GF SEC: Tantalum metal supply bottleneck remains difficult to resolve; demand benefits from the strong AI industry boom.

GF SEC released a research report stating that on the supply side, global tantalum supply is currently highly dependent on artisanal mining in African countries such as the DRC and Rwanda, resulting in weak production stability, and a large number of potential new projects remain in the exploration or feasibility study stage, making it difficult to supplement supply in the short term. On the demand side, continuously increasing capital expenditure in the AI sector continues to drive demand for AI-related tantalum capacitors, and the strong downstream prosperity is expected to support an upward shift in the central level of tantalum consumption. Therefore, the bank believes that supply and demand in the tantalum industry will continue to tighten and support rising tantalum prices. GF SEC's main views are as follows: A scarce, refractory, and critical strategic minor metal Tantalum has an extremely low crustal abundance (only about 1-2 ppm) and features a high melting point (2,980C), strong corrosion resistance, and excellent dielectric properties. In terms of resource distribution, global proven reserves are highly concentrated in Australia and Brazil (together accounting for more than 90%), but constrained by associated mining and high costs, supply release in Australia and Brazil is slow. Although core African production areas such as the DRC and Rwanda contribute nearly 80% of global output, they are mostly based on surface weathered placer deposits and artisanal and small-scale mining (ASM), with scarce standardized proven reserves that meet international standards, resulting in highly unbalanced overall resource endowments and severely insufficient proven resources. Supply side: Frequent geopolitical disruptions, limited potential new capacity Africa's artisanal mining model determines that its supply chain is highly fragile and opaque. In January and March 2026, the Rubaya mining area in the DRC, which accounts for about 15% of global supply, suffered large-scale collapses and full production halts, causing a sharp expansion of the global supply gap and driving tantalum prices higher. Non-African production areas are likewise unable to provide supply elasticity: hard-rock tantalum mines in Australia are mostly associated with lithium mines, and high mining costs combined with disruptions in the lithium cycle have caused capacity release to lag severely behind its reserve position. Brazil, as the second-largest supplier, has seen production decline significantly in recent years from its peak. China's resources are mostly low-grade, difficult-to-process lean ores, and its external dependence also remains high. Judging from the progress of new global projects, more than half of the world's tantalum mining projects are still in the early exploration or feasibility study stage, and mine development cycles are generally long, making it difficult to form effective large-scale supply in the short term. Demand side: AI demand opens a new round of prosperity cycle The largest downstream consumption area for tantalum is tantalum capacitors (accounting for 33%). Due to surging power consumption and higher transient power supply response requirements, AI servers are driving simultaneous increases in the usage and value of polymer tantalum capacitors per unit, with leading manufacturers such as Yageo and KEMET achieving high performance growth and continuously raising product quotations, while on the raw material side domestic tantalum powder exports continue to maintain substantial growth. In addition, the jump in the share of wafers at advanced process nodes below 28nm is driving rapid volume growth in tantalum targets used for copper interconnect barrier layers in semiconductors, and together with demand for tantalum used in high-end nickel-based superalloys driven by aero engines and industrial gas turbines, the strong prosperity of the AI industry is expected to support an upward shift in the central level of tantalum consumption. Risk warning. Risks of macroeconomic fluctuations, risks that downstream application progress falls short of expectations, and risks that the pace of capacity release on the supply side exceeds expectations.