Tin supply just four years away from crisis
To hear Germany’s Federal Institute for Geosciences and Natural Resources (BGR) tell it, tin is not that big a deal. At the recent international tin conference in Penang, Malaysia, BGR’s Dr. Harald Elsner made these points at the beginning of his presentation: tin is the least important metal traded on the London Metal Exchange (arguable now that cobalt and molybdenum are traded there); it is the forgotten metal, not being included in the European Union’s 2010 Critical Metal report; and it did not even make into the 2014 update of that list because of the high recycling rate in Europe.
Yes, but then fast-forward to the end of Elsner’s paper and he notes that the tin market will probably stay in balance for the next two to three years. But then? “After that the tin market is going to change drastically. Reason: depletion of Indonesian resources,” said Eisner.
We’ll come back to his paper but he did make on extraordinary statement. “Tin is a typical industry but not a high-tech metal”. Excuse me? Even in Germany, which is the fourth largest tin consumer in the world, 28% of the metal there goes into solder (for electronics) and 26% into chemicals. Yet other speakers at the Penang conference (organised by the International Tin Research Institute, by the way) pointed out that tin is going into a range of products from solder to LED lighting, that it and calcium elements are slowly replacing cadmium and antimony in lead-acid batteries, and that tin will replace lead as a stabiliser in chemical plants.
A great analysis of the tin situation was presented by Yunnan Tin general manager Gao Wenxiang who cited U.S. Geological Survey figures showing that in 2000 the estimated size of the the world’s tin reserves was 6.9 million tonnes; now they are thought to stand at 4.7 million tonnes. Tin production is also declining: it peaked at 350,000 tonnes in 2007 and in 2013 was down to 280,000 tonnes, the same as it had been in 2003. Gao said the problem has been a combination of resource depletion, too little investment in exploration and a failure to come up with sufficient numbers of new projects. The future painted by Yunnan Tin is not a rosy one. The company sees a global situation where we are facing a rapid decrease in the reserves and supply of high grade tin, and most mines experiencing falling grades. Much more money will have to be spent trying to expand resources at existing mining operations, lower grade reserves will need to be mined and recycling expanded. The largest mines in Peru and China will run out of high grade ore tin by 2017 and 2018 respectively, the Indonesians have dredged all the alluvial tin in shallow areas and now having to move into deeper sea areas. In 2012, Indonesia produced 28% of the world’s tin; it accounted for 86% of alluvial tin output and 71% of the world’s small-scale tin miners are Indonesian. When it comes to the world’s tin smelters, 42 of the 100 are Indonesian (although Chinese refining capacity is about 50% greater than Indonesia’s.
China’s inability to remain reasonably self-sufficient is another complication. Figures presented to the conference by other speakers showed that China imported only 2.5% of its tin needs in 2006, but now relies on foreign mining to supply 18%. Most of that is now coming from Burma (Myanmar). Last year Burmese tin exports to China rose by 315%. But that may also be in danger: the largest mine there supplying China is expected to exhaust its higher grade tin within two years.
For the record, Elsner lists the probable new tin projects that will get into production by 2020:
- Mount Garnet, Australia, owned by MGT Resources
- La Parilla Tailings in Spain, owned by London-listed W Resources Plc.
- Hemerdon, England, a tungsten-tin project owned by Australia’s Wolf Minerals
- Achmmach, Morocco, owned by Australia’s Kasbah Resources
- Bofedal II, Peru, Owned by Minsur
- Heemskirk, Australia, owned by Stellar Resources.
The problem is that only the last three on that list will be producing quantities of tin that will make significant impact on world supply.
This is why a chart presented by Elsner shows tin-in-concentrate production dropping from around 300,000 tonnes a year to 220,000 tonnes by 2020.
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