By Melissa Pistilli-Exclusive to Tin Investing News

The world’s leading tin miner, PT Timah has announced it may restrict refined tin production and instead ramp up output of higher grade tin-based products such as tin chemical and tin solder in an attempt to counteract falling prices.

“If prices are still lower next year, we may limit refined tin output and push for more high-priced by-products,” said company spokesman Abrun Abubakar. “It’s useless to flush the market with refined tin.”

Because of plunging prices, PT Timah expects tin output to remain flat throughout next year. The company anticipates between 45,000 and 48,000 tonnes of refined tin production this year, slightly below their initial target of 50,000 tonnes and significantly down from last year’s 58,325 tonnes.

The planned cutbacks in production are an attempt to stabilize prices in the tin market. “We expect tin prices won’t fall further. If they can stay at $15,000 that is good,” said PT Timah finance director Krishna Syarif.

PT Timah’s production curbs are representative of a growing trend in Indonesia, the world’s second largest tin producing country (25% of global production) and home to some the largest deposits of tin on earth. Tin smelters across the nation are halting production.

The Indonesian government’s crackdown on illegal tin mining has already heavily impacted the nation’s tin industry. The government imposed regulations coupled with significant decreases in production will no doubt help to place much needed upward pressure on tin prices.

Tin Price to Recover?

In May of this year, global tin prices reached a record high $25,500 before falling victim to the current worldwide economic crisis. On Tuesday, tin on the London Metal Exchange was quoted at $12,650 per tonne. The tin price is forecasted to remain under pressure and uncertain as the markets remain volatile. Movements in price will most likely reflect global commodity and US dollar movements.

Many remain confident that China, whose economic growth was greatly responsible for driving commodity prices over the last few years, will bounce back from the current economic crisis. “China’s resurgent demand for raw materials is already surprising the market,” said Diggers and Drillers editor Al Robinson. “It reverted to ‘net importer’ status in all base metals for October, according to the London Metal Exchange. China already needs more resources than it can get its hands on.”

Some analysts are certain that the actions taken by central banks around the world are beginning to produce movement in global capital, which may be seen as a sign that commodity prices are beginning to bottom. This could be the start of bargain hunting in the resource sector, especially for mining shares.

Metals X Limited

Australian miner Metals X Limited [ASX:MLX] is bound to catch the eye of many a bargain-hunting investor. The company is Australia’s largest tin producer and has a portfolio consisting of nickel, zinc, copper, gold and uranium as well. Metals X’s tin properties are some of Australia’s largest and best known hard-rock tin mines and prospects.

Metals X reported a cash position of $25.4 million for the third quarter ending September 30, as well as a net working capital position of $21.7 million and no corporate debt. Due to current market conditions, Metals X is refocusing its efforts on its revenue producing assets and preserving its cash reserves. The company’s tin projects include: Collingwood, Renison, Mt. Bischoff and Rentails.

The Collingwood Tin Project is wholly owned by Metals X and is the largest tin producing operation in Australia with production rates around 5,700 tonnes of 60% grade tin concentrate a year. Concentrate product from Collingwood is shipped to Malaysia for refining and smelting. The finished product is then sold on the Kuala Lumpur Metal Exchange.

The Renison Tin Project includes the historic Renison Bell Mine and process plant, which in the past produced over 200,000 tonnes of tin. Metals X acquired the property in March of 2004. In the third quarter of this year, commissioning of the Renison plant was completed and commercial tin production commenced. The company expects to reach full capacity by the end of this year. Renison is currently generating regular cash flow and Metals X expects the project will reach a cash positive position in the fourth quarter.

Metals X plans to incorporate the Mt. Bischoff property into the Renison Project to provide ore feed to the Renison Tin Concentrator. The property has a moderately sized open pit resource and the potential for further tin discovery and mining. Metals X is awaiting statutory approvals in order to begin mining on the property.

The Rentails project involves re-processing and recovery of tin and copper from 18.2 million tonnes of tailings left over from tin ores processed at the historic Renison Bell mine. The tailings have an average grade of 0.42% Tin and 0.20% copper.

“With shortages of tin stocks and China becoming a net importer of tin and Indonesian tin output falling, tin prices should recover despite weaker demand in the short term,” said Proactive Investors Australia director Andrew McCrea. “MLX’s share price is leveraged to changes in the price of tin.  Trading near a three year low, MLX could be a good upside bet at current prices.”

Shares of Metals X Limited were at .09c on the ASX Tuesday, down from a 52-week high of .48c.<–>

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