Tin miner Woodcross Resources has launched its refinery at Mbarara, Uganda – the first in the country. The company has been developing this facility since a series of regulatory changes prohibited concentrate exports, and has become the first integrated tin producer in Uganda.

Uganda’s President, Yoweri Kaguta Museveni, and the Minister of Energy & Mineral Development, Dr Ruth Nankabirwa Ssentamu, last week attended the opening of the facility, which is only the third tin smelter on the continent.

Despite Africa’s contribution of 12.0% of mined tin in 2023, smelting capacity in Africa is very limited. Existing operations in Rwanda and in DR Congo together provide only 0.3% of global refined tin supply, with the vast majority of tin concentrates being exported to smelters in Asia.

The new facility in Mbarara district has a nameplate throughput capacity of 1,600 tpa, with output approximately 1,000 tpa of LME-conformant tin ingots grading 99.85% Sn. The refinery is located under 50 km from Woodcross’ two existing mines at Ntungamo and Isingiro.

In 2022, new mining regulations came into force, introducing a new licensing regime and an effective ban on concentrate exports. In December 2023, Energy & Mineral Development Minister Dr Nankabirwa announced statutory changes to reinforce this with an increased minimum export grade for tin of 99.85%, aligning with the Government’s wider mineral strategy for increased value addition.

While Woodcross Resources’ development plans for their two mining licences and four additional exploration permits have been on hold since the regulatory changes, the completion of the commissioning of their refinery will allow the company to continue plans to formalise artisanal operations and develop its small-scale mining operations.

Projects to formalise and develop artisanal mining operations are increasingly prevalent around the world, and particularly in Africa, where an estimated 53% of mined tin supply originates from artisanal and small-scale mining operations.

Our view: At present, Uganda is a small tin producer, with mined tin production less than 1,000 tpa, but the opening of the country’s first tin refinery marks a significant milestone for the reopening of the Ugandan tin industry.

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ITA understands that two of Indonesia’s three largest smelters, including PT Timah, have now restarted exporting tin. Exports in February stood at 55 tonnes, representing a marginal increase from January, and a 98% decrease from February 2023.

Trading on the Jakarta Futures Exchange (JFX) resumed on 05 March and 1,780 tonnes of tin have since been traded on various contracts. Trading has not yet resumed on the Indonesian Commodities & Derivatives Exchange (ICDX), which generally represents the smaller private smelters. Since a regulatory overhaul in 2014, all refined tin for export must first be sold on either the JFX or ICDX. Refined tin exports in January stood at 0.4 tonnes (99% decrease year-on-year), while exports edged higher to 55 tonnes (98% decrease year-on-year) in February.

Licensing continues to be delayed, nickel is facing similar challenges, with further complications from the ongoing investigation into alleged historical irregularities in the domestic tin trade in Indonesia. There have been unconfirmed reports that several smaller private smelters now have their work plans and cost budgets (RKAB), however, ITA has not been able to validate these. For now, the majority of tin smelters in Indonesia have not exported any tin in 2024.

Traders in Asia have commented on the difficulty of sourcing tin due to the lack of Indonesian output. While consumption in Europe remains suppressed by macroeconomic conditions, traders in Europe have commented that tin is increasingly difficult to source, with shipments additionally delayed by continuing disruption in the Red Sea.

Our view: While the resumption of production is welcome to international markets, further extended licensing delays indicate that exports may remain suppressed for some time. In China, a feedstock squeeze due to the cessation of tin mining in Myanmar’s Wa State since 01 August 2023 adds increased uncertainty when combined with the loss of Indonesian supply which accounted for 73% of China’s refined tin imports in 2023.

PT Timah is a member of the International Tin Association.

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Yunnan Tin Company maintained its position as the world’s largest producer of refined tin, while others, such as EM Vinto, re-entered to Top 10 list. As was well-publicised at the time, MSC were subject to strict COVID regulations from the Malaysian government which saw its production fall significantly compared to 2020. Overall, global refined tin production is estimated to have reached 378,400 tonnes, up 11% on last year’s total of 339,400 tonnes.

ITA surveys global tin smelters to compile the annual list of the world’s largest producers. In 2021, these top 10 companies produced 59% of the world’s tin, down from 67% in 2020. As previously mentioned, the part of the drop in the group’s output can be attributed to the difficult year had by MSC. However, another significant decline in output from PT Timah – the second consecutive fall – also contributed.

In China, most smelters recovered production during 2021, despite challenges. Although recent imports from Myanmar has been lowered, some smelters have pivoted to importing concentrate from other regions – including central Africa. Producers in South America recovered rapidly from COVID-related issues in 2020, with all the surveyed smelters reporting increased production.

Our view: As expected, world tin production recovered well from COVID restrictions, exceeding 2019 and 2020 levels. We do not expect further COVID-related issues and foresee production to continue rising in 2022, with some 4% growth forecast.

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Malaysia Smelting Corporation (MSC) will end the year on a positive note, following commissioning of its new smelter and news that its force majeure will soon be lifted.

MSC is one of the world’s largest tin smelters, producing some 22,400 tonnes in 2020 – the third highest globally. However, in June 2021, the company was forced to cease operations due to coronavirus control measures in Malaysia.

COVID cases in the country began picking up in May 2021 and peaked at some 24,000 new cases per day that August. To cope with the rapid rise, the Malaysian government implemented significant control measures – including work-from-home requirements, with no more than 30% of a company’s workforce allowed on-site. As a result of the significantly reduced workforce, MSC were forced to declare force majeure.

Since September, however, infection rates have been falling in Malaysia. New recorded cases were just 4,626 on 1 November 2021 and approaching the government’s target of just 4,000 cases per day. As the number of cases have fallen, restrictions for companies have been relaxed; in September, it was reported that 80% of MSC’s workforce was allowed back to the plant.

With operations returning to normality, MSC is now looking to lift its force majeure.

“Barring unforeseen circumstances, we do plan and hope we can lift it by month end”, MSC CEO Dato’ Dr Patrick Yong told ITA. However, even with the force majeure in place, the company has “spared no effort in returning tin to tollers, the best we possibly could”. Some 30% of MSC’s business is tolling, where tin concentrate suppliers can have their material treated for a cost, with the resulting metal returned to them for sale.

On top of resuming normal operations at its Butterworth smelter, the company has successfully completed hot commissioning of its new smelter at Pulau Indah, Port Klang. “The new smelter at Pulau Indah has been running well at an initial slow place”, Yong said, “We hope to pick up speed very soon.” The new ISASMELT technology will allow the company to process lower grade ores, while the facility boasts double the capacity of Butterworth.

MSC plans to gradually switch production to the new smelter, running both the Butterworth and Pulau Indah smelters simultaneously for a short period.

Our view: The return of MSC to the tin market will benefit many; consumers will be glad of additional metal, while the material will also increase liquidity on the LME. We expect the increased capacity at MSC to be well-utilised as demand for tin increases due to new technologies.

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In total, ITA estimates that 327,200 tonnes of refined tin were produced in 2020. This was a nearly 8% drop in production compared to 2019 levels, which had already fallen some 5% from 2018.

ITA also surveys global tin smelters to compile the annual list of the world’s largest producers. In 2020, these top 10 companies produced 69% of the world’s tin, down from 76% in 2019.

The drop in output from the group can be primarily attributed to the significant decline in production from PT Timah. The company more than doubled production in 2019 after export regulations forced many of the country’s private smelters to cease operations. According to PT Timah’s annual report, some of these smelters were rented to the company, increasing their capacity significantly. However, many private smelters have resumed production, likely ending this deal with PT Timah.

In China, production began the year slowly as the coronavirus impacted raw materials supply. However, the larger companies in the top 10 were able to ride out the disruptions. As a result of the changes in Indonesia, Yunnan Tin retook the top spot on the list.

South America was significantly impacted by the coronavirus, with smelters in Brazil, Peru, and Bolivia closed for an average of two months in the early part of the year. The lengthy closure of EM Vinto (Bolivia) saw it move out of the top 10 for the for the first time. A full year of production from the new B2 tailings reprocessing plant enabled Minsur to keep production steady year-on-year despite the disruptions.

Our view: It is unlikely that we will see another year quite like 2020. Enforced smelter closures are not common normally, but synchronous stoppages across the world are unheard of.

Most smelters now have extensive safety measures in place to prevent COVID entering the plants, and so we feel it is unlikely that further waves of the virus could prevent production for significant periods. With that in mind, we forecast a rebound in refined tin production in 2021 back to 2019 levels.

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Upstream

The second week of February usually sees smelters return to full production after the Chinese Spring Holiday Festival. Most Chinese smelters lower their output for the week-long holiday. In fact, typical Q1 refined tin production is around 2,300 tonnes lower than the average quarter. However, due to the virus outbreak, many delayed returning to work.

In an ITA survey of Chinese smelters, most private operations thought they would restart full production at the end of the month. Government-owned operations, including Yunnan Tin, returned as normal at the end of the extended holiday.

Around this, smelters are still attempting to navigate an unusually tight concentrate market. Whle we previously reported that the restart of mining at Baiyinchagan was being delayed, we also understand that imports from Myanmar are impacted by the virus. Miners are returning to work more slowly than normal as a precaution.

Logistics are the biggest bottleneck, with cross-provincial transportation at a standstill. Even if Myanmar mines were operating at full tilt, smelters in Gejiu – the main destination for the concentrates – would not benefit. According to our survey, the inflow of concentrates is completely blocked. Smelters without integrated mines are working through already low concentrate stocks.

Downstream

Our view: While the immediate impact to the supply and demand of refined tin appears to be relatively small, the continued logistical backlog and sluggish return to work further downstream could slow global consumption in 2020. However, in order to make their GDP growth target for this year, the Chinese government are more than likely to stimulate the economy, lessening the impact of the virus.

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The Chinese concentrate market has been increasingly tight throughout 2019, caused in part by lower domestic output after the closure of the Baiyinchagan mine and by the reduced inflow of raw materials from Myanmar. Imports of concentrate from the neighbouring country have fallen by almost 30% during the first half of 2019 compared to the same period last year.

As a result of the market conditions, Chinese smelters have already reduced their treatment charges by 20% in order to encourage deliveries of raw materials. Combined with the recent low prices on the LME and SHFE, which fell by 28% between their peak in late February and a six-year low on 27 August, profits at these smelters are reportedly pressured in the current market environment. As a result, 14 Chinese smelters (including Yunnan Tin) agreed to reduce production by 20,000 tonnes, compared to 2018.

Our view: Chinese refined tin production in the first half of the year fell by 8% YoY. While the maximum change in annual production could be 20,000 tonnes, higher tin prices might prompt some recovery in the tin concentrate market and increase the availability of raw materials to smelters once again. It remains to be seen, therefore, whether the full extent of these cuts will be realised in practice.

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Although much of the mining activity in the country is undertaken by artisanal or small-scale miners (ASM), many of these miners work together in local cooperatives. However, more than 200 mining licenses were denied by the government, the majority of which belonged to these groups. The Rwandan government claims ASM cooperatives have unsafe mining practices, which it is attempting to improve. The minerals sector, which the government is aiming to streamline, has been the subject of illegal activity and investor disputes. These disputes arise from disagreements with the investors after they failed to meet standards. Investors claim that the government broke its obligations to the contracts and accuse it of nationalising its minerals sector.

Despite these allegations, several mining contracts were awarded to local and foreign investors. The Karuruma smelter, operated by LuNa, a joint venture between Polish company Luma Holdings and Rwandan investment firm Ngali Holdings, was one of the few awarded a mining license. This license contains eight mining exploration licenses, which contain prospective areas for cassiterite (tin) and coltan (niobium-tantalum). The company is expected to invest at least $14.4 million over the four year contract. Also awarded a contract was Paragon Mining Industry, a Chinese investment which plans to bring $5.2 million to the country over the lifetime of its five year exploration license.

Our View: The Karuruma smelter, which was reopened in March this year, is part of the Rwandan government’s plan to prevent the country from being at the mercy of the volatile metals markets. The governments hopes that value-added products will help to stabilise the economy. However, the smelter is currently running below capacity, according to officials, despite being able to accept both tin concentrate and tin scrap. The move by LuNa into minerals exploration appears to indicate that the company are looking to address the feedstock issue, and should result in stable production from the smelter.

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Environmental inspection teams were sent to eight provinces, representing the country’s major nonferrous metals production areas. Some of the smelters are expected to remain idle for more than a month due to plant relocations or equipment maintenance, with specific restart dates yet to be determined. For example, the Guangxi China Tin Group initiated a complete month-long shut down for maintenance on July 15. The total annual production capacity of tin smelters involved approaches 110,000 tonnes, with output in 2015 of some 70,000 tonnes accounting for around 45% of the national total.

The smelters’ centralized shutdown has lasted for nearly a week so far, which has caused some initial tightness in supply. The China domestic tin price jumped sharply on Wednesday, with the Shanghai tin price rising to a high of 121,900 yuan, while the spot price also climbed to about 121,000 yuan, representing an increase of over 3% from around 117,000 yuan last week. If the cuts are extended, then the domestic supply tightness will be exacerbated in the short term, leading to continued upwards pressure on domestic tin prices.

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The global study involved collection of survey responses on a range of questions relating to primary smelting and refining. After supplementing the data with publicly available information over 98% of primary refined tin production in 2015 was represented.

Responses indicated that a 5% forecast fall in primary refined tin production is anticipated in 2016, with South America the only region for which an increase in production is expected. The weighted average of tin content in discarded slag was 1.4% Sn, with a range of 0.2% to 4.0%, while plant tin recoveries to final product averaged 97%, although Chinese data was incomplete for both.

Fluctuations in the tin price, adequacy of raw material supply, the environment and regulatory developments were cited by participants as the main factors and challenges affecting operations now and looking forward.

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