A joint report, New Tin Supply, by ITRI and Greenfields Research analyses 70 tin mine projects, assessing their geological and technical merits and making calculations of potential operating and capital costs, as well as considering the investment suitability of the countries and regions where the projects are based. The report shows that a few projects have progressed quite rapidly to feasibility study stage over recent years. However, for future supply requirements to be met, much more investment will be required as the rest of the project pipeline is still early stage, and faces combinations of technical, financial and political challenges.
Good news – lots of tin in safe places
Potentially more than five million tonnes of tin, mainly in relatively low-risk countries, is available for extraction. JORC or NI-43-101 compliant resources of 1.99 million tonnes of contained tin are identified, while less reliable historical estimates or exploration targets for projects with no current compliant resource add up to another 3.2 million tonnes.
If all the projects were developed as mines, they would have a combined annual production capacity of some 218,000 tonnes of tin per year. 36% of this production could come from countries with a high level of investment suitability (based on rankings from Fraser Institute, Transparency International, World Bank and World Economic Forum), compared to only 2% of actual mine production in 2013.
Problems and risks – low grades, high costs, few new discoveries
However most of the projects are too low quality to take off in current market conditions and very little effort is being made to find better ones.
The estimated capital cost of developing all the projects surveyed is US$8.4 billion, or $38,000 for every annual tonne of mine capacity. Although this investment would also generate substantial revenues from co-product production of metals such as zinc, copper, tungsten, tantalum and precious metals – equivalent to another 99,000 tpy of tin – the tin grades are in many cases still too low to generate an adequate return.
The median feed grade for all the projects is 0.4% Sn, well below the average for current hard-rock mines, with the result that median cash operating costs (net of by-product credits) are likely to be more than 50% higher than the median for current mines.
Another stark statistic from the survey is that less than 40% of potential production would come from “greenfield” deposits which have not been mined on a significant industrial scale in the past. The rest is accounted for by “brownfields” (re-treatment of tailings from old mines – something which is technically challenging and has not yet been achieved on a significant scale) or “greyfields” (potential re-openings of old mines). Only 4 of the 70 projects were discovered after 1985, the year of the tin crisis price collapse.
Conclusions – stressed project pipeline needs reinforcement
A small sub-set of the projects is moving ahead, but the majority will probably remained stalled unless market conditions improve significantly. In all, the tin mine project pipeline is not big enough or sufficiently advanced to meet future supply requirements. In addition, the stressed nature of the tin project pipeline suggests that there is considerable scope for exploration for new high quality tin deposits.
