Global Advanced Metals, a strategically important supplier of tantalum, has been placed on the market by its parent company, Resource Capital Funds (RCF), following a series of strategic divestments of its Western Australian lithium interests.
Resource Capital Funds, which has owned Global Advanced for an extensive period, may potentially gain more than $1 billion from the sale.
Global Advanced is recognised as the world’s lowest-cost producer of tantalum — a critical mineral used extensively in the electronics, aerospace and defence industries. This comes on the back of the company’s established supply chain that extends from Western Australian mines to operations in Boyertown, Pennsylvania and Aizu, Japan.
RCF's managing director in Australia Brett Beatty highlighted Global Advanced's role as a crucial tantalum supplier, a status underscored during discussions on critical minerals between Prime Minister Anthony Albanese and US President Joe Biden.
The divestment of its lithium assets led to the companies that acquired the assets, such as Wildcat Resources, to reach billion-dollar valuations.
But having exited what became world-leading lithium mines — Greenbushes, Wodgina and Pilgangoora — Global Advanced retains the rights to tantalum extracted during the mining of lithium-bearing spodumene.
This was a strategic move where the lithium producers bear the mining costs, while Global Advanced capitalises on the tantalum by-product. This model has proved efficient, as the company contributes approximately 30% of the world’s tantalum supply.
Despite the broader market facing headwinds from monetary tightening, Beatty notes that the electronics sector is recovering, partly due to the widespread deployment of 5G technology and increased reliance on electronic devices during the pandemic.
Tantalum prices have seen fluctuations, currently trading between US$85 and US$90 per pound, down from around US$120 at the beginning of the year.
Global Advanced has evolved over the years, originally acquiring key lithium territory from the receivers of Sons of Gwalia about 25 years ago. Since then, the company has strategically divested its lithium rights, including the sale to Tianqi in 2010, and to Pilbara Minerals and Mineral Resources in subsequent years.
Beatty believes the sale of Global Advanced comes at an opportune time to provide returns to investors, having transitioned the business into a significant supplier of one of the key critical minerals space where China is not a dominant player.
Global Advanced's annual revenue from tantalum is reported to be up to US$500 million. The sale of the company follows RCF’s previous disposal of Ausenco, an engineering and consulting firm, for US$578 million in September.
Investors in Global Advanced may retain royalty streams from existing mining deals, including 0.75% of gross revenue from lithium sold at Tabba Tabba, and potentially acquire a 5% stake in Wildcat through performance-based share rights related to the project's sale.