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Defining the Future of Tin Mining Geography
1. Defining the future of tin mining
ITRI International Tin Conference, Cape Town – South Africa, 25 April 2012
John P. Sykes – Director, Greenfields Research Ltd
2. Defining the future of tin mining
Contents
1 Mine type: costly alluvial production
2 Geography: decline in Asia
3 By-products: dependent on other riches
4 Company type: dealing with capital costs
5 Conclusions: identifying competitive new tin supply
3. Defining the tin mine of the future
Mine type – costly alluvial
production
4. Alluvial and artisanal important for tin
mining in contrast to other base metals
Images: Greenfields Research
5. Alluvial & artisanal mining dominate
marginal production
Hard rock Alluvial Artisanal (non-alluvial)
2012 Q1 Tin Cash Price
293,100t (est.)
Data: ITRI/Greenfields Research
6. Hard or soft: Grade is king!
Mining Processing Other
Approximate
grade of S.E.
Asian alluvial ores
Theoretical change in cost due to changes in ore grade for a primary tin,
alluvial mine in Indonesia, producing 7,500 tonnes of tin per year, from a
team of gravel pumps, with a 100% recovery.
Data: ITRI/Greenfields Research
7. Hard or soft: Grade is king!
Mining Processing Approximate grade
of new hard rock
Other projects
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%.
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%.
Data: ITRI/Greenfields Research
8. Alluvial mining vulnerable to oil prices
Fuel Electricity Labour Other
Vulnerable to labour
costs
Theoretical cost breakdown for a primary tin, alluvial mine in Indonesia grading 0.215kg/m3,
Vulnerable to fuel costs 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 1.700%,
producing 7,500 tonnes of tin per year, with a 75% recovery.
Theoretical cost breakdown for a primary tin, open pit mine in Australia grading 0.490%,
producing 7,500 tonnes of tin per year, with a 75% recovery.
Data: ITRI/Greenfields Research
9. Alluvial & artisanal mining in decline
Hard rock Alluvial Artisanal (non-alluvial)
341,400t (est.)
Data: ITRI/Greenfields Research
11. Asian countries dominate production,
very few developed world tin miners
World Tin Mine Production (2012 est.)
Data: ITRI/Greenfields Research
12. Marginal alluvial and artisanal mining
in Asia & South America vulnerable
Asia South America
Africa Europe/Russia
Australasia
293,100t (est.)
Data: ITRI/Greenfields Research
14. Developed nations a safer investment,
important for large capital projects
Country Ranking (of 181) Country Ranking (of 181)
Canada 4th Peru 56th
Australia 5th - -
- - China 71st
USA 10th Brazil 72nd
- - - -
Germany 20th Indonesia 111th
- - - -
UK 25th Bolivia 125th
- - - -
Spain 27th 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: Greenfields Research
15. Exchange rates important, a stronger
Rupiah raises marginal costs
IDR8,000:USD1.00
IDR10,000:USD1.00
IDR12,000:USD1.00
312,600t (est.)
Data: ITRI/Greenfields Research
16. Asian mining in decline, replaced by
developed world production
World Tin Mine Production (2017 est.)
Data: ITRI/Greenfields Research
17. More developed world production
coming on-stream
Asia South America
Africa North America
Australasia Europe & Russia
341,400t (est.)
Data: ITRI/Greenfields Research
19. Tin mining is dependent on a wide
variety of by-products
World Tin Mine By-Products (2012 est.)
Antimony Copper Gallium Indium Lead
China Australia & China China China China
Niobium Silver Tantalum Tungsten Zinc
Brazil, Burundi, China Burundi, Congo, Egypt, Mongolia, Bolivia, China
Nigeria Rwanda Myanmar
Data: ITRI/Greenfields Research
Images: Shutterstock, www.csksg.com, www.tradekorea.com,
www.cdves.com, American Elements, Wikipedia
20. By-products complicate economics
None Tungsten Other
Copper Zinc
Tantalum Polymetallic
293,100t (est.)
Data: ITRI/Greenfields Research
21. Tin industry uneconomic without by-
products
Cash Cost
NBP Cash Cost
293,100t (est.)
Data: ITRI/Greenfields Research
22. Tin mining will become more
dependent on by-products
World Tin Mine By-Products (2012 est.)
Antimony Copper Gallium Indium Iron Ore Lead Molybdenum Niobium
China Australia, China, Australia, Australia, China Canada Brazil,
China, Germany Canada, China, Kazakhstan Burundi,
Germany, Germany Nigeria
Kazakhstan,
Peru, UK
Silver Tantalum Titanium Tungsten Zinc Zirconium
Australia, Canada, Australia, Burundi, Kazakhstan Australia, Canada, Australia, Bolivia, Brazil
China, Kazakhstan, Congo, Egypt, Egypt, Kazakhstan, Canada, China,
USA Kazakhstan, Rwanda Mongolia, Germany, UK,
Myanmar, Portugal, USA
Russia, Spain, UK,
USA
Data: ITRI/Greenfields Research
Images: Shutterstock, www.csksg.com, www.tradekorea.com,
www.cdves.com, American Elements, Wikipedia, www.made-in-china.com
25. Dominated by small, private
companies and state miners
~44,000t, 15%, ~38,500t, 13%, ~27,750t, 9.5%,
Private/Public, Peru State/Public, Indonesia State/Public, China
~10,000t, 3.5%, ~7,000t, 2.4%, ~6,750t, 2.3%,
State, Bolivia Private, China Public, Australia
~5,000t, 1.7%, ~3,500t, 1.2%, ~2,500t, 0.9%, ~2,500t, 0.9%,
Public, Indonesia State, Vietnam Public, Bolivia Private, China
Data: ITRI/Greenfields Research
Images: Company websites, ITRI, Wikipedia
27. Financing adds to operating costs,
bigger companies may be required
NBP Full Cost
NBP Cash Cost
293,100t (est.)
Data: ITRI/Greenfields Research
28. Substantial investment required in new
tin supply, bigger companies required
Company Project Capex Capacity Capex Source
(US$M) (t/y Sn) (US$/t/y)
Stellar Resources Heemskirk 108.0 3,900 27,700 Scoping 2011
Venture Minerals Mount Lindsay 144.6* 3,700 39,100 PFS 2011
Kasbah Resources Achmmach 85.3 5,600 15,200 Scoping 2010
Metals X Rentails 173.2 5,300 32,700 Feasibility 2009
Total & average 511.1 18,500 27,629
Total new mine supply required 2011-15: 70,000t/y
Average capital cost per tonne new capacity: $27,500
Total investment required in new supply: $1.925 B
* Mount Lindsay is a tin-tungsten-magnetite project. The tungsten
plant in particular greatly adds to capital costs.
Data: ITRI/Greenfields Research
29. Increasing role for public listed
companies and larger companies
Private
Public
State
341,400t (est.)
Data: ITRI/Greenfields Research
30. Defining the future of tin mining
Conclusions – identifying future
competitive tin supply
31. New supply will have to enter the cost
curve lower than marginal alluvials
Operating (2012) Greyfields Brownfields
Greenfields
New projects need to
enter the cost curve
here!
341,400t (est.)
These projects
currently
uneconomic
Data: ITRI/Greenfields Research
32. Absorbing capital costs will be a
challenge for the industry
Operating (2012)
Brownfields
Greenfields
Greyfields
341,400t (est.)
Data: ITRI/Greenfields Research
33. Defining the future of tin mining
Conclusions
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 capital costs.
BUT new mines have to be lower cost than marginal alluvial
5
mines.
34. Contact Details:
John P. Sykes
Director, Greenfields Research
john.sykes@greenfieldsresearch.com
www.greenfieldsresearch.com
