Tin is a critical mineral that many people often overlook or underestimate its significance. Despite having a history that stretches back to ancient times, it is often dwarfed by other critical minerals such as cobalt, lithium or rare earth elements owing to its relatively less-spoken-of role in modern industries.
However, it is a mineral that plays a pivotal role in the production of many common items that we depend on every day, such as consumer electronics, packaging materials, and alloys for the aviation and automotive industries. Tin’s resistance to corrosion and its malleability make it an ideal material for the production of solder, used to join electronic components on printed circuit boards.
Mining dominated by countries with questionable practices
Tin, a silvery-white metal, is mined mostly as cassiterite ore across the world. It is abundantly mined in Bolivia, Myanmar, Peru, Indonesia, Russia, and Brazil, among other countries.
Despite tin’s crucial role in various global industries’ operations, it remains a critical mineral that faces several challenges in its supply chain, including the risk of geopolitical conflict and other supply chain issues. As a result, there are increasing concerns about the long-term availability and sustainability of this mineral.
The concerns arise from the geopolitical risks affecting a number of the larger producing countries.
China and Indonesia, which account for more than half of the global supply of tin, have had issues with illegal mining and processing.
One the largest suppliers globally, the San Rafael de Minsur Mining Unit in Peru, recently was beset by protests and suspended operations for two months, affecting 9% of global production.
In Myanmar, the International Tin Association (ITA) reported this week that Myanmar’s United WA State Army (UWSA) is planning to suspend mining work in the area of Myanmar that it controls, representing about 10% of the world’s tin concentrate supply. This will impact Chinese tin production as it sources about three quarters of its imports from Myanmar.
These disruptions to supply are having an impact on pricing, although not all the movements make sense.
When Russia invaded Ukraine in early 2022, the tin price exploded, jumping up to US$50,050/t in early March, before declining just as quickly as stockpiles doubled. By October 2022, the price had slumped to US$18,125/t before starting a rocky road upwards again. It is presently trading at US$27,250/t with stockpiles dropping dramatically.
In the past six months, stockpiles have dropped by two thirds from 4,625t in October to 1,555t today, with half the drop in the past month.
Making tin sustainable will likely impact supply in some areas
Over the years, various initiatives have been established to promote responsible tin production, leading to the implementation of guidelines and standards to ensure that the industry sources tin sustainably. For example, the Tin Stewardship Initiative (TSI) was launched to ensure that the tin industry meets a specific set of standards related to ethical practice, environmental responsibility, human rights, and supply chain transparency. A key feature of the standards is the elimination of child labour that has been rampant historically in the sector.
The TSI has created a certification system that enables companies that adhere to the initiative’s standards to earn and maintain certified status. This initiative has improved the sustainability of tin mining, especially in regions where the practice is not adequately regulated, leading to a sustainable supply chain that benefits all parties involved.
Tin demand likely to follow other EV mineral demand curves
From a demand perspective, tin remains vital in the production of an array of products and increasingly found in green technologies such as electric vehicle batteries. Along with increased demand for commodities such as lithium, cobalt, nickel and graphite, tin’s demand in the EV sector (as solder) has seen it move to the highest proportion of demand at 47%.
The challenges facing the tin industry must not be underestimated, and there is starting to be greater awareness of the metal’s critical and strategic importance to society.
With the right investment, attention and sustainable policies, it is possible to safeguard the supply of this critical mineral for present and future generations. With increasing stimulus from western Governments, including the US and European Union, there is good potential for a new generation of tin mines to emerge over the next decade.
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