EDITOR: | February 12th, 2014

Tin Alert: Australian explorers ride to Tin’s rescue

| February 12, 2014 | No Comments

Australia-TinMore tin, as we pointed out Monday, has to come from somewhere. That somewhere might be Australia (which has boxed above its weight in the past: during the high tin prices of the mid-1970s to mid-1980s Australia was one of the largest tin producing countries in the world, yet it has only 3% of the world’s known resources).

As we have reported this week, tin is facing a supply crunch down the line if new mines don’t get started soon. And, as of Tuesday’s close, tin stockpiles in London Metal Exchange warehouses were at 8,815 tonnes, the lowest since March 2009.

The World Bank says we may have only 19 years left where the known resources will sustain 2013 levels of production. All those smartphones and other electronic devices have placed a big strain on tin supplies (it’s the tin solder needed in them). In its latest Global Economic Prospects report the World Bank analyses US Geological Survey figures regarding resource scarcity, that is, the years left where production can be maintain at present levels based on known resources.

Tin already goes into toothpaste and cosmetics — for the same anti-bacterial reasons that tinplate lines the inside of steel or aluminium cans. As the International Tin Research Institute (better known now as ITRI) points out, tin and zinc can be combined to heal wounds and kill bacteria. A new range of animal healthcare products is being launched in the U.S., including pet and agricultural treatments. The biggest new use for tin and zinc may be in foot-baths for treating hoof infections in dairy cows.

Two Australian companies are racing to get tin into the market — but they are both looking abroad. There’s Wolf Minerals (ASX:WLF) which this week began constructing its tin and tungsten mine in Devon, England, and Kasbah Resources (ASX:KAS) which has advanced exploration at its Morocco project, and recently expanded the resource there.

In Australia itself, the main producer is Metals X (ASX:MLX) which is partnership with a Chinese company at the historic Renison mine in Tasmania. But several new players are straining to get into the business. And more keep arriving on the scene.

This is a big reversal from the mid-1980s when the collapse of the global tin market saw most mining in Australia come to an end. As Geoscience Australia notes, the country’s only tin production in 2004, when tin prices began rising after almost two decades of collapse, was as a by-product from the Greenbushes tantalum mine in Western Australia. With that recovery, the old Tasmanian mines at Renison and Mount Bischoff were re-opened. Even now Australia produces only about 2% of world output.

In late 2011 the London-based ITRI predicted that, within five years, Australia could the main source of new tin production

As Geoscience Australia explains, “Tin exploration has restarted in the historic tin mining areas of Herberton-Mount Garnet in far north Queensland, in the northern New England region at Inverell-Emmaville and near Bourke in New South Wales and in western Tasmania, particularly at the Mount Lindsay deposit which is being explored for both tin and tungsten”.

One of the newest entrants is a company better known for its iron ore interests. Trafford Resources (ASX:TRF). But the company has found tin on its ground on Eyre Peninsula, South Australia. Intersections at the Zealous prospect included 12.3 metres at 1.1% tin, including 1.3 metres at 4.8%. This new hole, which sent Trafford shares up by 15% on the day of the announcement, was designed to intersect the extension of the first discovery hole at the deposit, which returned 7 metres at 3.2% tin, including 1m at 6.8%. Trafford said the results made it confident it had discovered a significant, near-surface, high-grade deposit and the mineralised body remained open in all directions. (For those who have not been following tin, those grades reported are high and above average.) Another new player is Elsmore Resources (ASX:ELR) which listed on the Australian exchange: it is exploring for tin (and sapphires) in northern New South Wales.

But a more advanced company is Consolidated Tin Mines (ASX:CSD) which has the Mt Garnet project near Cairns in northern Queensland. This project is on the old Heberton tin field where mining of the metal began in 1879 and there were more than 2,000 mines operating at various times over the following century. Production stopped in 1985 only because of the collapse of the tin price. CSD says it is aiming to be in production by the end of this year at the rate of 5,000 tonnes a year of tin, a level of output now reached by only seven mines worldwide.

In Tasmania, Stellar Resources (ASX:SRZ) owns the Heemskirk project near the Renison mine. It has now got serious money out of Germany and Luxembourg on its register. Venture Minerals (ASX:VMS) also has an advanced tin and tungsten project in Tasmania.

In other recent developments, Equamineral Holdings (ASX:EQH) has two interesting projects in the Czech Republic. One is the old Cinovec tin mine. Drilling has produced an inferred tin resource of 103,970 tonnes, which is substantial in tin terms, along with tungsten, lithium rubidium, scandium, niobium and tantalum. It also has the Zlaty Kopec project where there was small-scale tin mining from the 16th century; that was stopped by the First World War and did not resume. Magna Mining (ASX:MAN) has gone even more exotic: it is trying to win a tin, copper and gold tailings project in Far Eastern Russia.


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