth in the Asia Pacific region. This growth is attributed to demand from the smartphone industry, which is by far the largest electronics industry in the world. According to TechRadar, during the first half of 2018, the global smartphone market saw 2 million more smartphones being sold than in the first half of 2017. Despite the very rapid increase, the demand for smartphones has not been able to keep up with the rapid supply growth. To compound things further, one of the largest single source of tantalum ore, the Kombat mine in Northern Namibia, closed down in 2015, sending global prices to astronomical levels.

Ethical production of Tantalum in Africa

The mining sector in Africa has enormous potential, but is fraught with challenges and ethical dilemmas. For decades, cheap supplies of tantalum derived from mines under the control of rebel groups based in the north-eastern regions of the Democratic Republic of Congo (DRC) have flowed into the supply chain of Tantalum.

The processing of raw materials to create finished goods in the industrialised world is linked to the availability of high quality and cheap raw materials, such as raw materials needed for the electronics industry, like Tantalum. As long as organisations within the tantalum supply chain, especially those upstream keeps quiet, they are also complicit in crimes committed by these rebel groups.

All five African countries supplying tantalum in large quantities to the global market - Uganda, Botswana, DRC, Namibia, and Zambia - are also among the world’s poorest countries. For instance, Botswana is Africa’s second smallest economy after Mauritius.

Upstream organisations such as Apple, Samsung and Sony that use Tantalum in their manufacturing process can alleviate poverty in these African countries, by establishing manufacturing hubs in these countries.

Safety and logistics, can no longer be an excuse presented by these organisations. If they train and use the local work force in these African countries, they would easily address most of these issues or excuses. These organisations only seem to care about getting high quality raw materials through the supply chain for cheap, without thinking about how the initial raw materials were sourced.

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