EDITOR: | April 4th, 2014

Chinese and Apple seek new tin supplies; More room for graphite producers while uranium standstill continues

| April 04, 2014 | No Comments
image courtesy of tinapple.com

While questions remain about the real state of financial affairs in China, and therefore the future demand growth for metals of all types (but particularly the major base metals such as copper, aluminium and zinc), there are quite clear signs that when it comes to the critical technology metals , the potential consumers are taking a great interest in potential future sources of supply. (This, too, offset by the fact that even some minor metals are seeing subdued demand and pricing at present, notably with declines in prices being paid for antimony, gallium and selenium; bismuth, indium and tellurium have actually risen in the first quarter, while – thanks to Whitman Howard – we also know that germanium, rhenium, tantalum and tungsten have remain unchanged.)

When the global tungsten industry met in Sydney last year, it was notable that, many of the delegates took advantage of an offer to inspect the Mt Carbine project in far north Queensland. The old mine, which is already back in production with initial treatment of the tailings dump (and with support from Mitsubishi), is clearly seen as a potential alternative source to China of the metal.

Now this week the interest is in Queensland tin (and copper). Inspecting the planned operations of Australia’s Consolidated Tin Mines were representatives of the world’s largest tin producer, Yunnan Tin, along with officials from the giant Industrial and Commercial Bank of China and from China Railways. Consolidated plans to produce 5,000 tonnes a year of tin in concentrate which will put it in the upper half of the world’s tin producers.

Meanwhile, it was a reported this week by Bloomberg that Apple Inc. and Samsung Electronics are making intensive efforts to find new sources of tin now that the Indonesian government has clamped down on exports from the many illegal tin miners in that country, (and particularly on tin-rich Bangka Island). It is expected that the government’s efforts to put those operators out of business will see Indonesian exports (now the world’s biggest) drop by two-thirds this year to 60,000 tonnes. Bloomberg reported that Foxconn Technology Group, Apple’s biggest contractor, uses thousands of tonnes of the metal which are inserted as tiny blobs on to circuitry boards in iPhones and iPads. Samsung, along with SonyCorp and South Korea’s LG Electronics, also have been heavily reliant for tin on mines on Bangka.

In his latest quarterly commodities report, Roger Bade of London’s Whitman Howard notes that the tin price price drifted modestly downwards in the first quarter of the year. But he says future prices may be supported by the latest forecast from Indonesian tin giant PT Timah that the global supply shortfall will be much greater than previously expected as the world sees the full extent of the Indonesian government’s tightening of the export regulations. The situation in 2013 was that global supply of tin totalled 341,000 tonnes but demand was 344,000 tonnes. Another shortfall this year will mark five successive years of tin deficits.

Peru’s Minsur is meanwhile fast-tracking its planned Pitinga tin project in Brazil. This is world’s largest (known) undeveloped tin deposit with reserves of 420,000 tonnes, and is located 300km north of the Amazon River port city of Manaus.

Graphite: In comments on other technology metals, Roger Bade suggests that the planned Balama mine in Mozambique owned by Australia’s Syrah Resources may not absorb future market demand quite as much as expected. He sees the recent deal with Chinalco, where the Chinese aluminium producer will use Syrah’s graphite as an anode in its smelters, as having the potential to absorb a large chunk of Balama’s projected output. The inference to be taken from that remark is that there could still be plenty of business left for other prospective miners, especially if more aluminium producers follow Chinalco’s lead.

Uranium: On the subject of uranium, Bade notes that – in spite of a flood of bullishness – the uranium price in the first quarter again moved sidewards. “The removal of liquidity with the exit of a number of investment bank traders appears to have offset renewed hopes of a Japanese nuclear restart, the vague possibilities of a US boycott of purchases from Russia, and production difficulties in Kazakhstan,” he added.



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