COLUMN-Tin mining - Cornish dreams and Myanmar reality: Andy Home
Reuters
(Repeats Aug. 22 item. The opinions expressed here are those of the author, a columnist for Reuters.)
By Andy Home
LONDON, Aug 22 (Reuters) - Hope springs eternal in Cornwall when it comes to reviving tin mining in this southwestern corner of the United Kingdom.
Canada's Strongbow Exploration is the latest to try to rekindle the dying embers of what once was one of the world's largest tin-mining hubs.
It has just bought out of administration the South Crofty mine, which was the last Cornish tin mine to close in 1998.
Many others have tried and failed to get South Crofty producing again.
There is still plenty of tin in the area, albeit submerged beneath the water that has flooded the mine since closure.
The real issue is price.
Low prices laid the Cornish tin industry low in the 1990s. And although the current London Metal Exchange (LME) tin price of around $18,500 a tonne is much higher than back then, it is a far cry from the peak of $33,600 recorded in 2011.
The price slide in the intervening five years derives in part from the same sort of supply shock that sent prices spiralling in the early 1990s.
Then it was the surprise emergence of a new mega-mine in Brazil. Today it is the equally unexpected impact of a huge, new tin-mining area in Myanmar.
BRAZIL THEN...
No one knew there was tin at what became the Bom Futuro mine in Brazil until a chance discovery by loggers in 1986.
Wildcat miners, termed "garimpeiros" in Portuguese, flooded into the area in their thousands.
By 1989 Bom Futuro is thought to have been producing at an annual rate of almost 30,000 tonnes of contained metal in concentrates.
Exact numbers are hard to come by since Bom Futuro existed in the shadows of the global organised tin trade.
Operated on an artisanal basis, much of its output was smuggled out of the country until the government and the official sector finally wrested legal control from the "garimpeiros" in 1992.
By that stage Bom Futuro was almost a ghost mine, a victim of the price collapse it had triggered by flooding the tin market with surplus supply. (This potted history comes from "The International Tin Trade", by Peter Roddy, published in 1995.)
When LME trading resumed in 1989 after a break occasioned by the collapse of the International Tin Council, the tin price made it as high as $10,000 per tonne. By 1991, it had slumped to half that. Stocks ballooned to 47,000 tonnes over the same period.
The "Happy Future" mine translated into an unhappy end for the Cornish mining sector.
Geevor and Mount Wellington closed in 1991. South Crofty struggled on for several more years, selling surplus land to offset operating losses, before succumbing to the inevitable in 1998.
...NOW MYANMAR
The parallels between Bom Futuro back in the late 1980s and the Man Maw tin-mining hub in Myanmar today are uncanny.
As with Bom Futuro, no one saw the new supply coming.
The first indication came in the unlikely form of China's trade figures, which from May 2013 started showing a steady flow of raw material into the country from its neighbour.
Chinese imports of tin concentrates had totalled just 32,400 tonnes (bulk weight, not metal contained) in 2012.
That figure mushroomed to 96,600 tonnes in 2013; almost all of it, 89,100 tonnes, coming from Myanmar.
As the flows steadily increased over the course of 2014 and 2015, the global tin industry woke up to the existence of a major new driver of mine supply.
China's imports of Myanmar material totalled 285,600 tonnes last year, equivalent to around 41,000 tonnes of tin metal, according to industry group ITRI.
To put that figure into context, ITRI estimates world production of refined tin at 340,600 tonnes last year.
Myanmar, in other words, now accounts for well over 10 percent of global tin mine supply. Just a couple of years ago, the figure was close to zero.
DEFICIT DREAMS
The running ironic theme of the tin market for many years has been the fear of structural supply shortfall.
The mining boom of the last decade passed tin by. While major resource houses poured investment into the likes of copper and iron ore to feed Chinese demand, spending on new tin mines was negligible.
Indonesia, the world's largest tin exporter, has seen production and exports steadily fall since 2012, partly due to degrading mine economics but partly because of a government clampdown on the anarchic cluster of independent tin mines and smelters operating on the islands of Bangka and Belitung.
Indonesia is an echo of the free-wheeling days of the Bom Futuro wildcatters and the Brazilian authorities' five-year battle to control them.
Now it is Myanmar's turn to emerge from the shadows as a major new source of the metal.
ITRI, the official tin producers body, has itself only recently got into Myanmar to see what's happening.
Its assessment is that production is plateauing at around 50,000 tonnes per year as the easily accessible reserves are exhausted.
But somewhat ominously, it also notes that while smaller operators have left the area, bigger players are mechanising what was previously an artisanal operation.
And "there is still significant potential for the discovery of new ore resources". ("Myanmar tin production may have reached peak", Aug. 18, 2016).
Man Maw is the hard reality that looms large over Cornwall's dreams of reviving its historic tin sector.
Perhaps tin is not the answer at all.
Consider, for example, the Hemerdon tin mine in neighbouring Devon which closed in 1944.
It has just been put back into action by Wolf Minerals , not as a tin operation but as a tungsten mine with a bit of tin by-product.
Strongbow's attempt to revive South Crofty would benefit greatly if the company could find something other than tin in those flooded shafts.
How about lithium? Unlike tin with its flat-line usage profile, there's a metal with a very bright future indeed!
