Tin is increasingly used for solder in electronics

By Kishori Krishnan Exclusive to Tin Investing News

Normally, tin doesn’t get a lot of attention. The lowly, non glamorous tin is becoming increasingly important however, overtaking lead as the metal of choice in modern electronics soldering, especially after EU regulations requiring lead-free solders was implemented in 2006. In 2006, tin accounted for 50 per cent of solders; in 2007, that market share grew to 52 per cent. This demand creep, however, isn’t the sole reason for the positive feelings toward tin.

“The reason people are bullish on tin is not a demand story; it’s a supply story,” said Catherine Virga, an analyst with CPM Group in New York. That supply story has been building for years. Today, the fundamentals for tin remain strong even in the current economic climate, given that tin ore has tremendous potential for growth.

Tin has been the best performing London Metal Exchange (LME) traded base metal in the current crisis, down in price less than 20 per cent on a year-on-year basis. As at December 1, 2008 the cash price of tin was US$12,750 per ton. A market deficit is predicted for 2008-09, as LME warehouse stocks are at historical lows of only 4,585 tons.

Incidentally, low tin prices are also forcing firms to increase production. Like Bolvia’s Vinto smelter, which is reactivating two furnaces in an effort to boost monthly refined tin production to 1,000 tpm.

General manager of Vinto Metallurgical Complex Franciso Infantes said that the firm has reactivated rotary furnace three with capacity to process 750 ton per month of additional tin concentrates. Infantes said that reactivation called for a US$ 500,000 investment. The rotary furnace will operate in conjunction with the two reverberatory units and an electric furnace that are currently operating.

In three months, a further old reverberatory furnace will be re-commissioned, at a cost of a further $1.5 million. The investments are in line with plans to expand production at Comibol’s Huanuni mine, which is the main source of concentrate supply to the plant. Bolivian Mining Minister Luis Alberto Echazú said last month that the smelter was expected to be producing 1,000 tpm by August. CMV currently produces 800 ton per months of fine tin and plans to reach full capacity of 1,000 ton per month soon after the upgrades to the plant.

Indonesian tin producer PT Koba Tin too plans to produce 9,017 ton of tin this year, or 750 tpm, reports Metal Bulletin. Koba Tin is Indonesia’s second largest integrated producer after PT Timah, the world’s second largest tin supplier. Koba is owned 75 per cent by Malaysia Smelting Corporation and 25 per cent by Timah. Koba produced 7,200 ton of refined tin in 2008. The growth in production this year will come from the opening of four new gravel pump units and a planned resumption of small-scale sub-contractor mining. Koba also operates one large onshore dredge.

Chinese Capers

Can China, the top producer of tin, put a floor under base metals? China’s stimulus program, aimed at the reconstruction of Sichuan province, which was devastated by an earthquake in May, is already showing results. Beijing has already begun buying up grains to support farmers. Yunnan province, a major base metals production region in southwestern China, said it plans to buy one-million tons of base-metals, ores and semi-finished products to support local industry.

If it goes ahead with purchases, China could end up importing more refined copper and nickel and cutting into domestic stocks of aluminum, lead, zinc and tin. Wen Xianjun, deputy of China’s Nonferrous Metals Industry Association, said Chinese banks should buy tin and aluminum as an investment due to the low price, because production costs would be higher than current metal prices within three to five years. “If I was a banker and had money, I would buy aluminum and tin now,” Mr Wen said.

Lead Role

Tin is also playing a leading role in a boom in mineral exports from Rwanda. The country’s total mineral export earnings in the ten months to October 2008 amounted to US$81.9 million, of which cassiterite (tin ore) accounted for $37.6 million. Mineral export earnings were on course to exceed $100 million in the year. In volume terms cassiterite exports in the ten months were 3,700 ton gross weight, according to local press reports.

Minerals accounted for 40 per cent of Rwanda’s export earnings in 2007, challenging the traditional major earners tea, coffee and tourism. Tin accounted for 18 per cent of the country’s total exports. The mining sector as a whole contributes some 10 per cent of the country’s GDP.

‘We are organising the sector and believe with this, we can easily triple income within the next five years. We want to return $200 to $250 million,” Vincent Karega, the natural resources minister told Reuters in December. “We have a clear policy and a new law that protects investors in the sector allowing long-term leasing and we have in place a government agency that provides geological information and advisory role in better ways of mining,” he said.

Company News

Lara Exploration Ltd. (TSX: LRA) has reported that it has outlined a second robust tin-bearing alteration zone on its São Lourenço project in northwest Brazil. Continuous channel sampling on the Irene Target has outlined 20-28 meter-wide zone extending for a strike-length of 200 meters. The company plans to continue sampling on the Irene Target to extend the known mineralized zones and define drill targets for testing the depth extensions of these systems.

Australia-based listed mining company North Queensland Metals (ASX: NQM) has acquired a suite of tin mining leases immediately to the north of NQM’s EPM 14741 tenement at Herberton, in far north Queensland. NQM has acquired the mining leases, which include Stannary Hills, from Nickelseekers Pty Limited, having paid $200,000 plus 1,000,000 shares in NQM. Announcing the acquisition, CEO John McKinstry said: “Stannary Hills is well known for having been a large producer of high grade tin ore, and still contains significant mineralized zones”. This acquisition completes a strategy commenced in 2007 to secure the most prospective tin exploration properties in the Herberton mineral field.

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