The potential for investing in tin

by Ina King (Potgieter) March 22, 2022

Tin is a relatively scarce element, with only about 2 parts per million (ppm) contained in the earth’s crust. This seems a paltry amount when compared with 94 ppm for zinc, 63 ppm for copper, and 12 ppm for lead. In 2021, tin recorded an all-time high with a year-to-date gain at the time of nearly 80%. The appreciation of its price was attributable to bullish supply and demand dynamics. The effects of the COVID-19 pandemic helped slow tin production and disrupt its concentrate supply. In the midst of this low supply, the increased requirement for tin in the electronics sector has created a higher demand for the metal.

Tin supply is expected to recover in the not too distant future and growth in demand is expected to remain strong. This is due to increasing tin consumption from green energy transition technologies, like electric vehicles, and the transition to 5G. Although supply will recover, the increased demand indicates that the refined tin market may remain in deficit, contributing to even more appreciation in tin prices.

Approximately 300 000 tons of tin is produced worldwide annually, making it one of the smallest metal commodities in terms of market size. Approximately 25% of tin is produced in China and Indonesia, followed closely by Myanmar, with significant production in South America (Peru, Bolivia and Brazil). Only four African countries actively mine the metal, and we take a closer look at those later in this article.

Applications for processed tin set to further drive demand

Tin use by application in 2021 was dominated by solder, which accounts for just less than 50% of its current use, with its use as a stabiliser for PVC, and plating metal making up another 25%. As can be seen from the pie chart below, the use of tin in batteries falls near the bottom end of application-use with just 7%. However, as the transition to electric vehicles increases, demand for its use in battery applications will increase too. Watch this space!

Demand for tin for use as solder is also set to rise in response to more countries promoting the uptake of electric vehicles and from the rollout of 5G networks, as some countries’ mobile communications network infrastructures get replaced or, at the very least, upgraded to accommodate 5G requirements. It is expected that 5G will be available to approximately 65% of the global population by the year 2025. One expects a great deal of work on these networks throughout this time frame and beyond, so keep your eye on tin and other metals like indium, gallium, and germanium used in electronic devices.

Opportunities for investing in tin

The Democratic Republic Of Congo (DRC) is the only African country to make it onto the top 10 tin-producing countries in the world and is ranked number 9. There are, however, a total of four African countries with tin mining projects underway. They are:

• DRC 1 project
• Morocco 2 projects
• Namibia 3 projects
• South Africa 2 projects

Last year, the Financial Times reported a seven-year price high for tin. The low levels of current investment in this industry indicate that there may be insufficient new projects to satisfy the demand for tin in the near future. However, the tin industry, with the combination of rising demand and a supply deficit, has all the hallmarks of an impending bull market. This could be the opportunity mining investors are looking for.

To benefit from comprehensive project details, investors in and suppliers to the tin mining industry can register with Projects IQ (Pty) Ltd, Africa Mining IQ’s portal to updated projects across all phases of the mining lifecycle, from grassroots to completed projects. This information includes names and contact details of mine owners and project engineers, ensuring that you have all the information necessary to make an informed decision on the way forward for your business.