Tin may not be the most glamorous commodity, but surging demand and prices – fuelled by its growing use in new technologies – is making it one the base metals to follow in 2023.
According to The-pick.com.au, the London Metals Exchange (LME), and the Shanghai Futures Exchange (SHFE) tin prices have surged 65% and 56% respectively since November 2022. This price surge is likely attributed to:
- Tin’s critical nature being recognized further by global economies
- Stockpile inventories at LME and SHFE being less than one week of global demand
- Re-opening of China (and Chinese manufacturing) following documented COVID-19 lockdowns
- The slowdown of global inflation and the fears it may lead to a hard landing for global economies
- The reiteration of the likely restrictions on exports by Indonesian officials (~18-20% global tin supply)
- Recent political instability in Peru and the shutdown of the San Rafael mine (~12% global tin supply)
According to Verified Market Research, the global tin market size was valued at US$6.80B in 2021 and is projected to reach US$9.35B by 2030, growing at a CAGR of 3.70% from 2023 to 2030.
Much of this long-term forecast growth is attributed to the base metal’s growing acceptance as a critical mineral.
The use of tin in metal alloys dates back as early as the Bronze Age (approximately 3000 BCE to 1000 BCE). Additions of metallic tin to copper produced bronze, which was easier to cast, was more workable, and held a more durable edge compared to copper alone. As an alloy with other metals, tin is used for many agricultural, chemical, and electrical applications.
Tin is considered a critical mineral in domestic metallurgical applications that serve defence, electronics, and telecommunications technologies. Alloyed with niobium, tin is used to produce wire that is superconductive at relatively low temperatures and may soon be utilized in the manufacture of high field strength magnets that consume less energy to operate.
Tin also provides resistance to chemical corrosion and is used as a coating on other metal surfaces, such as steel in what are known as “tin cans”.
The metal is used for soldering pipes and electrical circuits. Tin salt compounds sprayed onto glass provide an electrically conductive coating for panel lighting and frost-free windshields. Indium-tin-oxide alloys are an important component of flat panel display technologies that are used in a wide range of consumer electronics and defense applications, including computers and mobile devices, medical equipment, and cameras.
Tin in industry
Tin is globally distributed but relatively rare. Although the US maintains a supply of tin in its National Defense Stockpile, approximately 75% of tin is imported from Bolivia, Indonesia, Nigeria, Malaysia, Thailand, and Zaire. Minor occurrences within the US are found primarily in Alaska and California.
According to the International Tin Association (ITA), there is a need for significant new investment in supply to secure tin’s critical role.
The ITA recently presented its vision for the future of tin with the latest strategic thinking of the industry.
The Association says there is a major investment opportunity for tin mining and recycling as the metal is a vital ingredient in solar energy, electric vehicles, and other future technologies.
“Over the next decade we believe demand for tin will surge as the technology supercycle brings unprecedented opportunities for the tin industry,” said Dr Jeremy Pearce, head of market intelligence & communications at the ITA. “The sector will need to adapt rapidly to meet this demand as the role of tin in enabling the energy transition and digitization becomes more obvious.”
The ITA has also previewed first-stage results of its TIN 2030 initiative.
“This industry vision to 2030 looks at the sector through the lens of macroeconomic influences, growing sustainability pressures and opportunities, and the role of technology. It concludes with a wakeup call to the crucial role of tin, for example as solder – the glue that holds together all electronic and electrical infrastructures.
“As the awareness of tin’s importance grows, so too will the need to secure supply,” said Dr Pearce.
The organization highlighted the scale of new investment required to meet the expected surge in demand. It estimates that US$1.4B is needed to deliver 50,000tpa more tin by 2030. This represents a huge opportunity for investors, allowing the tin sector to build a better future for all.
The ITA has also announced its flagship Tin Code ESG reporting tool is being extended for voluntary participation by ITA Explorers and Developers Group members. ESG performance will be an essential step in securing investment in new supply. The code allows its members to demonstrate their ESG commitment and work towards positive improvement in their operations and the global tin industry.
As the awareness of tin’s importance grows, so too will the need to secure supply
Elementos on the move
One company that is doing its bit to invest in new tin development is Elementos Limited (ASX: ELT) which recently commenced an eight-hole 1,000m exploration drilling campaign at its Oropesa Tin Project, Spain, targeting additional mineralization outside the 2021 Mineral Resource Estimate (MRE).
The drilling is targeting the north-west and south-east ends of the deposit and was designed based on results from the recent 10-hole infill drilling and the geotechnical drill programme in 2022 at Oropesa.
The company is awaiting one batch of assays to finalize an update to the 2021 MRE and support Oropesa’s Definitive Feasibility Study (DFS).
Elementos managing director Joe David said continuation of exploration at Oropesa was an exciting time for the company amid DFS development and a surging tin price.
“We are advancing rapidly towards completing the DFS and increasing the confidence of the Mineral Resource Estimate,” Mr David said.
“However, Oropesa remains prospective for additional mineralization so it’s quite exciting to kick off this exploration drilling programme which will test extensions to our current Mineral Resource.
“Additional mineralization, if intersected, should give our shareholders extra confidence that Oropesa’s Mineral Resource is yet to be fully defined and the possibility that additional mineralization and therefore mine life may exist outside the known mineralization.
“Exploration is underway during a time when the tin price is surging, based on what appears to be a return to fundamental supply-demand analysis which shows a significant deficit in the tin market from 2024/2025 onwards,” he said.
Oropesa is one of the world’s largest undeveloped, open-cut mineable tin deposits, with access to world class infrastructure and represents a near-term development and cash flow opportunity for Elementos.
Elementos’ Optimization Study (JORC defined Scoping Study) for its Oropesa Tin Project in Spain has confirmed a robust case for upgrading the project scale to 1.25Mtpa Run of Mine (ROM) rate, with average annual contained tin production projected at 3,350tpa.
On a base case tin price of US$32,500/t, Oropesa’s Optimization Study confirmed:
- Pre-tax ungeared NPV8% of approximately A$292M and post-tax NPV8% of approximately A$198M
- Pre-tax Internal Rate of Return is approximately 46%
- Mine life of at least 13 years, Payback period of ~ 2.5 years
Elementos is preparing to undertake a Definitive Feasibility Study (DFS) and finalize environmental permitting as its next steps in developing Oropesa.
