Date post: | 24-May-2015 |
Category: |
Documents |
Upload: | john-p-sykes |
View: | 830 times |
Download: | 2 times |
Defining the future of tin mining
ITRI International Tin Conference, Cape Town – South Africa, 25 April 2012
John P. Sykes – Director, Greenfields Research Ltd
Defining the future of tin mining
Contents
1 Mine type: costly alluvial production
2 Geography: decline in Asia
3 By-products: dependent on other riches
4 Company type: dealing with capital costs
5 Conclusions: identifying competitive new tin supply
Defining the tin mine of the future
Mine type – costly alluvial
production
Alluvial and artisanal important for tin
mining in contrast to other base metals
Images: Greenfields Research
Alluvial & artisanal mining dominate
marginal production
Hard rock Alluvial Artisanal (non-alluvial)
Data: ITRI/Greenfields Research
2012 Q1 Tin Cash Price
293,100t (est.)
Hard or soft: Grade is king!
Theoretical change in cost due to changes in ore grade for a primary tin,
alluvial mine in Indonesia, producing 7,500 tonnes of tin per year, from a
team of gravel pumps, with a 100% recovery.
Data: ITRI/Greenfields Research
Approximate
grade of S.E.
Asian alluvial ores
Mining Processing Other
Hard or soft: Grade is king!
Data: ITRI/Greenfields Research
Underground mine is a theoretical primary tin, underground mine in Australia,
producing 7,500 tonnes of tin per year, with a processing recovery of 75%.
Open pit mine is a theoretical primary tin, open pit mine in Australia, producing 7,500
tonnes of tin per year, with a processing recovery of 75%.
Approximate grade
of new hard rock
projects
Mining Processing
Other
Alluvial mining vulnerable to oil prices
Theoretical cost breakdown for a primary tin, open pit mine in Australia grading 0.490%,
producing 7,500 tonnes of tin per year, with a 75% recovery.
Theoretical cost breakdown for a primary tin, alluvial mine in Indonesia grading 0.215kg/m3,
producing 7,500 tonnes of tin per year, from a team of gravel pumps, with a 100% recovery.
Theoretical cost breakdown for a primary tin, underground mine in Australia grading 1.700%,
producing 7,500 tonnes of tin per year, with a 75% recovery.
Data: ITRI/Greenfields Research
Fuel Electricity Labour Other
Vulnerable to labour
costs
Vulnerable to fuel costs
Alluvial & artisanal mining in decline
Hard rock Alluvial Artisanal (non-alluvial)
Data: ITRI/Greenfields Research
341,400t (est.)
Defining the future of tin mining
Geography – decline in Asia
Asian countries dominate production,
very few developed world tin miners
World Tin Mine Production (2012 est.)
Data: ITRI/Greenfields Research
Marginal alluvial and artisanal mining
in Asia & South America vulnerable
Asia
Africa
Australasia
South America
Europe/Russia
Data: ITRI/Greenfields Research
293,100t (est.)
Developed versus developing world
labour rates versus fuel prices?
Data: ITRI/Greenfields Research
Developed nations a safer investment,
important for large capital projects
Country Ranking (of 181)
Canada 4th
Australia 5th
- -
USA 10th
- -
Germany 20th
- -
UK 25th
- -
Spain 27th
Country Ranking (of 181)
Peru 56th
- -
China 71st
Brazil 72nd
- -
Indonesia 111th
- -
Bolivia 125th
- -
DR Congo 159th
Rankings based on Greenfields Research’s proprietary mining political risk ranking system. The ranking system correlates economic data sets that cover
most of the world’s countries (such as the Transparency International Corruption Index, the World Bank Doing Business dataset and GDP/land area)
with well known mining industry political risk surveys, including the Fraser Institute, Behre Dolbear and ResourceStocks, to get a system which ranks all
countries by their suitability for mining, not just those in the mining industry surveys.
Data: Greenfields Research
Exchange rates important, a stronger
Rupiah raises marginal costs
IDR8,000:USD1.00
IDR10,000:USD1.00
IDR12,000:USD1.00
312,600t (est.)
Data: ITRI/Greenfields Research
Asian mining in decline, replaced by
developed world production
World Tin Mine Production (2017 est.)
Data: ITRI/Greenfields Research
More developed world production
coming on-stream
Data: ITRI/Greenfields Research
Asia
Africa
Australasia
South America
North America
Europe & Russia
341,400t (est.)
Defining the future of tin mining
By-products – dependent on other
riches
Tin mining is dependent on a wide
variety of by-products
Copper
Australia & China
Silver
China
Data: ITRI/Greenfields Research
Images: Shutterstock, www.csksg.com, www.tradekorea.com,
www.cdves.com, American Elements, Wikipedia
Lead
China
Zinc
Bolivia, China
Antimony
China Indium
China
Gallium
China
Tungsten
Egypt, Mongolia,
Myanmar
Tantalum
Burundi, Congo,
Rwanda
Niobium
Brazil, Burundi,
Nigeria
World Tin Mine By-Products (2012 est.)
By-products complicate economics
None
Copper
Tantalum
Tungsten
Zinc
Polymetallic
Other
Data: ITRI/Greenfields Research
293,100t (est.)
Tin industry uneconomic without by-
products
Data: ITRI/Greenfields Research
Cash Cost
NBP Cash Cost
293,100t (est.)
Tin mining will become more
dependent on by-products
Copper
Australia,
China,
Germany,
Kazakhstan,
Peru, UK
Silver
Australia, Canada,
China, Kazakhstan,
USA
Data: ITRI/Greenfields Research
Images: Shutterstock, www.csksg.com, www.tradekorea.com,
www.cdves.com, American Elements, Wikipedia, www.made-in-china.com
Lead
China
Zinc
Australia, Bolivia,
Canada, China,
Germany, UK,
USA
Antimony
China Indium
Australia,
Canada, China,
Germany
Gallium
China,
Germany
Tungsten
Australia, Canada,
Egypt, Kazakhstan,
Mongolia,
Myanmar, Portugal,
Russia, Spain, UK,
USA
Tantalum
Australia, Burundi,
Congo, Egypt,
Kazakhstan, Rwanda
Niobium
Brazil,
Burundi,
Nigeria
Iron Ore
Australia,
Kazakhstan
Molybdenum
Canada
Titanium
Kazakhstan
Zirconium
Brazil
World Tin Mine By-Products (2012 est.)
By-products will increasingly
complicate economics
Data: ITRI/Greenfields Research
None
Copper
Tantalum
Tungsten
Zinc
Polymetallic
Other
341,400t (est.)
Defining the future of tin mining
Company type – dealing with
capital costs
Dominated by small, private
companies and state miners
~44,000t, 15%,
Private/Public, Peru
~38,500t, 13%,
State/Public, Indonesia
~27,750t, 9.5%,
State/Public, China
~10,000t, 3.5%,
State, Bolivia
~7,000t, 2.4%,
Private, China
~6,750t, 2.3%,
Public, Australia
~5,000t, 1.7%,
Public, Indonesia
~3,500t, 1.2%,
State, Vietnam
~2,500t, 0.9%,
Public, Bolivia
~2,500t, 0.9%,
Private, China
Data: ITRI/Greenfields Research
Images: Company websites, ITRI, Wikipedia
Some privately-owned marginal
alluvial & artisanal mines vulnerable
Private
Public
State
293,100t (est.)
Data: ITRI/Greenfields Research
Financing adds to operating costs,
bigger companies may be required
Data: ITRI/Greenfields Research
NBP Full Cost
NBP Cash Cost
293,100t (est.)
Substantial investment required in new
tin supply, bigger companies required
Company Project Capex
(US$M)
Capacity
(t/y Sn)
Capex
(US$/t/y)
Source
Stellar Resources Heemskirk 108.0 3,900 27,700 Scoping 2011
Venture Minerals Mount Lindsay 144.6* 3,700 39,100 PFS 2011
Kasbah Resources Achmmach 85.3 5,600 15,200 Scoping 2010
Metals X Rentails 173.2 5,300 32,700 Feasibility 2009
Total & average 511.1 18,500 27,629
Total new mine supply required 2011-15: 70,000t/y
Average capital cost per tonne new capacity: $27,500
Total investment required in new supply: $1.925 B
Data: ITRI/Greenfields Research
* Mount Lindsay is a tin-tungsten-magnetite project. The tungsten
plant in particular greatly adds to capital costs.
Increasing role for public listed
companies and larger companies
Data: ITRI/Greenfields Research
Private
Public
State
341,400t (est.)
Defining the future of tin mining
Conclusions – identifying future
competitive tin supply
New supply will have to enter the cost
curve lower than marginal alluvials
Data: ITRI/Greenfields Research
Operating (2012) Brownfields Greyfields
Greenfields New projects need to
enter the cost curve
here!
341,400t (est.)
These projects
currently
uneconomic
Absorbing capital costs will be a
challenge for the industry
Operating (2012)
Brownfields
Greyfields
Greenfields
Data: ITRI/Greenfields Research
341,400t (est.)
Defining the future of tin mining
Conclusions
1 Alluvial tin supply falling to be replaced by hard rock mining.
2 Declining Asian mining, opportunities elsewhere in the world.
3 Increasing reliance on by-products as grades decline.
4 Future supply will have much higher capital costs.
5 BUT new mines have to be lower cost than marginal alluvial
mines.
Contact Details:
John P. Sykes
Director, Greenfields Research
www.greenfieldsresearch.com