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25 August, 2017
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Tin in the News
Dear readers,This week we summarise Q2 performance by Minsur's operations in Peru and Brazil, as well as the news of the recent tin mining licence moratorium in Indonesia. News of renewed interest in Bolivian tin tailings projects is also included.Tom Mulqueen - Manager, Markets |
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Indonesian governor imposes tin licence moratorium.
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24 August: The Governor of Bangka Belitung, Erzaldi Rosman Djohan, has announced a moratorium on issuance and renewal of tin mining licences in the Indonesian province, asserting the need to address damage to the environment from illegal mining as well as illegal exportation of tin concentrate, according to local news sources.According to the governor, the moratorium means no new mining licences or extension of existing licences will be granted for the next two or three months while new regulation on tin mining is being drafted by the government. In addition to addressing illegal mining in the province, the moratorium is intended to help stop exportation of tin ore, which has been banned since early 2014. Erzaldi has claimed that mining companies have illegally exported tin ore from the province via unregistered harbours. It is understood that the regulation currently being drafted could be effective by the end of this year and will include stricter mine site reclamation obligations as well as requirements for mining companies to further limit the ecological impact of their activities.On the subject of illegal mining on Bangka, state-owned tin producer, PT Timah, has reported that it believes illegal mining is in decline, partially as a result of a less-confrontational approach it is taking to address the problem. Timah finance director Emil Ermindra said that the company has sped up payments to individual miners to prevent the proliferation of illegal mining facilitated by sales to middlemen. The company does not expect the moratorium to impact its own tin production because the company's current mining business permit (IUP) is valid until 2025. ITRI View: While this news suggests potential restriction of Indonesian tin supply, there is too little information to determine the scale or significance of any impact on export volumes. In the short-term, the moratorium will presumably only impact supply from those companies whose licences are due for an extension, something that is not currently clear. The impact of the new regulation on tin mining is equally uncertain, particularly as it is still in draft, but may be a more permanent constraint on supply when it becomes effective if its enforcement leads to closure of non-compliant mining areas or operators.
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Minsur increases Peru production guidance for 2017
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18 August: Minsur has revised its 2017 Peruvian refined tin production guidance from between 16,500 and 17,500 tonnes to between 17,500 to 18,500 tonnes. The change was outlined as part of the company's Q2 financial results, which also reveal that refined tin production from its Peruvian operations in Q2 totalled 4,727 tonnes, down 6% from 5,014 tonnes in Q2 2016.The lower production in Q2 2017 is largely due to consumption of raw material stocks in the same period of 2016 to reduce inventory levels, which had supplemented refined tin output. In contrast, the San Rafael Mines' Q2 tin-in-concentrate output rose 5% year-on-year to 4,794 tonnes due to better performance of the ore sorting plant, offsetting lower head grades from the mine.In the first half of 2017 refined tin production declined 11% year-on-year to 8,307 tonnes, while tin-in-concentrate output fell less than 1% to 8,811 tonnes. The ore sorting plant is being fed by low-grade ore stocks at the mine site, but the contribution to overall output is temporary, with depletion of the stocks anticipated by the end of 2017.The overall cash cost of production in the first half of 2017 increased 15% year-on-year to US$9,249 per tonne of refined tin, due in part to lower head grades and production, but partially offset by a 43% reduction in cash cost per treated tonne of ore.ITRI View: Minsur's Peruvian refined tin production in 2016 totalled 19,573 tonnes, so lower output is anticipated this year, despite the revised production guidance. We consider a further decline likely in 2018 due to the depletion of ore stocks which have been supporting tin-in-concentrate output at San Rafael. However, approval for execution of the company's B2 tailings project is expected by the end of Q3 2017, which could provide 4,500 to 5,500 tpy of additional tin production capacity over a 9-year period, with the execution of the project likely to start by mid-2018.
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New highs for Pitinga-Pirapora tin output
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18 August: Refined tin production from Minsur's subsidiary in Brazil, Taboca, rose 28% year-on-year to 1,934 tonnes in Q2 according to the company's Q2 financial report, while production from the Pitinga Mine declined 3% to 1,622 tonnes.The increase in refined tin production was explained by an 18% higher volume of concentrate to the smelter and a 37% rise production of tin from slags. Output in the first half of 2017 totalled 3,356 tonnes, up 39% from the same period of 2016 and on track to meet the official refined tin production guidance of 6,500 to 7,500 tonnes for the year.Ferro Niobium and Ferro Tantalum alloys output totalled 659 tonnes, up 36% compared to the same period of last year due to the start-up of a new flotation plant for the two by-products. Operational costs also increased in Q2 relative to Q1 due to plant maintenance.ITRI View: Based on reported average head grades and treated ore tonnages we calculate that the mass of tin contained within treated ore at Pitinga rose 13% year-on-year in H1, almost double the 7% increase in tin-in-concentrate production from the mine. This difference was most notable in Q2 where mine production at Pitinga fell 3% to 1,622 tonnes despite a 4% year-on-year increase in the mass of tin contained within treated ore. We infer that tin recoveries at the processing plant have fallen since 2016 and suggest this as an explanation for the 3% year-on-year decline in Q2 production from Pitinga.
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Victory Mines to commence Bolivian tailings studies
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24 August: Australian tin explorer, Victory Mines (ASX:VIC), has announced that it has been granted permission by Bolivian state mining company, Comibol, to carry out feasibility study work on eight tin tailings sites in Bolivia.The sites include four existing tailings projects that the company was working to develop in 2015 with local mining cooperatives under the joint venture, South American Tin. These four tailings sites (El Kenko Lamas, Catavi, Sink & Float Descartes and Rio Andavillque) are located near to the historical Siglo Viente (Siglo XX) tin mine in the country's Potosi department. New sites being considered for development include three tailings projects related to the state-run Huanuni Mine including river sediments as well as tailings from the Santa Elena and Machacamarca processing plants. Tailings at the privately run Japo tin mine is the final site which will be considered in the study. An exploration target based on historical exploration suggests a total of some 55 – 60 Mt of ore containing some 0.4% Sn, or 220 – 240kt contained tin across the eight projects.The company intends to carry out a drilling programme across the sites and to complete an initial feasibility study within the next six months. This will be followed by further studies with the aim of entering into a production contract with Comibol within eighteen months from the completion of drilling.ITRI View: The tin price has recovered significantly since company ceased its previous tin project development work in Bolivia in 2015, which has no doubt been an important factor in its return. A key difference from the previous arrangement is that the company is now working directly with Comibol, rather than with local mining cooperatives, and it will create a new legal entity in Bolivia to reflect this. Attracting finance is likely to remain a challenge for the development of any of these projects, as the country remains high-risk for investment due to the high-profile nationalisation of the Vinto tin smelter in 2007 and 2010 and the Colquiri tin-zinc mine in 2012, both subject to an ongoing arbitration claim by the original owner, Glencore.
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ITRI Asia Tin Week less than one month away
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Our upcoming tin conference in Kunming, China, will be held from 12th -15th September.This is the 5th ITRI event held in China following Hangzhou in 2011, Kunming in 2013 and Shanghai in 2015 and 2016. The event will include a market-oriented conference – The Asia Tin Summit – and a tour to the smelter of the Yunnan Tin Company.The event is expected to attract some 300 delegates from China and the rest of the world. Click here to download the latest Programme.Click here to visit the event website for further information and to register.
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