From the International Tin AssociationAfter a sharp ~5% drop in...

From the International Tin Association

After a sharp ~5% drop in price on March 19th, following the announcement of RKAB and export license approvals in Indonesia, LME tin prices have resumed their upward trajectory, with three-month price rebounding to approximately $28,500. Trading volume on the JFX in March returned to normal, totaling 3,800 tonnes, only a 5% year-on-year decline. However, trading on the ICDX has yet to recommence. Despite the resumption of Indonesian exports, the spread between LME three-month price and cash price has tightened to such an extent that LME prices have entered backwardation this week, reflecting the tightness in supply. Meanwhile, in stark contrast, SHFE stocks in China continue to accumulate, now nearing 13,000 tonnes—the highest level in years—underscoring the divergent market dynamics between China and the rest of the world.

--> M23 rebels disrupt tin supply routes in key region of North Kivu Members of the M23 non-state armed group have continued to expand their territory in North Kivu, Democratic Republic of the Congo, an important region for global supply of the 3Ts – tin, tantalum, and tungsten. Since mid-2022, the M23 rebels have controlled areas between Lake Edward and Lake Kivu, a key trade route for minerals, including tin. It is reported that the rebels have blocked the two main roads into Goma, both from the north and the west, halting the transportation of goods into the provincial capital, home to two million people. Bintou Keita, head of the UN’s peacekeeping mission in the country, told the UN Security Council last week that 800,000 people have been displaced due to violence since the start of the year and nearly a quarter of DR Congo’s 100 million people are facing food insecurity. Keita added that M23 insurgents now occupy all former positions held by an international force that withdrew at the end of last year, with the M23 occupation reaching “unprecedented levels”. The Goma customs crossing between DR Congo and Rwanda is a key route for the export of artisanal mine production via the Tanzanian port of Dar es Salaam. Local media reports that a customs crossing between DR Congo and Uganda at Bunagana, a trade route to the Kenyan port of Mombasa, has been closed. Alternative routes from the region to east African ports – such as southwards into Rwanda via Bukavu customs on the southern shore of Lake Kivu, and northwards into Uganda via Goli customs northwest of Lake Albert – are substantially longer and more costly. Furthermore, eastern DR Congo border crossings have reportedly been operating reduced hours due to the conflict, which poses risk of further delays to concentrate shipments from east Africa to smelters in Asia. On 06 March 2024, ITSCI, a 3Ts due diligence and traceability programme, announced the suspension of mining operations in Masisi territory following M23 rebels taking control of the mineral transport route between Masisi and Goma. At the time of publication, ITSCI sites in North Kivu’s Walikale and Lubero territories were unaffected. Alphamin Resources’ Bisie mine, which represented 4.5% of global tin mine production in 2023, is located approximately 180 km west of Goma. Since the escalation of conflict at the start of 2024, concentrate exports from DR Congo have not seen a significant decline, falling just 5% in January 2023 from the previous month to 21,943 tonnes. More recent trade data is not yet available. Our view: ITA is not aware of current tin supply disruptions outside of Masisi territory, but ongoing conflict poses a threat to key supply areas and routes critical to the trade of tin concentrates. Delays may be expected as mineral shipments are rerouted further north and south away from rebel-controlled areas. --> Andrada ramps up production and produces first tantalum concentrate at Uis Andrada Mining (AIM: ATM; OTCQB: ATMTF) has released its operational results for the year ending 29 February 2024. The company continues to ramp up production with a 51% increase in tin-in-concentrate production from 2022, and the first tantalum concentrate produced in the final quarter. The Uis mine in Namibia, owned and operated by Andrada, began production of tin concentrates in late 2019 and has since been ramping up production. Production in the fourth quarter of the year ending 29 February 2024 increased to 231 tonnes contained tin, up 14.4% from Q3, in line with a 4.3% increase in ore processing to 238,022 gross tonnes. Tin-in-concentrate production stood at 887 tonnes for the 12-month period, up from 586 t in the previous reporting year. A 2.8% decline in grade of ore processed was offset by improved recovery, rising from 66% to 72%. In Q4 the company achieved an average tin price of $26,125 per tonne Sn. Average tin concentrate grades improved to 62% from 58% the previous quarter, with the introduction of the tantalum separation circuit in late 2023. The circuit enabled the production of 7.4 tonnes of tantalum concentrate in Q4, at a current production rate of 48 tonnes per annum, expected to increase to 83 tonnes per annum after implementation of an ore-sorting process. Andrada’s lithium pilot plant produced approximately 40 tonnes of saleable, technical-grade lithium concentrate, with production rates anticipated to increase to 100 tonnes per month by the end of March 2024. The company reported it is exploring offtake agreements for this material within the industrial and battery chemical markets. All unit costs remained at the lower end of management guidance during the year and decreased by over 10% in Q4 due to higher tonnages and improved efficiencies. C2 operating cash costs (which includes cash costs of production, selling expenses, smelting, and royalties) decreased in Q4 by 13% to $18,775 per tonne Sn, for an annual average cost of $20,173 per tonne Sn, while the all-in sustaining cost (AISC) decreased 13% quarter-on-quarter to $26,223 per tonne Sn. Looking forwards, the company highlighted recent investment from Orion Resource Partners. The royalty is to be used to expand production at the existing tin processing plant to 2,600 tonnes per annum (1,600 tpa contained tin) through the installation of a pre-concentration circuit incorporating ore sorting technology. Our view: The completion of the tantalum extraction circuit will benefit the company in both higher quality tin concentrates and the additional revenue (estimated to represent a 3-5% increase) from the sale of tantalum concentrates. Andrada’s progress with its lithium pilot plant also poses a significant opportunity for growth. We look forward to seeing continued optimisations and expansions at Uis. -->