In 2006, the Chinese government announced environmental reforms that forced smelters within 1 km of residential areas to be relocated. Located in the centre of Gejiu City, Yunnan, the smelter was deemed too close to residential areas. In 2013, Yunnan Tin began the process of relocating its main smelting facility.
YTC chose the Mengzi Economic Development Zone as the new home for its tin smelting operations. The company already has extensive operations in the area, having invested in copper and lead smelters there in 2011.
Commissioning of the new smelter, which began on 26 November 2020, has now been completed according to the press release.
The company has reportedly tested all sub-sections of the smelting project, and completed a test run of the complete process. Refined tin output, as well as economic and technical factors, have steadily improved over the process.
Currently, the smelter is running at around 90% of the designed capacity. YTC estimates that some 11,800 tonnes were produced between January and February.
Our view: YTC’s new smelter is similar to the previous iteration in Gejiu City. The Ausmelt furnace has a design capacity of 70,000 tonnes of refined tin per year, and can be operated with a high degree of automation. We expect output at the new smelter to stablise to design capacity levels in the coming months. Once this is achieved, we expect YTC to begin decommissioning the old smelter.