Tin Miner in Australia Boosts Supply as Indonesia Cuts Sales

By Chanyaporn Chanjaroen

Metals X Ltd. (MLX), Australia’s largest tin mining company, is defying a two-year slump in prices with plans to increase output by about 14 percent.
The Renison mine, a joint venture in Tasmania, will produce about 8,000 metric tons of tin-in-concentrate this year from a little more than 7,000 tons in 2014 as it’s still profitable at these prices, Chief Executive Officer Peter Cook said. The company is looking to develop a nearby project which may provide a further 5,000 tons a year, he said in a phone interview.
Australia joins Myanmar in expanding supply after Indonesia, the world’s biggest exporter, reduced shipments in 2014 to the lowest level in at least eight years as it tightened rules on sales of the metal used in smartphones and packaging. While prices slumped 17 percent in the past two years as demand softened along with the world economy, the electronics industry is
set to continue growing, Cook said.
“The medium to long-term outlook looks very bright for tin with no one quite sure where required tin supply will come from,” Cook said on Jan. 15. “Tin is essential for the electronic sector and there is no viable substitute for it as a conductor in circuit boards.”
Tin declined 0.4 percent to $19,330 a ton on the London Metal Exchange this year as copper lost 10 percent and zinc dropped 3.8 percent. The Perth-based company can produce metal profitably at A$18,000 ($14,772) a ton, Cook said.

World Shortage

Global production will fall short of demand by 5,000 tons to 10,000 tons this year after a balanced market in 2014, according to a November estimate from ITRI Ltd., a research company based in St. Albans, England which is funded mainly by producers and smelters.
While prices of about $25,000 would encourage funding of new projects, futures will probably average $22,000 this year, Peter Kettle, head of research at ITRI, said on Jan. 14. The metal last traded at $25,000 in February 2013.
“When we’re below $20,000 and falling, that’s made it difficult for almost everybody,” Kettle said in a phone interview. “Myanmar and Australia are really the only things that stand out in terms of supply increase.”
Shipments from Indonesia plunged 17 percent to 75,925 tons last year after Southeast Asia’s largest economy toughened trading rules in 2013 to boost sales of higher-value products. New quality standards for exports were introduced on Nov. 1.
Production in Myanmar will climb by 7.7 percent to 28,000 tons in 2015, according to ITRI estimates.

Renison Mine

The mine in Tasmania has produced 6,000 tons to 8,000 tons annually for more than 40 years and has resources for 15 more years at least, Cook said. The increase in 2015 results from better grades and re-investment in the mine and infrastructure in the past three to five years, he said. Malaysia Smelting Corp. takes about 75 percent of the output with the rest going to Thailand Smelting & Refining Co., he said.
Malaysia Smelting, a custom smelter, has built a new furnace, adding 15 percent to capacity, the company said in a statement dated Dec. 16. Its production of refined tin is about 35,000 tons a year, or 10 percent of world output, it said.
The Renison mine is a joint venture with Yunnan Tin Parksong Australia Holding Co., Cook said. YTPAH is owned 16 percent by Yunnan Tin Group and 84 percent by L’sea Resources International Holdings Ltd., he said.
The company is looking to develop the Rentails project in Tasmania, which will convert waste into tin-in-concentrate at an all-in cost of A$14,000 a ton, according to Cook. Metals X will know in six months whether its partners agree to help fund it and plant construction would take 12 months, he said.
Shares of Metals X climbed as much as 7.1 percent to A$1.05, the highest intraday level since July 24, before closing at A$1.04 in Sydney.