Tin prices are at record highs. Here’s why they could double...

Tin prices are at record highs. Here’s why they could double again

A tin expert and metals trader who played the last tin cycle as a hedge fund manager with Trafigura says the tightly strung market could see prices bound beyond current record highs to as much as US$80,000/t.

London-based ‘tin guru’ Mark Thompson made the call recently as the three-month tin contract on the London Metals Exchange hit a record high of US$48,650/t on March 8.

It is now fetching around US$43,000/t, a near tripling of prices over the past two years.

Thompson had a previous price target of US$30-35,000/t to incentivise new production of tin, which is in extremely short supply with just days of stock left on the key London and Shanghai metal exchanges.

But that hasn’t happened, and a ‘perfect storm’ is brewing that could push tin prices into a new paradigm.

He told * his new target is US$50,000-80,000/t, with higher than expected inflation and the rapid growth of electric vehicle production behind the change in outlook.

Thin pool of explorers to chase tin growth

Given the small size of the tin market and its rarity there is only a small pool of explorers to bet on in the Australian space.

One, Venture Minerals (ASX:VMS), owns the relatively advanced Mount Lindsay tin and tungsten project near the Renison mine in Tasmania.

The junior started exploring the asset 15 years ago and has spent $35 million on exploration including 83,000m of drilling, but it faded into the background after a 2012 open pit feasibility study as tin prices declined.

Now that prices are at record levels and tin is beginning to emerge as a critical metal for the green energy revolution, Venture is more bullish on its flagship asset, which contains 81,000t of tin metal and 3.2Mt of tungsten at a tin equivalent grade of 0.4% at a 0.2% cutoff.

It is working on a new study on developing an underground mine at Mount Lindsay with the ESG benefit of its connection to hydro power.

Venture Minerals MD Andrew Radonjic said he wasn’t surprised to see predictions that prices could increase further given tight supplies and the International Tin Association’s prediction at least 60,000t more tin a year will be needed for electric vehicles by 2030.

While the feasibility study won’t be released until later this year Radonjic said previous underground scenarios showed Mount Lindsay “looked quite attractive at half this price.”

“We think we’re in a sweet spot for a number of reasons,” he said.

“One is we’re on the west coast of Tasmania in a tin district and we’re surrounded by old tin mines and Australia’s only tin mine in Renison-Bell.

“We’ve already spent $35 million on our project, we’ve got hydro power running through our tenement which ticks a big ESG component, we’ve already decided to go underground.

“There’s a lot of reasons why the world needs a lot of tin, but investors are demanding ESG-compliant tin and that’s where I see a sweet spot in the market.”