’s tin production from its operations in Peru and Brazil is forecast to increase from some 26,000 tonnes in 2016 and 2017, to around 30,000 tonnes by 2019, in a new analysis published by Fitch Ratings earlier this month.

Fitch re-affirmed a BBB- rating on Minsur bonds, with a stable outlook. In the release, Fitch noted the continued low cost of production in Peru, that the “long-term fundamentals for tin remain sound” and that “the recent trend (at the San Rafael Mine) indicating higher levels of reserve replacement than ore mined.

Both Fitch and ITRI expect Minsur’s total refined tin production to remain stable at around 26,000t in 2017, while recognising the potential of the company’s B2 tailings project in Peru to boost production to 30,000 tonnes by 2019, assuming the project remains on schedule. The company’s new $20 million optical ore sorting plant in Peru was commissioned last May and its utilisation in processing low-grade ore stockpiles was significant in lowering operating costs and sustaining output during 2016. The depletion of these stockpiles by early 2017 will likely result in higher operation costs this year, although the ore sorter will continue to support production by improving tin recovery of run-of-mine material.

ITRI View: ITRI estimates that total refined tin production by Minsur in Peru and Brazil was the 3rd highest of any company last year. The decade-long trend of declining production and falling tin head grades from the main mine operation at San Rafael represent the biggest downside risk for Minsur’s tin production looking forwards. However, initiatives in Peru such as the new ore sorter and B2 tailings project provide strong upside potential, while the output from the Pitinga Mine in Brazil is set to recover after power problems at the site last year.