The Bolivian state-owned smelter, Empresa Metalúrgica Vinto, has revealed that refined tin production fell by 3.1% year-on-year to 12,637 tonnes in 2017, although revenues increased by 11% to some US$ 255 million, according to local sources.
We believe that the small decline in production last year was likely a result of disruption related to a month-long maintenance shutdown at the Vinto smelter in July to replace the brick lining inside its Ausmelt furnace. Official production in the first of 2017 was reported as broadly equivalent to the same period of 2016 and we expect Bolivian mine production in 2017 to exceed 2016 overall, although official annual data is yet to be released to confirm this. The gross weight of tin concentrate exports also declined 84% year-on-year to 115 tonnes in the first nine months of 2017. Based on these two factors we think that the lower Vinto output is unlikely to be related to a shortage of raw material.
ITRI View: All three of the tin companies managed under the state umbrella corporation, Comibol, appear to have achieved strong financial results in 2017 relative to the previous year, largely a reflection of higher tin prices. Local media quoted the president of Comibol, José Pimentel, who claimed that both the Colquiri and Huanuni mining companies recorded profits exceeding US$20 million in 2017, while Comibol itself saw profits of US$5 million. Looming over the Bolivian mining sector is the threat of a hefty settlement related to its expropriation of mining assets from Swiss mining giant Glencore, including the Vinto smelter in 2007 and the Colquiri tin-zin mine in 2012. Glencore has recently set US$675 million as compensation for its nationalised assets, which could rise to US$700 million with interest. We remain optimistic about the future of Bolivian tin industry, with benefits of investments in processing capacity and infrastructure at the two state-owned mines likely to be realised in the coming years.