Bromby: Bolivia to its lithium promise, add that other technology metal — tin

victory-project-locations-lgBolivia in the 19th century saw riches flow from silver. In the 20th century, or at least part of that, the great wealth creator was tin. Now, as we have previously reported, lithium is the great hope of the early 21st century as attempts will be made to reap the rewards of Bolivia’s brine lakes. But tin could be making a comeback, too.

In the city of Cochabamba, said to be the most pleasant of the country’s cities, there is open to the public a rather over-the-top mansion. It was built by the man known as the Tin King, or The Andean Rockefeller. And there are plans to revive the operations at what was known as the Siglo XX (20th Century) mine, once owned by Simon I Patiño, one of the world‘s first billionaires, with that wealth all generated by tin.

South American Tin, a company run by Australian mining engineer John Kelly, is backdoor listing Siglo XX and other tin projects into a tiny Australian explorer, Victory Mines (ASX:VIC), whose shares trade at A0.5c. Kelly says he hasn’t finished assembling the package of Bolivian properties, but he says it will be the world’s largest tin project — echoes of Patiño who once controlled not only 60% of Bolivia’s tin output, but controlled Malayan smelters too. At one stage, Siglo XX was providing half the world’s supply of tin.

Patiño died in 1947 at the Plaza Hotel in Buenos Aires. He got into the tin business in 1905; the accounts differ as to how this came about but his obituary in The Wall Street Journal said Patiño was a clerk in a Bolivian store and, when a Portuguese tin prospector could not pay for the dynamite he needed, the clerk guaranteed the debt. When the prospector could not find tin, he handed over the prospect to Patiño in settlement. Well, that’s one version.

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Of course, the Bolivian found the tin, one of the world’s richest veins, and on that his fortune was based. He made enormous sums in the First World War with Britain buying large quantities of tin. By 1924 he was able to list his Patiño Mines & Enterprises Consolidated on the New York Stock Exchange, a company valued at the time at $29 million.

In 1933, the Los Angeles Times ran a large feature on the Bolivian tin magnate under the headline “A Man To Whom You Pay Cash Tribute Every Day”. The second deck of the headline read “If you use canned food, smoke cigarettes, wear silk stockings, own a gun or mirror, you’re using his product”. Tin, of course, lined food cans, but it also was the basis of the tinfoil lining cigarette packets (and chocolate wrappers), while salt of tin went into silk stockings.

Patiño was so powerful he demanded to be made ambassador to France (where he bought a mansion on Avenue Foch (the Arc de Triomphe is at one end, so it’s one of the top parts of Paris).

In the Second World War, it was the Americans who turned to Bolivia for tin (the U.S. then mining just a tiny amount, and its supplies from Malaya and Netherlands Indies, now Indonesia). Bolivia was a vital player. In early 1939 Bolivia sought help from Germany in operating the oil fields that had been confiscated from Standard Oil, and Berlin had offered large credits to La Paz in return for all the oil to be produced. A German team was also sent to Bolivia to work out a barter arrangement with Bolivia supplying key raw materials in return for German weaponry.

As war with Japan — and, therefore, Germany — neared in July 1941, the Americans felt they were getting ambivalent messages from La Paz. The Germans still had strong connections inside the Bolivian army; during the 1932-35 Chaco war with Paraguay, Bolivian forces had been helped by German instructors. Yet the civilian government was much more amenable to the Allies, as evidenced by the takeover of Lloyd Aereo Boliviana, the German airline operating domestic services in Bolivia. Eventually Bolivian came over to the Allied side and tin flowed to American factories.

Patiño’s mines were expropriated in 1952 by the Bolivian government. Then in 1987, due to the collapse in the tin price, Siglo XX was closed by its owner, the state-owned mining company, the mine’s production costs being three times the tin price.

Now South American Tin, and Victory Mines, plans to revive Bolivia’s tin industry. So, as you follow this story on Investor Intel, you will know the background as to Bolivia’s great tin history — and its potential to once again be an important player in this technology metal. The Bolivian tin mines will, as well as providing the lining of food and beverage cans, also produce a product most of us use every day — as in almost every electronic item in our homes and offices.

***

Thanks to South American Tin, here’s a list of the major Bolivian mining players:

  • * Coeur Mines (TSX and NYSE): It owns San Bartolomé, the world’s 8th largest silver mine (2012 output was 5.9 million ounces.
  • Pan American Silver (TSX): San Vincenté silver-lead-zinc mine. 2013 production of 3.8 million ounces of silver, 550 tonnes of lead and 6,000 tonnes zinc.
  • Sumitomo: San Cristobel silver-lead-zinc mine.
  • Orvana Mines (TSX): Don Mario gold-copper-silver mine.
  • Glencore (LSX): Operates three tin and zinc mines. Glencore’s mineral trading arm also operates in Bolivia.
  • LionGold Corp (SGX in Singapore): Announced development of the 1.8 million ounce Amayapampa gold mine.

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Robin Bromby

About Robin Bromby

Robin Bromby is a journalist, author and sometime publisher who has had titles issued by mainstream publishers, including Doubleday, Simon & Schuster and Lothian Books. Robin began as a cadet journalist in 1962 with The Dominion, the morning paper in Wellington, New Zealand. He also worked for the NZ Broadcasting Corporation, TV1, the South China Morning Post, The Herald (Melbourne), the Sunday Times (Wellington), The National Times (Sydney) and, since 1988, he has been first a staff reporter and now columnist for The Australian and has been a Senior Editor for InvestorIntel since the onset.
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