Rekindled interest in tin

IT has been a major struggle for tin to regain its ground after experiencing a sharp fall in prices in mid-1980s which was intensified by the collapse of the International Tin Agreement due to the International Tin Council debt crisis.

After more than two decades, tin is making a strong comeback in terms of pricing as well as in the new applications especially with the growing lead-free awareness campaign among world food packaging companies.

The commodity is also experiencing a tight supply situation given the availability of very few new tin mines globally. As of October last year, the world commercial refined tin stockpile has dropped to 32,266 tonnes from 47,561 tonnes in 2009.

Major price catalyst for tin this year is expected to come from continued strong demand from the automotive and construction sectors in China and India.

Muhammad Nor Muhammad says there will be major changes in the domestic tin industry this year.

At current record price of US$29,200 per tonne compared with US$4,338 to US$4,483 per tonne in 2001, tin has captured the interest of many Malaysians and foreign mining companies.

Malaysian Chamber of Minesexecutive director Muhammad Nor Muhammad tells StarBizWeekthere will be major changes in the domestic tin industry this year as the Perak state government has issued exploration licences, prospecting permits, tin mining leases and renewals.

“This is a positive move and we hope other mineral-rich states like Selangor, Pahang as well as Sabah and Sarawak will undertake similar moves.”

While the famous Kinta Valley in Perak may no longer have plenty of tin deposits left, new areas are being explored like Pengkalan Ulu in Grik for the mineral.

Ho Wah Genting Bhd, via its subsidiary HWG Mining Sdn Bhd, is expected to commence its tin ore mining in Pengkalan Ulu after the Chinese New Year next month, says Muhammad. The company is expected to produce some 2,000 tonnes of tin ore a year.

However, MSC-owned Rahman Hydraulic Tin Sdn Bhd which secured its tin mining concession in Grik from the Perak state government in 2007 for 10 years, will be still be the largest tin producer in the country with a capacity of over 2,000 tonnes annually - two-thirds of the country's production.

“It would be good if the Selangor state were to consider reopening tin mining areas in Dengkil and Batang Berjuntai,” Muhammad says.

The major users of tin include those in solder, tinplate and pewter sectors.

According to the Department of Minerals and Geoscience, Malaysia has 31 tin mines in operation producing a total of 2,410 tonnes as at end-2009. Apart from tin mining, Muhammad Nor says that there are plenty of mining opportunities in Pahang, Malacca and Negri Sembilan which have pockets of iron ore deposits.

William Teo is aiming for a compounded annual growth of 20% from the tin ore mining division for the next three years.

While Sabah and Sarawak may not have tin deposits, the states are believed to be rich in copper, gold and coal. Ho Wah Gentingmanaging director William Teo says he is aiming for a compounded annual growth of 20% from the company's tin ore mining division for the next three years.

Its subsidiary HWG Tin Mining was awarded with a 10-year mining lease in 2008 to mine tin and other minerals on 202ha.

According to Teo, the group's revenue, which is mainly from its wire and cable business, will soon be derived from tin ore mining in financial year ending Dec 31, 2011.

The company expects a higher profit margin from tin ore mining as the cost to extract one tonne of tin ore was about US$7,000 compared with the current tin price of about US$29,000 a tonne.