Tin Market - 2012

Press/Media: Press / Media

Description

A review of the market for tin as at 2012

Period1 Mar 2012

Media contributions

1

Media contributions

  • TitleTin - 2012
    Degree of recognitionNational
    Media name/outletResourceStocks Magazine - Aspermont
    Media typePrint
    Duration/Length/Size1 page
    CountryAustralia
    Date1/03/12
    DescriptionTin is the highest-priced of the mainstream London Metal Exchange metals, often vying for that informal title alongside nickel. Despite tin’s high price however, the soldering metal is far less well known among the Australian investment community than is nickel. This is perhaps surprising, as Australia, and in particular Tasmania, remains significant on the world stage of tin supply – and is well set to achieve further prominence in future as new projects are developed.

    Metals’ X (MLX) Renison mine, although now a mature underground mine, still produces 6,000 tonnes per annum, with plans to lift annual production to 8,000 tonnes. These numbers sound modest – but are still material on a global stage as tin is still a relatively small market despite being a widely used commodity. Tasmania is not going to stop producing tin anytime soon – with the world’s largest tin producer, Yunnan Tin of China, a co-owner of Renison with Metals X. Yunnan Tin produces over 50,000 tonnes of tin per annum across its suite of mines.

    The global refined tin market sits around the 365,000 tonnes mark for annual metal production – so think of the world producing - and also consuming - about 1,000 tonnes of tin each and every day. China is both the world’s largest consumer and largest producer of tin, with SW China’s Yunnan province a key production centre.

    Tin demand, if you will excuse the pun, ‘solders on’ – although at the detailed level, consumption is split across several end use sectors, not simply solder – with electronic and industrial applications for the metal expanding. Indeed, tin’s use as solder comprises only just over half the total consumption of the metal.

    Tinplate, chemicals and brass/bronze make up the balance of demand along with a plethora of minor uses.

    Although the highest-priced of the main-board LME metal contracts (at around US$24,000 per tonne at the time of writing), tin is also the smallest of the principal London Metal Exchange non-ferrous metal contracts (less than one quarter of the size of the nickel market for example). Most investors will track the LME tin price – although the Kuala Lumpur Tin Market also serves as a pricing reference point in some Asian markets – with Malaysia a major tin producer.

    Prices peaking at over US$30,000 per tonne in 2011 were well above recent historic levels – reflecting a lack of new investment in supply development over the past decade- although all-time highs in inflation-adjusted terms were over $40,000/tonne in the early 1980s.

    China, Indonesia, Malaysia, Bolivia and Peru lead the geographic field in terms of global tin production. Aside from Yunnan Tin, referred to above, Yunnan Chengfeng and China Tin are also significant Chinese producers at around 15,000 tonnes per annum each. Indonesia is host to the world’s second largest integrated producer, PT Timah and Malaysia Smelting Corporation ranks third in terms of production, alongside Minsur of Peru, both producing ~35,000 tonnes per annum. Thaisarco of Thailand and EM Vinto of Bolivia are also significant producers on a world-scale at around 20,000 tonnes and 10,000 tonnes per annum respectively.

    Tin is unusual among the LME metals in that small scale mining by private operators, such as in Indonesia – but also in Central Africa, is a significant contributor to overall metal supply.

    Cassiterite (SnO2) is the main ore mineral, found either as primary deposits in veins or lodes else in reworked secondary deposits known as alluvials. Hardrock deposits are worked typically as underground mines whereas alluvial deposits are dredged and pumped to recover the ore.
    Alluvial deposits can be economic at lower grades than hard-rock vein-style deposits due to lower mining and milling costs. Alluvial grades below 0.5 per cent are common whereas underground hard-rock mines have historically required grades exceeding 1% tin. However with the rise in prices in recent years, hard-rock mines with grades as low as 0.4% become potential mines especially if there are valuable co-products or by-products.

    Processing is first to tin concentrate by gravity concentration and flotation and then via smelting and refining to final metal of LME grade. Tin concentrate producers receive over 90 per cent of the metal value for the tin contained in concentrate (high than many metals and comparable to copper).

    The ASX has a raft of potential tin producers looking to develop mines in Australia including Venture Minerals (VMS), Consolidated Tin Mines (CSD) and Outback Metals (OUM). Minemakers (MAK) also hold tin (and tungsten) assets and Kasbah Resources (KAS) is advancing towards production in Morocco.

    Tin sector research specialists ITRI (International Tin Research Institute) take the view that additional new mine supply is required in tin in the next 3-5 years to meet demand-side growth and replace gradual mine depletion.
    Producer/AuthorAllan Trench
    PersonsAllan Trench

Keywords

  • tin
  • mining