Softening global demand has prompted Global Advanced Metals to close its Wodgina tantalum mine in the Pilbara less than a year after it was reopened.
The miner will suspend operations at Wodgina, which employs about 70 GAM staff, from the end of next month.
"Worldwide softening tantalum demand and delays in receiving Governmental approval for installation of necessary crushing equipment are among contributing factors in this decision," a GAM spokesman said last night.
"GAM will continue production at its Greenbushes plant, processing ores from Wodgina, Greenbushes and Mt Cattlin mines into concentrate to meet existing internal and external customer demand.
"The company will resume mining of tantalum ore when market conditions are appropriate. In the meantime, GAM is progressing with approvals and construction of a new high-capacity crushing facility at Wodgina."
GAM said the closure would not affect its processing operations in the US and Japan, which receive raw materials from other sources. Likewise, the move is not expected to have a negative impact on iron ore miner Atlas Iron, which has an existing infrastructure sharing agreement with GAM that will stand.
GAM reopened Wodgina last year, having put it on care and maintenance at the height of the global financial crisis.
Prices for tantalum had spent years in the doldrums, thanks to a flood of supply of so-called blood tantalum, mostly from the Democratic Republic of Congo. However, efforts to clamp down on the illegal supply saw contract prices for tantalum more than double in the years between 2008 and 2011.
Tantalum is used in capacitors and circuit-board connectors and as an additive in nickel-based alloys. About half the global demand comes from the electronics industry and the rest from the aerospace and chemical sectors.
The Wodgina news came on the same day GAM completed its $US400 million ($379 million) acquisition of the tantalum processing arm of Cabot Corp. The move will allow it to process tantalum pentoxide into advanced products, such as the powder that goes into the capacitors used in iPods.