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Mining
It’s used in virtually every item of consumer electronics and a key element of the transition from hardware to the cloud and gas guzzlers to electric vehicles.
But amid the focus on copper, nickel, cobalt, lithium and graphite, tin has a habit of slipping under the radar.
The old world metal once mined in pegmatite deposits now picked apart for their lithium — including the globe’s biggest hard rock lithium project Greenbushes in WA’s South West — is back on the radar of investors after an eye-catching price rise of over 10% on Monday night.
The cause? A call to halt mining from the end of July in the autonomous Maoist Wa State (not the WA our mining types are most familiar with) in politically fraught Myanmar.
That could strangle as much as 10% of global tin concentrate supplies and hamstring China, producer of half the world’s refined tin.
Unlike its dominance in other commodities like rare earths, China only mines around 30% of the world’s tin concentrate. Commonwealth Bank mining expert Vivek Dhar says 77% of its imports are sourced from Myanmar, a number that was higher before it diversified into the DRC, Australia, where China’s Yunnan Tin owns half of the Renison Bell tin mine, and Nigeria.
Having closed on Friday at US$24,853/t, LME tin prices for three month delivery surged to US$27,367/t overnight Monday.
While shy of the US$32,262/t peak hit in late January when political protests forced the closure of Minsur’s San Rafael Mine in Peru, host to 9% of global raw material supply, it is trading far above 2023 lows of US$22,218/t.
Tin is a metal essential to electronics and electrification. Around half of demand in the ~400,000tpa tin market comes from its use in lead-free electronic solder on circuit boards.
The 22,000tpa solar tin market is forecast by the International Tin Association to rise to 55,000tpa by 2030. Another 10,000tpa will come from EVs and another 10,000tpa from the expansion — conspiracy nuts aside — of 5G networks.
There is little visibility on new sources of tin that could service this added demand, while existing operations in various jurisdictions continue to be challenged by technical and political issues.
Dhar says there is every chance the United Wa State Army, which controls the tin rich state and wants to sideline around 10% of global tin concentrate supply including three-tenths of Chinese imports, will not carry out its threat.
“It is still unclear whether the Wa state will follow through with its announcement to suspend tin mining operations. Tin mining is a key revenue source for the region and Wa state has reportedly made similar announcements to suspend mining in the past without following through,” he said in a note yesterday.
“The recent rise in Shanghai Futures Exchange (SHFE) stockpiles of refined tin (5.5‑6.0x since the start of October 2022 to over 9kt or ~3% of global demand) is also likely to give a buffer to any disruption to tin mining in the Wa state in Myanmar.
“The ex‑China market is more vulnerable to supply shocks, particularly in light of declining LME stockpiles of refined tin.”
Tin may not threaten the US$50,000/t highs it saw early last year. However, the bigger picture for tin supply is bleak.
“Global tin demand is likely to be challenged this year with weakening growth in advanced economies and signs that pent‑up commodity demand in China is fading. The suspension of tin mining in the Wa state will tighten tin concentrate markets,” he said.
“However, given the tepid demand outlook, China’s refined tin stockpiles and doubts that Wa state will follow through with its announcement, it is unlikely that tin prices will threaten highs from early 2022.
“Over the medium term, there are good reasons to worry about a shortfall. Tin is one of the most exposed metals to new economy sectors like electric vehicles, advanced robotics, renewable energy and advanced computation.
“Underinvestment in tin supply for a number of years has meant the tin sector is ill‑prepared to meet any meaningful leap in demand.”
Despite its importance to the key technologies of the future, tin’s absence from Australia’s official critical minerals list is a notable one.
Venture Minerals (ASX:VMS) MD Andrew Radonjic, whose explorer owns the advanced Mount Lindsay tin and tungsten project on Tasmania’s west coast says there is a need for prices to catch up to demand to support new sources of supply.
“We keep on talking about critical minerals and EVs and all that,” he said.
“Tin’s right in there. Anything that’s got electronic circuitry needs solder, that’s the glue that joins everything together.
“Everything points to that very well. There’s been a lot of tin companies trying to develop assets and they’ve been struggling because of where the prices are.
“They just can’t make a profit that’s sustainable that traditional financiers would support you really need probably at a US$40,000/t level or more.”
The economics of tin and the small quantities in which it is used in consumer items mean it is less price sensitive on the demand side than metals like nickel, copper and cobalt.
Radonjic notes Apple would only need to increase iPhone prices by 10c to recoup the cost of tin hitting US$100,000/t, double historic highs.
China has leveraged its relationships in Myanmar and Indonesia to secure tin supplies, something that could give rise to similar concerns as those held by Western governments over its control of rare earths for EVs and wind turbines.
“If China is going to try and control tin as a proxy by gaining access to all the tin in Indonesia, then that’s 70% of the world’s tin, it becomes like a rare earth almost,” Radonjic said.
“Very much tin needs to be on the radar, it needs to be listed as a critical mineral in Australia, (as) it is much of the rest in the world.
“Without it, we don’t have anything electronic, the world stops to function how it wants to function in the future going forward.”
Venture’s shares lifted 10% as the tin price soared yesterday, as it also expanded on a rare earths strategy at exploration sites in WA.
At Mount Lindsay in Tasmania, it boasts around 80,000t of tin and 3.2 million MTUs of tungsten trioxide in resources it plans to access via a future underground mine, producing a low carbon product with ready access to Tasmania’s green hydro and wind power.
But it is also reviewing the potential to expand the scale of Mount Lindsay into a field of global significance by extracting tin and boron from skarn-hosted deposits outside the current mineral resource.
“These sorts of skarn mineral deposits are mined for boron in Russia and China, so we can apply that,” Radonjic said.
“CSIRO have done the initial work, it looked promising, we need to do more work, but if this can become a much bigger tin mine at the end of the day being able to mine most of that resource instead of a smaller component than we were originally looking at then we could have a very big significant mine.
“So Mount Lindsay will become a very interesting critical minerals project not only adding boron to the list but increasing the amount of tin we can expose in the asset so it becomes a much bigger play.”
The largest tin company on the ASX remains ~$300m capped Metals X (ASX:MLX), owner of half of the historic Renison Bell mine near Mount Lindsay in Tasmania.
Known as the Bluestone Mines Tasmania JV, the project produced around 8404t of tin in 2022, shipping to smelters in Malaysia, Thailand and China.
Stellar Resources (ASX:SRZ) is also operating in Tasmania at Heemskirk, where it completed a scoping study from 2019 with a PFS planned for later this year.
The backbone at Heemskirk is its status as the highest grade undeveloped tin resource in Australia at 7.6Mt at 1.1% Sn for 81,976t of contained tin.
Elementos (ASX:ELT) may be the most advanced of the next project developers on the ASX.
A DFS on its Oropesa project in Spain is due this year after a placement this month raised $3 million from investors to complete the key document.
“Proceeds from the Placement will facilitate the completion of Oropesa’s Definitive Feasibility Study (DFS), progress to the next phase of project approvals, and shortlisting of offtake and debt providers,” MD Joe David said this month.
“Oropesa remains one of the few globally significant tin projects that is development ready to deliver tin into significant forecast deficits in the 2020s.
“The forecast gap between tin supply and demand continues to widen, with forecast growth due to the increasing consumption of electronic equipment being met with a weak supply pipeline, Elementos is focussed on bringing this project into operations as soon as feasible.”
At Stockhead, we tell it like it is. While Venture Minerals is a Stockhead advertiser, it did not sponsor this article.
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