The Baiyinchagan mine is set to come back online after the local government approved its mining license on 27 July.
The mine, located in Inner Mongolia, China, was closed in early 2019 after a fatal accident. At the time, it was estimated that the mine would close for anywhere between 3 months and 1 year. However, the mine has now been closed for 17 months.
However, Inner Mongolia Xingye Mining Co., Ltd, which operates the mine, has announced that production will be resumed in the near-term. This announcement comes after its parent company, Yinman Mining, was awarded a new “Safe Production Permit” from the Emergency Department of the Inner Mongolia Autonomous Region. While the announcement from Xingye Mining details a 3-month approval process which began in April this year, there were several delays to the mine’s restart.
Our view: In 2018, Baiyinchagan produced around 8% of Chinese domestic tin concentrate (~7,000 tonnes tin-in-concentrate). The loss of the mine would have been a significant issue in 2019, had demand for refined tin not fallen significantly toward the end of the year; as a result, Chinese smelters announced significant production cuts.
However, supply of tin concentrate for Chinese smelters has been much tighter recently. Issues at the border with Myanmar related to COVID-19 have delayed some shipments and prevented workers from resuming production at processing plants in the neighbouring country. As a major mine, Baiyinchagan may be able to help alleviate this issue in the short-term, with COVID-related disruptions likely to continue for some time.