New sources of tin mine supply John P. Sykes, Director, Greenfields Research Ltd (on behalf of ITRI Ltd)
New Sources of Tin Mine Supply - Dec 2012 - Greenfields Research / ITRI
May 24, 2015
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New sources of tin mine supply
John P. Sykes, Director, Greenfields Research Ltd (on behalf of ITRI Ltd)
New sources of tin mine supply
Contents
1 Costly alluvial production, competitive hard rock mines?
2 Decline in Asia & Americas, rise in Australia, Africa & Europe?
3 Less primary tin, dependence on other riches?
4 No more low capex-high opex, now high capex-low opex?
5 Conclusions: investment in new tin mine supply is required!
New sources of tin mine supply
Costly alluvial production,
competitive hard rock mines? Section 1 Section 2 Section 3 Section 4 Section 5
Alluvial and artisanal important for tin
mining in contrast to other base metals
Images: Greenfields Research
Hard rock mining costs becoming
competitive with alluvial mining
Data: ITRI
0
5,000
10,000
15,000
20,000
25,000
US
$/t
on
ne
Mining Processing Other
2015, Theoretical Net of By-Product Cash Costs Approximate grade of
new hard rock projects
Underground mine is a theoretical primary tin, underground mine in Australia, producing 7,500 tonnes of tin per year, with a processing recovery of 75%.
Open pit mine is a theoretical primary tin, open pit mine in Australia, producing 7,500 tonnes of tin per year, with a processing recovery of 75%.
Alluvial mine is a theoretical mine in Indonesia, producing 7,500 tonnes of tin per year, from a team of gravel pumps, with a 100% recovery.
Approximate grade of
current alluvial mines in
SE Asia
Hard or soft rock: Grade is king!
0%
20%
40%
60%
80%
100%
Alluvial Open Pit Underground
% b
rea
kd
ow
n o
f c
os
t in
pu
ts
Fuel Electricity Labour Other
2015, Theoretical Net of By-Product Cash Costs
Theoretical cost breakdown for a primary tin, open pit mine in Australia grading 0.5%,
producing 7,500 tonnes of tin per year, with a 75% recovery.
Theoretical cost breakdown for a primary tin, alluvial mine in Indonesia grading 0.2kg/m3, producing
7,500 tonnes of tin per year, from a team of gravel pumps, with a 100% recovery.
Theoretical cost breakdown for a primary tin, underground mine in Australia grading 1.0%,
producing 7,500 tonnes of tin per year, with a 75% recovery.
Vulnerable to fuel costs
Vulnerable to labour
costs
Data: ITRI
New sources of tin mine supply
Decline in Asia & Americas, rise in
Australia, Africa & Europe? Section 1 Section 2 Section 3 Section 4 Section 5
Developed versus developing world
labour rates versus fuel prices?
0
10,000
20,000
30,000
40,000
50,000
60,000
2011, GNI Per Capita (US$)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2007-11 GNI Per Capita CAGR (%)
Developed world
labour costs are
higher…
…but developing
world labour costs
are rising quickly
Data: World Bank
Developed nations a safer investment,
important for large capital projects
Country Ranking (of 181)
Canada 4th
Australia 5th
- -
USA 10th
- -
Germany 20th
- -
UK 25th
- -
Spain 27th
Country Ranking (of 181)
Peru 56th
- -
China 71st
Brazil 72nd
- -
Indonesia 111th
- -
Bolivia 125th
- -
DR Congo 159th
Rankings based on Greenfields Research’s proprietary mining political risk ranking system. The ranking system correlates economic data sets
that cover most of the world’s countries (such as the Transparency International Corruption Index, the World Bank Doing Business dataset and
GDP/land area) with well known mining industry political risk surveys, including the Fraser Institute, Behre Dolbear and ResourceStocks, to get
a system which ranks all countries by their suitability for mining, not just those in the mining industry surveys.
Data: Greenfield Research
Exchange rates important, stronger
currencies mean higher costs
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
2006 2007 2008 2009 2010 2011
Exchange rates (to US dollar) indexed to 2006
Indonesian Rupiah (IDR) Chinese Renminbi (CYN)
Bolivian Bolivano (BOB) Brazilian Real (BRL)
Australian Dollar (AUD)
Weaker
Stronger
Indonesian Rupiah affects
marginal costs in tin. A
stronger Rupiah means
higher long term tin prices Data: World Bank
New sources of tin mine supply
Less primary tin, dependence on
other riches? Section 1 Section 2 Section 3 Section 4 Section 5
Tin industry uneconomic without by-
products
0%10%20%30%40%50%60%70%80%90%
100%
2016 estimates of revenue shares for tin producing mines and mine projects
Tin Aggregates Copper Iron Ore Mineral Sands Niobium Silver Tantalum Tungsten Lead/Zinc
Data: ITRI
Tin mining will become more
dependent on by-products
Copper
Australia, China,
Germany,
Kazakhstan,
Peru, UK
Silver
Australia,
Canada,
China,
Kazakhstan,
USA
Lead
China
Zinc
Australia,
Bolivia,
Canada, China,
Germany, UK,
USA
Antimony
China
Indium
Australia, Canada,
China, Germany
Gallium
China,
Germany
Tungsten
Australia, Canada,
Egypt, Kazakhstan,
Mongolia, Myanmar,
Portugal, Russia,
Spain, UK, USA
Tantalum
Australia, Burundi,
Congo, Egypt,
Kazakhstan,
Rwanda
Niobium
Brazil,
Burundi,
Nigeria
Iron Ore
Australia,
Kazakhstan
Molybdenum
Canada Titanium
Kazakhstan,
Malaysia
Zirconium
Brazil
World Tin Mine By-Products (2017 est.)
Images: Shutterstock, www.csksg.com, www.tradekorea.com,
www.cdves.com, American Elements, Wikipedia, www.made-in-
china.com; www.images-of-elements.com
Lithium
Czech Rep. Aggregates
Malaysia
Data: ITRI
New sources of tin mine supply
No more low capex-high opex, now
high capex-low opex? Section 1 Section 2 Section 3 Section 4 Section 5
Dominated by small, private
companies and state miners
~25,500t, 9.4%,
Private/Public, Peru
~30,000t, 11.1%,
State/Public, Indonesia
~27,000t, 10.0%,
State/Public, China
~9,200t, 3.4%,
State, Bolivia
~10,500t, 3.9%,
Private, China
~3,000t, 1.1%, Public,
Australia
~3,500t, 1.3%, Public,
Malaysia/Indonesia
~3,500t, 1.3%, State,
Vietnam
~2,500t, 0.9%, Private,
China
~2,000t, 0.7%, Co-op,
Brazil
Images: Company websites, ITRI, Wikipedia Data: ITRI (2012, mined production estimates – total 271,300 tonnes)
Substantial investment required in new
tin supply, bigger companies required
Company Project Capex
(US$M)
Capacity
(t/y Sn)
Capex
(US$/t/y)
Source
Consolidated Tin Mines Mt Garnet 124.0 3,050 40,700 Scoping 2010
Kasbah Resources Achmmach 167.0 6,880 24,300 Pre-Feasibility 2012
Metals X Rentails 173.2 5,300 32,700 Feasibility 2009
Stellar Resources Heemskirk 108.0 3,900 27,700 Scoping 2011
Venture Minerals Mount Lindsay 198.0* 2,400 82,500 BFS 2012
Total & average 770.2 21,530 35,773
Total new mine supply required 2011-15: 70,000t/y
Average capital cost per tonne new capacity: $35,775
Total investment required in new supply: $2.5 billion
* Mount Lindsay is a tin-tungsten-magnetite project. About 37% of revenues are from tin and 41% from tungsten.
The tungsten plant in particular greatly adds to capital costs. Data: ITRI, Company websites
New sources of tin mine supply
Conclusions: investment in new tin
mine supply is required! Section 1 Section 2 Section 3 Section 4 Section 5
Many deposits, few real projects: time
and money needed to develop them
~130 known projects
~60 with historical
resources
10 with compliant
resources
4 at scoping
stage
1 at feasibility stage
~4.8Mt of estimated reserves
(USGS)
~3.2Mt as historical
resources
824Kt as compliant
resources
310Kt at
scoping
stage
90Kt at feasibility stage
Data: ITRI, Greenfields Research, USGS, Infomine, Company websites
New supply will have to enter the cost
curve lower than marginal alluvials
Data: ITRI/Greenfields Research
Operating (2012)
Brownfields
Greyfields
Greenfields New projects
need to enter the
cost curve here!
These projects
currently not
economic
Data: ITRI
New sources of tin mine supply
Conclusion
1 Alluvial tin supply falling to be replaced by hard rock mining.
2 Declining Asian mining, opportunities elsewhere in the world.
3 Increasing reliance on by-products as grades decline.
4 Future supply will have much higher capex, but lower opex.
5 New mines have to be lower cost than marginal alluvial mines.
Contact Details: John P. Sykes
Director, Greenfields Research
www.greenfieldsresearch.com
Today’s reference: ITRI Tin Industry Review 2011
Peter Kettle
Manager, Statistics & Market Studies
www.itri.co.uk
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