tin, page-5

From todays The Age
China to satisfy metal hunger here
Jesse Riseborough



YUNNAN Tin, the world's largest producer of the metal, is studying the acquisition of tin, nickel and copper mines in Australia to feed demand for the metals in China.

"Australia has abundant mineral resources and also a good investment environment," Xiao Jianming, chairman of the Kunming, Yunnan-based company said in an interview in Sydney. "If there is any opportunity to buy some assets in Australia, we will not lose it."

Surging demand in China, the biggest user of tin, copper, and iron ore, is prompting mining companies to search for supplies from Australia to Africa. Chinese companies were studying more than 15 minerals and energy projects in Australia worth $10 billion as of February.

"The Chinese are getting increasingly concerned; they want the product to go to them and they really want to control the output," Intersuisse analyst Peter Arden said. "It has ratcheted up a notch and it is a bit more aggressive than what we have seen."

Prices of tin, used to make solder for electronic equipment, rose to a record last month, driven partly by China's rising manufacturing output. Overseas investment in the fastest-growing major economy will ensure prices stay high, Mr Xiao said.

"According to demand consumption and the supply into the market now, the price will be sustainable," Mr Xiao said. "There are a lot of foreign manufacturers coming into China, especially in the electronic industry, so the demand for tin is growing."

Yunnan Tin shares, which have surged more than fourfold over the past year, rose as much as 6.3 per cent to a record 34.86 yuan ($A5.44). The company has bought a 33 per cent stake in Australian tin explorer YTC Resources and plans to use it to buy more projects, Mr Xiao said.

Shares of YTC have risen almost fourfold since they began trading three days ago.

Yunnan Tin is planning to sell 650 million yuan of bonds that can be converted into shares, to fund expansion, it said in a statement on Wednesday.

Chinese companies "used to invest in projects and share some of the risk of the project but now they are going direct to the companies and taking very substantial positions," Mr Arden said.