(Yicai) Sept. 4 -- Prices of tantalum, a rare metal used mainly in electronic capacitors for smartphones, computers, and vehicles, surged in the first half, as fast-growing demand for artificial intelligence computing power collided with disruptions to African mine supply.

Tantalum prices soared 158 percent in the six months ended June 30, a much faster increase than those for tin and indium, which climbed 40 percent and 60 percent, respectively, according to data from the China Nonferrous Metals Industry Association.

The spot price of tantalum ingots was about CNY6,900 (USD1,028) per kilogram as of June 30, up from around CNY2,600 per kg at the end of last year, after coming down from CNY7,300 per kg at the end of March, which was close to an all-time record, the CNIA data also showed.

The price of tantalum ore has also risen sharply, and is now at the highest range for 25 years, at about USD220 to USD235 per pound, Shanghai Securities News reported, citing an industry source. For most of the past 15 years, the price had remained between USD70 and USD85 a pound, the person said.

Supply of the scarce metal is concentrated in a small number of African countries. The Democratic Republic of the Congo, Rwanda, and Nigeria together accounted for more than 80 percent of global output in 2024.

The Rubaya Coltan Mine in the DRC collapsed twice in January and March due to heavy rainfall and landslides, resulting in a complete shutdown, said Shi Jia, a tantalum analyst at Mysteel Group, adding that the mine’s output accounts for more than 15 percent of global tantalum supply.

Main Uses

Capacitors, sputtering targets for semiconductors, and high-temperature alloys are the three main uses of tantalum, with capacitors accounting for about a third. A traditional general-purpose server uses 30 to 50 tantalum capacitors, while Nvidia’s GB200 server uses 3,000 to 5,000, according to a brokerage research report.

AI servers mainly use organic polymer tantalum capacitors because they have much higher requirements for high frequency, high reliability, and high capacitance than traditional consumer electronics, according to Zhong Min, deputy general manager of Ningxia Orient Tantalum Industry, a firm that processes rare metals.

Orient Tantalum’s clients are mainly global high-end computing hardware manufacturers, Zhong noted, adding that the firm reported more than CNY1.5 billion (USD226 million) in operating revenue from tantalum niobium alloy products last year, up over 20 percent from 2024.

Advanced process wafers below 28 nanometers accounted for 52 percent of the total last year, up from 39 percent in 2022, driving demand for high-purity tantalum targets as chips require greater tantalum film purity and uniformity. 

Tight supply and rising demand will not change in the short term, so the price of tantalum ore and products is expected to remain high, according to analysts. If there are further disruptions, such as another mine shutdown or control disputes in Africa, prices could increase further, they noted.

Editor: Futura Costaglione