Minsur has revised its 2017 Peruvian refined tin production guidance from between 16,500 and 17,500 tonnes to between 17,500 to 18,500 tonnes. The change was outlined as part of the company’s Q2 financial results, which also reveal that refined tin production from its Peruvian operations in Q2 totalled 4,727 tonnes, down 6% from 5,014 tonnes in Q2 2016.

The lower production in Q2 2017 is largely due to consumption of raw material stocks in the same period of 2016 to reduce inventory levels, which had supplemented refined tin output. In contrast, the San Rafael Mines’ Q2 tin-in-concentrate output rose 5% year-on-year to 4,794 tonnes due to better performance of the ore sorting plant, offsetting lower head grades from the mine.

In the first half of 2017 refined tin production declined 11% year-on-year to 8,307 tonnes, while tin-in-concentrate output fell less than 1% to 8,811 tonnes. The ore sorting plant is being fed by low-grade ore stocks at the mine site, but the contribution to overall output is temporary, with depletion of the stocks anticipated by the end of 2017.

The overall cash cost of production in the first half of 2017 increased 15% year-on-year to US$9,249 per tonne of refined tin, due in part to lower head grades and production, but partially offset by a 43% reduction in cash cost per treated tonne of ore.

ITRI View: Minsur’s Peruvian refined tin production in 2016 totalled 19,573 tonnes, so lower output is anticipated this year, despite the revised production guidance. We consider a further decline likely in 2018 due to the depletion of ore stocks which have been supporting tin-in-concentrate output at San Rafael. However, approval for execution of the company’s B2 tailings project is expected by the end of Q3 2017, which could provide 4,500 to 5,500 tpy of additional tin production capacity over a 9-year period, with the execution of the project likely to start by mid-2018.