Tin at the crossroads
Michael Forrest talks to Peter Kettle of the International Tin Research Institute about the global future of the tin industry
Tin has been used for millennia, thanks to its low melting point (231°C) and capacity to form alloys with most metals. It is believed to have been used to make bronze some 5,500 years ago, and there is evidence for tin and copper mining in the Iberian peninsula around 3,000 years ago. Throughout history, tin has been used in a variety of products, from canons and bells to tin plate. More recently, its application in lead-free solders has dominated the global use of tin, although its regional distribution is far from even.
Where the market is
The Asian market takes the largest part of production at a little over 200,000 tonnes per year (t/y) of the 350,000t/y supply. This value has fluctuated by around 60,000t/y over the past decade. Of the Asian consumption, some 150,000t/y is used in lead-free solders (usually a tin, silver and copper alloy) with tin plate, alloys, chemicals and others, including float glass, accounting for the remainder. In Europe, total consumption is approximately 50,000t/y with tin plate being the largest market, followed by solder, chemicals and others. In the Americas, solder, tin plate and chemicals account for 40,000t/y of a 45,000t/y market.
These data are collated by the International Tin Research Institute (ITRI), a trade-funded organisation whose remit is to monitor and promote the use of tin. Its marketing director, Peter Kettle, explains ITRI has a goal of, ‘ensuring an innovative, competitive and sustainable supply chain and market for tin’. This supply chain is required to meet a demand that has been rising over the past 30 years at a rate of around 2% per annum. However, over the period 2000–2008, growth rates in demand exceeded 5% per annum.
This has been driven by increasing demand for lead-free solders (mainly in 2003–2006) that now account for more than half of all tin consumption. This electronic ‘glue’ has replaced lead, which is now banned in electronics as a result of its hazardous impact on the environment, and it is expected that the remaining lead in solders will be phased out over the next 10 years.
Predicting the future
ITRI has produced forecasts of the changing use of tin over the next decade. One of the greatest declines, they say, will be in miniaturisation of use, whether this is in the thickness of tin plate or the amount needed in an alloy. There will also be lower demand in conductive adhesives and in PVC stabilisers. Kettle predicts around 80,000 tonnes of consumption may be lost to these applications, which will be compensated by increasing solder use and new applications. These include tin in the manufacture of lithium ion batteries, which can extend charge life of the battery by a factor of three – a desirable feature for many mobile devices now in common use, such as laptops, phones, tablet computers and cameras. There has also been a move towards the use of lithium ion batteries in hybrid cars (the first batteries were nickel hydride). If this shift can win market acceptance in large numbers, it will transform demand for tin.
Other future uses of tin in hi-tech applications can be found in stainless steel. Nippon Steel has developed a new stainless grade that uses less nickel and no chromium, both of which have had supply issues in the recent past. For chromium, the issue has been that supply is limited to a few sources, principally South Africa, India and Kazakhstan, while for nickel it has been one of fluctuating prices – peaking at nearly US$55,000 per tonne in 2007 against today’s price of around US$18,000 per tonne. Nippon Steel also claims greater corrosion resistance and easier formability. Tin is also for the fore in the development of solar cells, where it is used to replace some of the rare earth elements such as gallium. Kesterite, a tin-bearing mineral containing 32.65% tin with the formula Cu2 (Zn,Fe) SnS4, used in cell manufacture has, in recent trials in an IBM research laboratory, been the first to cross the 10% efficiency barrier. Another energy saving application was first discovered in Russia during the Second World War – a 10% decrease in fuel consumption can be obtained by placing a tin alloy inside a fuel tank or line. Research is being undertaken to test the claim.
The politics of price
These changes, according to Kettle, have placed supply demands on the industry that have in the past caused volatile pricing, which in turn has led to a lack of investment. Most of this can be said to be a reflection of the structure of the industry. Some 37% of world production comes from small-scale or artisanal operations, with consequent uncertainty of production volumes and costs. For example, Indonesia, the joint largest producer in 2010 with China, recovered approximately 90,000 tonnes of tin of which 60% was from artisanal mines. In contrast, China only had 10% artisanal production. Artisanal production is mainly from alluvial (land and marine) or eluvial resources that allow the production of concentrates on site. In Indonesia, this is mainly from dredger-based gravel pumps. Although simple in technique, artisanal production is by no means economical with the majority having production costs of US$12,500–15,000 per tonne and forming the upper 40% of cumulative cost curve. Over the past 100 years the price of tin per tonne, in 2010 inflation-adjusted terms, has remained in the US$10,000–15,000 bracket for half of that time and in the US$5,000–10,000 for more than 20 years.
ITRI has also forecast the demand, price and supply moving forwards to 2015. It says prices will move forward from the US$20,000 mark to peak at US$35,000 in 2013, while the supply, measured by the number of weeks’ supply available to the market, will fall. Part of that scenario can already be seen in the gap between mine supply and refined tin production in China that is being filled by secondary production (scrap) and imports of concentrates. Chinese secondary refined production has increased from around 16,000 tonnes in 2004 to 46,000 tonnes in 2010. Over the same period it is estimated that Indonesian production will decline by as much as 20,000t/y while others will be able to increase production.
Rock the Kasbah
However, the major sources of increased future production will be hard rock mines in Australia, Brazil, Canada, Mongolia and Kazakhstan. They will be buoyed initially by increasing prices for tin, and supported by forecast rising demand. Some of these new mining projects will be based on known occurrences that have in the past been worked such as Consolidated Tin Mines Herberton Tinfields property in Queensland, and Tin International’s Gottesberg project in Germany while others, such as Kasbah Resources’ Achmmach project in Morocco, are building on past exploration.
What is common in these and other developing tin projects is that they are hard rock resources with compliant large-scale mineral reserves and resources, and many also have valuable co-product minerals. This gives a predictable economic cost outcome that can be judged against forecast demand and prices. Returning to the cash costs of producers exploiting hard rock shows that the majority have costs below US$6,000 per tonne, with some negative due to the contribution of co-product minerals. This, according to Kettle, is where the future of tin mining lies. Only time will tell if ITRI’s predictions will come to pass.