The Implications of Uncertainty in Tin and Tantalum Mining
for the Future of the Electronics Industry
John P. Sykes Centre for Exploration Targeting (Curtin University & University of Western Australia)
Greenfields Research Ltd
Peter Kettle ITRI Ltd (formerly the International Tin Research Institute)
Contents
What can we learn about the future of tin and tantalum
mining from its past?
Case studies of two mineral commodities showing
significant supply uncertainty and what this means for the
electronics industry:
Tantalum
• Demand
• Current supply
• Potential new supply
• Conclusions
Thoughts on how the electronics industry may consider
uncertainty in tin & tantalum mine supply
Tin
• Demand
• Current supply
• Potential new supply
• Conclusions
Uncertainty in Tin & Tantalum Mining
What can we learn about the future
from the past? Section
1
The past is no indicator of the future?
?
0
10,000
20,000
30,000
40,000
50,000
60,000
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
Pri
ce
(2
01
2 U
S$
/t)
Tin Prices (US$2012):1973-2012
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
Pri
ce
(2
01
2 U
S$
/t)
Tantalum Prices (US$2012) – 1973-2012
?
The problem with forecasting!
"Scythia has an abundance of soothsayers who foretell the future. They are judged
by results and the losers are loaded on to oxcarts
which are set on fire.“ - Herodotus, 440BC
(NB: This is a paraphrasing by a former colleague at
CRU – John Tomlinson)
The problem with the future
“My interest is in the future because I am
going to spend the rest of my life there”
- Charles F. Kettering
(American engineer, inventor of the electric starter, 1876-1958)
Uncertainty in Tin & Tantalum Mining
Lessons from the past:
supply, demand and discovery Section
2
Finite world, finite mineral deposits
“Earth rise” from Apollo 11
Image: The Guardian/NASA
Old Geevor tin mine, Cornwall, UK, operated
late 18th century to 1990
Image: Shutterstock
Supply, demand & discovery
…Demand…
…and Discovery
Supply…
The history of civilisation to some extent is the history of finding,
exploiting and using mineral resources.
…in a globalised world
Uncertainty in Tin & Tantalum Mining
TANTALUM
Images: Shutterstock & Images of the Elements
Uncertainty in Tin & Tantalum Mining
Tantalum demand shock from
capacitor industry Section
3
Demand: consumer electronics
Source: Tantalum-Niobium International Study Centre (TIC)
Uncertainty in Tin & Tantalum Mining
Tantalum supply could not respond
to the demand shock Section
4
Tin slag decline, rise of Aussie mines
0
200
400
600
800
1000
1200
1400
1600
Annual mined tantalum production (tonnes)
OtherAfrica
CentralAfrica
Canada
Brazil
Australia
Source: Tantalum-Niobium International Study Centre (TIC) Source: United States Geological Survey (USGS)
Rise of Congo & “Conflict Minerals”
0
200
400
600
800
1000
1200
1400
1600
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Annual mined tantalum production (tonnes)
Other Africa
Central Africa
Canada
Brazil
Australia
Source: United States Geological Survey (USGS) Image: Shutterstock
Uncertainty in Tin & Tantalum Mining
Leading to a tantalum price spike
due conflict minerals legislation Section
5
Conflict legislation price spike
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
200
6
200
6
200
7
200
8
200
9
200
9
201
0
201
1
201
2
201
2
201
3
Metal Pages Tantalite basis 30% Ta2O5 (EU) $/lb Ta2O5
Closure of
Wodgina
mine
Passage of
Dodd-Frank
Act
Global Financial
Crisis
Source: Pete Souza (Whitehouse Photostream)
Post-spike demand
destruction?
Uncertainty in Tin & Tantalum Mining
Unclear where future tantalum
supply will come from Section
6
Lots of resources available?
35%
58%
3% 3% 1%
USGS Reserves Estimate (>150,000 tonnes)
Australia Brazil Canada
Ethiopia Other
41%
21%
10%
10% 9%
7% 2%
TIC Estimated "Likely Resources" (%)
South America Australia
Russia & Middle East China & SE Asia
Central Africa Other Africa
North America
But many uneconomic & inaccessible
but ACCESSIBLE
RESOURCES
DISCOVERED
ECONOMIC but
INACCESSIBLE
UNDISCOVERED
INACCESSIBLE but
ECONOMIC
DISCOVERED
ACCESSIBLE but
UNECONOMIC
UNDISCOVERED
UNECONOMIC but
ACCESSIBLE
GEOLOGICAL CERTAINTY
EC
ON
OM
IC F
EA
SIB
ILIT
Y
DISCOVERED
ACCESSIBLE
and ECONOMIC
(Behind)
DISCOVERED but
INACCESSIBLE
UNECONOMIC
UNDISCOVERED
INACCESSIBLE and
UNECONOMIC
UNDISCOVERED
but ACCESSIBLE
ECONOMIC
Source: Sykes & Trench (2014)
Congolese
resources?
Australian &
Canadian
resources? By-product
tantalum?
New
discoveries?
Uncertainty in Tin & Tantalum Mining
Conclusion: Future of the tantalum
industry is uncertain Section
7
Tantalum: A highly uncertain future
Tantalum is an opaque market, subject to price spikes
Tantalum received a demand surge from the electronics industry
Supply has struggled to react to this demand shock
Congolese conflict tantalum replaced Australian & Canadian supply
Conflict Minerals legislation has restricted Congolese tantalum supply
Much of tantalum resource inventory is uneconomic or ‘inaccessible’
Demand destruction will continue unless new supply developed:
• Conflict free Congolese tantalum, integrated with consumers?
• Resurgence of Australian & Canadian supply, with processing improvements?
• Price insensitive, low cost by-product niobium production?
• Other mine projects in North Africa, Russia, China?
• New ‘world class’ tantalum deposit discoveries?
Future of tantalum supply highly uncertain
Electronics industry should be aware of tantalum supply risk
Uncertainty in Tin & Tantalum Mining
TIN
Images: Shutterstock & Images of the Elements
Uncertainty in Tin & Tantalum Mining
Tin demand driven by electronic
solder industry & China Section
8
Tin solders not tin cans
2012: solder is ~50% of demand 1970s: tinplate is ~40% of demand
Source: ITRI Tin Industry Review 2014
China dominates solder demand
Tinplate: 54,600t (16%)
Chemicals: 53,300t (16%)
Brass/Bronze: 18,200t (5%)
Glass: 7,000t (2%)
Others: 35,200t (10%)
China: 98,500t (29% of tin &
58% of solder)
ROW: 72,800t (21% of tin &
42% of solder)
Solder: 171,300t (50%)
Tin Consumption (2012): 339,500 tonnes
Source: ITRI Tin Industry Review 2014
Due to lead to tin solder substitution
Data: ITRI & IPC
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Lead-free solder Lead solder
Lead-free solder as a % of global shipments
Conversion to tin
solder drove tin
prices
Uncertainty in Tin & Tantalum Mining
Mine supply problems: artisanal
Asia, conflict Congo, closing Peru Section
9
Weak supply now the price driver
250.0
275.0
300.0
325.0
350.0
375.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Tin Supply-Demand Growth (Kt)
Refined Supply Mine Supply Refined Demand
Source: ITRI Tin Industry Review 2014
Demand strength
driving prices
Supply weakness
driving prices
Alluvial and artisanal important
Images: Greenfields Research
Artisanal mining occurs in short cycles
Global tin production (Kt)
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
Other
Africa
CIS/USSR
Australia
Bolivia
Brazil
Peru
Thailand
Malaysia
Indonesia
China
Index of alluvial mining booms
0.0
100.0
200.0
300.0
400.0
500.0
600.0
Ye
ar
1
Ye
ar
3
Ye
ar
5
Ye
ar
7
Ye
ar
9
Ye
ar
11
Ye
ar
13
Ye
ar
15
Ye
ar
17
Ye
ar
19
Year
21
Year
23
Ye
ar
25
Ye
ar
27
Ye
ar
29
Malaysia 1958-1987 Thailand 1962-1991
Brazil 1977-2006 Indonesia 1992-20112
Indonesia 2012-2017???
?
?
?
Source: ITRI Tin Industry Review 2014
Major Peruvian mine due to close
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
20
18
Annual Production from San Rafael (Kt tin)
Due for
closure
Source: ITRI & Greenfields Research New Tin Supply 2014
Conflict tin from the Congo
https://www.itri
.co.uk/index.ph
p?option=com
_zoo&view=fro
ntpage&Itemid
=60
Data: ITRI/Greenfields Research
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Annual Production from Africa (Kt tin)
End of
Congolese
Civil War
Dodd-Frank
legislation
iTSCI
Scheme
Source: ITRI Tin Industry Review 2014
Uncertainty in Tin & Tantalum Mining
Where will future tin mine supply
come from? Section
10
Project pipeline struggling
0 10 20 30
Early exploration
Advanced exploration
Scoping
Pre-feasibility
Feasibility
Permitting
Financing
Construction
Commissioning
No. Projects
Tin projects at different stages
0
2
4
6
8
10
12
Tin Mine ProjectPipeline
Construction
Financing
Feasibility
Pre-feasibility,Permitting &Final Resource
Exploration &Scoping
Source: ITRI & Greenfields Research New Tin Supply 2014
Many projects technically challenged
0.01
0.02
0.03
0.06
0.13
0.25
0.50
1.00
2.00
4.00
8.00
100,000 1,000,000 10,000,000 100,000,000 1,000,000,000
Sn
Gra
de
(%
)
Ore (tonnes)
Grade-tonnage curves for tin mines & projects
Source: ITRI Tin Industry Review 2014; ITRI & Greenfields Research New Tin Supply 2014
NB: Size of bubble reflects relative amount of
contained tin in the resource (not all resources are
CRIRSCO compliant)
Mine Projects
Operating Mines
Increasingly reliant on by-products
Copper
Australia, China,
Germany,
Kazakhstan, Peru,
UK
Silver
Australia,
Canada,
China,
Kazakhstan,
USA
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,
Malaysia
Zirconium
Brazil
Potential Future World Tin Mine By-Products
Source: ITRI & Greenfields Research New Tin Supply 2014
mages: Shutterstock, www.csksg.com, www.tradekorea.com, www.cdves.com, American Elements, Wikipedia, www.made-in-china.com;
www.images-of-elements.com
Lithium
Czech Rep. Aggregates
Malaysia
Tailings technology challenge
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000Potential new tin tailings capacity (t/y)
Source: ITRI & Greenfields Research New Tin Supply 2014
Very few recent major tin discoveries
1955 1965 1975 1985 1995 2005 2015
Early
Exploration
Advanced
Exploration
Scoping
Pre-Feasibility
Feasibility
Permitting
Financing
Commissioning
Construction
Post-ITC
Discovery
Gap
Recent
Discovery
Gap
Discoveries
still under
development:
• Pre-1800: 4
• Pre-1900: 11
• Pre-1955: 15
Low Political Risk
Moderate Political Risk
Very High Political Risk
High Political Risk
Source: ITRI & Greenfields Research New Tin Supply 2014
NB: Size of bubble reflects relative amount of
contained tin in the resource (not all resources are
CRIRSCO compliant)
Many uneconomic & inaccessible?
but ACCESSIBLE
RESOURCES
DISCOVERED
ECONOMIC but
INACCESSIBLE
UNDISCOVERED
INACCESSIBLE but
ECONOMIC
DISCOVERED
ACCESSIBLE but
UNECONOMIC
UNDISCOVERED
UNECONOMIC but
ACCESSIBLE
GEOLOGICAL CERTAINTY
EC
ON
OM
IC F
EA
SIB
ILIT
Y
DISCOVERED
ACCESSIBLE
and ECONOMIC
(Behind)
DISCOVERED but
INACCESSIBLE
UNECONOMIC
UNDISCOVERED
INACCESSIBLE and
UNECONOMIC
UNDISCOVERED
but ACCESSIBLE
ECONOMIC
Source: Sykes & Trench (2014)
High country risk
resources?
Low grade
projects?
Tailings
projects?
By-product
projects?
New
discoveries?
Uncertainty in Tin & Tantalum Mining
Conclusion: Future of the tin
industry is uncertain Section
11
Tin: A highly uncertain future
Tin is a relatively small market, subject to volatility
Tin received a demand surge from the electronics industry
Supply has struggled to react to this demand shock
Indonesian alluvial and artisanal mine supply is depleting
The major San Rafael tin mine in Peru is ageing
Conflict Minerals legislation has restricted Congolese tin supply
Much of remaining tin resource inventory is uneconomic or ‘inaccessible’
Demand destruction may occur unless new supply developed:
• Conflict free Congolese tin, integrated with consumers?
• New hard rock supply in politically stable countries, e.g. Australia?
• Price insensitive, low cost by-product production?
• Development of tin tailings technology?
• New ‘world class’ tin deposit discoveries?
Future of tin supply highly uncertain
Electronics industry should be aware of potential tin supply risk
Uncertainty in Tin & Tantalum Mining
Dealing with uncertainty in tin &
tantalum mine supply Section
12
Scenarios, not predictions
Known
Known
Unknown
Unknown
Unknown
Known
Known
Unknown
Opening
new search
space
Rising costs
& falling
production
Non-conflict
minerals
By-product
mining
Current project
pipeline
Resurgence of
current supply
Higher Costs
Tim
efr
am
e
Current supply
Opening new
search space
Non-conflict
minerals
Current project
pipeline
By-product
mining
No change
Some potential scenarios…
No change scenario Current supply with rising costs & falling
production
Illegal conflict tin resurgent
Demand destruction & shrinking industry
Poor industry cannot invest in new
supply exacerbating problem
Marginal new supply scenario Current supply with rising costs & falling
production
Development of marginal, high risk, high
cost projects & by-product reliant costs
Gradual demand destruction slowly
corrodes industry
Poor industry cannot invest in new
supply exacerbating problem
Un-conflicted minerals scenario Current supply
Resurgent legal, transparent tin secured
from the Congo
Growing industry with low cost producers &
low prices
Little scope for new projects
Fresh discoveries scenario Current supply
Exploration focus leads to high quality,
world class tin discoveries.
Growing industry with low cost producers &
low prices
New
Su
pp
ly
Cu
rren
t S
up
ply
Shrinking industry Growing industry
THANK YOU
For more information:
ITRI Ltd: www.itri.co.uk
Greenfields Research: www.greenfieldsresearch.com
Centre for Exploration Targeting: www.cet.edu.au
Contact information:
Peter Kettle: [email protected]
John P. Sykes: [email protected]
Learn more about TIN
Two new reports available:
ITRI Tin Industry Review 2014
ITRI & Greenfields Research New Tin
Supply 2014
More information:
https://www.itri.co.uk/images/ITRI_Industr
y_Review_2014_Flyer__pics.pdf
Contact information:
Peter Kettle
John Sykes