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Avalon banks on new ‘blood metals’ rule for Canada’s tin mine success

Posted by AGORACOM-JC at 11:34 AM on Tuesday, June 30th, 2015

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  • Proceeding with a $1.3 million work program in South-western Nova Scotia to reopen a historic tin-indium mine.
  • Working on completing a Preliminary Economic Assessment for the project by November this year, is betting on recently approved legislation in Europe, which bans all products containing conflict minerals from war zones in Africa.

Canada’s Avalon Rare Metals (TSX:AVL), until now mostly known for its incursion in the rare earths market, is proceeding with a $1.3 million work program in South-western Nova Scotia to reopen a historic tin-indium mine.

The company, working on completing a Preliminary Economic Assessment (“PEA”) for the project by November this year, is betting on recently approved legislation in Europe, which bans all products containing conflict minerals from war zones in Africa.

Speaking at the 128th Annual Meeting of The Nova Scotia Mining Society late in June, Avalon’s President and CEO Don Bubar said the European Union anti “blood metals” rules, together with the U.S. Dodd-Frank Act, which forces US stock exchange-listed companies to disclose the use of minerals from a conflict zone in their supply chains, gives Avalon’s tin project huge advantages.

The miner was granted a special exploration licence to search 22 claims totalling 356.12 hectares. It also received a $40,000 project grant from the province earlier this year to assist with test drilling.

“We’re hopeful, at this point,” Natural Resources Minister Zach Churchill told MINING.com in an interview mid-June, adding that since market prices for tin have improved, the Nova Scotia government is optimistic about the prospects at the location.

“Any activity on that site is encouraging, but we need to wait and see what the results of the ongoing exploration drilling are before we rise our hopes too much,” Churchill said. He also noted there would have to be an environmental assessment done before any work can resume at the site.

Victim of falling prices

Avalon banks on new ‘blood metals’ rule for Canada’s tin mine success

Avalon’s President and CEO, Don Bubar, in March 2014. (Image courtesy of Avalon)

The Rio Algom tin mine in East Kemptville operated in the area from the mid-1980s to 1992, employing 200 people from Yarmouth and Shelburne counties. At the time, it was North America’s only open-pit tin mine, but it had to close after prices for the metal dropped to levels reaching well below US$3 per pound.

And while the metal used in electronics and packaging is now trading at more than double that price, it is down 23% so far this year, which makes it the worst-performing industrial metal on the London Metal Exchange.

No wonder analysts are not optimistic about the short-term outlook for it. Steve Hardcastle, head of client services for industrial commodities at Sucden Financial Ltd. in London, is one of them. He told Bloomberg last week that tin prices were set for the biggest first-half decline in 25 years because of abundant supplies and weak demand.

“The long-term future for tin is not brilliant, and it’s been reflected in the price,” Hardcastle said. “The big unknown 18 months ago was Myanmar, which is now filling the gap.”

In addition to East Kemtpville, Avalon Rare Metals has projects underway in Separation Rapids near Kenora, Ontario and Nechalacho, Thor Lake, in the North West Territories.

Source: http://www.mining.com/avalon-banks-on-new-blood-metals-rule-for-canadas-tin-mine-success/

Tin price bulls coming out of hibernation

Posted by AGORACOM-JC at 11:29 AM on Tuesday, June 30th, 2015

 

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  • Shrinking tin stocks, dwindling supplies from Myanmar and new Indonesian rules to curb exports are at last creating conditions for bulls who for some time have expected to see higher prices. 

A labourer takes down tin boxes inside a tin container recycling factory in a slum area in Mumbai January 12, 2015. REUTERS/Danish Siddiqui

A labourer takes down tin boxes inside a tin container recycling factory in a slum area in Mumbai January 12, 2015.
Reuters/Danish Siddiqui

LONDON Shrinking tin stocks, dwindling supplies from Myanmar and new Indonesian rules to curb exports are at last creating conditions for bulls who for some time have expected to see higher prices.

But the optimism is tinged with caution as much depends on whether top exporter Indonesia can limit its shipments abroad, something it has failed to do in recent months.

That’s one reason why benchmark tin prices on the London Metal Exchange (LME), at around $15,000 a tonne, are down about 25 percent since early January this year.

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Stocks of tin at 6,810 tonnes in LME-approved warehouses are about half the levels seen in December, the lowest in more than six years and only a fraction of global consumption estimated at 350,000 tonnes this year.

“There is a clear trend toward a depletion of stocks,” said Nicholas Snowdon, metals analyst at Standard Chartered.

“Indonesian exports will be increasingly constrained in the second half of the year. Chinese refined production has become more constrained with less Myanmar concentrate and altogether that points to a tightening trend in the market.”

Stronger growth in top consumer China in the second half of this year and the feed-through into demand for semiconductors and tin are also expected to be a plus for prices.

Solder used in electronics is the most important consumer of tin, accounting for about half of global use of the metal.

To halt illegal exports, Indonesian producers from Aug. 1 will need to prove that their tin comes from government-certified mines before it can be shipped.

One factor that has weighed on global prices is a surprising surge in supply as China’s imports of tin ore from Myanmar spiked, with shipments up over 80 percent so far this year.

But May imports at 21,456 tonnes are down 35 percent from April, which suggests the peak may already have been seen. Additionally, the concentrate from Myanmar is said to contain little tin.

“Some of it can be as low as 10 percent, most internationally traded concentrate has 55 to 75 percent tin,” said Peter Kettle, manager of markets at industry group ITRI.

“To some extent, people (in Indonesia) are exporting while they can … volumes will probably fall after August 1 when there will be more scrutiny of export licenses.”

However, there are doubts the new rules will be applied rigorously, and if they are, traders expect metal to be smuggled out of the country.

The country’s tin smelters in March agreed to limit monthly exports at 4,500 tonnes, which was subsequently lowered to 4,000 tonnes. But exports in April, May and June exceeded that number.

“The market needs to see exports much lower before it believes the curbs will work,” said Stephen Briggs, metals analyst at BNP Paribas. “The bullish side is low stocks.”

(Editing by Veronica Brown and Dale Hudson)

Source: http://www.reuters.com/article/2015/06/29/us-tin-supply-prices-idUSKCN0P902C20150629