Oz tin primed to benefit from Indonesia’s loss

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ID 10045002
ID 10045002

Indonesia’s new trade ruling that producers could only sell maximum-purity ingots to boost export value have slumped its tin sales with China, driving the world’s top metals buyer and other importers to diversify its tin supplies away from reliance on the Southeast Asian nation.

In order to stop-gap supplies for its electronics industry requirement, China turned to an unlikely supplier, Myanmar, as well as other sources: Bolivia, Japan, Malaysia and LME stockpiles.

Image courtesy of [dan] \ FreeDigitalPhotos.net
Image courtesy of [dan] \ FreeDigitalPhotos.net
A recently completed pre-feasibility study by Stellar Resources on its Heemskirk Tin project in Tasmania, demonstrates that Indonesia’s loss is positive for Australian tin companies when it reported its technical and economic viability.

The study showed an annual production of 4,327 tonnes of tin in concentrate. This represents an 11% increase from the scoping study estimate.

Competitive direct mining and processing cash costs of US$12,268/t of tin in concentrate were also reported as well as a mine gate cash operating cost of US$14,389/t including mine and plant business sustaining expenditure and corporate overheads.

Adertisement

The project has an initial mine life of 7 years with potential to expand once additional drilling within the current resource is complete. Mining plan increased head grade to 1.06% tin from scoping study estimate of 0.93%.

Heemskirk has the highest grade, undeveloped tin resource in Australia, making it a major potential source of new supply. It has transport, power and water on the doorstep unlike many of its overseas counterparts.

Broker Phillip Capital said, “Stellar Resources is the cheapest tin equity exposure anywhere … We expect that the results of the PFS will be the basis of a decision by an industry partner to buy a share of the project.”

A Macquarie research reports that Ausralia can expect to see an increase in demand for tin with the rise of tablets and smart phones.

According to Proactive investors Australia, although the electronics manufacturing industry has run down stocks of tin solder over the last two years, the rise in shipments is a positive indicator for the future of tin.

This is supported by Macquarie’s data that suggests the market could be moving towards a period of re-stocking, which could add to an improved outlook for tin.