1. Structural changes in mine supply:
Case studies in tin and tantalum
John P. Sykes
Director, Greenfields Research & PhD Candidate, Centre for Exploration Targeting
(on behalf of ITRI)

2. Supply shortages in tin mine supply
Contents
 Case studies of two mineral commodities undergoing
structural change in the supply chain and what this
means for the electronics industry:
 Tantalum
• Demand
• Prices
• Current supply
• Potential new supply
• Conclusions
 A comparison of structural supply issues in tin and
tantalum
 Tin
• Demand
• Prices
• Current supply
• Potential new supply
• Conclusions

3. Structural changes in mine supply: Tantalum
Demand: Tantalum capacitors,
electronics & mobile phones
Section
1

4. Demand: consumer electronics
Source: Tantalum-Niobium International Study Centre (TIC)

5. Structural changes in mine supply: Tantalum
Price: Spike due conflict minerals
legislation
Section
2

6. Conflict legislation price spike
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
2006
2006
2007
2008
2009
2009
2010
2011
2012
2012
2013
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)

7. Tantalum has a history of price spikes
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
1940
1946
1952
1958
1964
1970
1976
1982
1988
1994
2000
2006
2012
USGS Tantalum Pentoxide (nominal)
USGS Tantalum Pentoxide (real)
 1950-60s – invention of tantalum
capacitor, adoption partly driven
by US space program
 1980 price spike to panic buying
by consumers, due to worries
about mine supply.
 2000 price spike a combination
of surging demand from mobile
phones and an opaque market,
partly fuelled by war in the
Congo.
 Current spike partly relates to
this “conflict minerals issue.
Sources: USGS, UN, TIC

8. Structural changes in mine supply: Tantalum
Past structural changes in supply:
tin slags, Australia & the Congo
Section
3

9. Tin slag decline, rise of Aussie mines
0
200
400
600
800
1000
1200
1400
1600
Annual mined tantalum
production (tonnes)
Other
Africa
Central
Africa
Canada
Brazil
Australia
Source: Tantalum-Niobium International Study Centre (TIC) Source: United States Geological Survey (USGS)

10. 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

11. Structural changes in mine supply: Tantalum
Where will future tantalum mine
supply come from?
Section
4

12. The future of tantalum mining?
35%
58%
3%
3% 1%
USGS Reserves
Estimate (t)
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

13. Structural changes in mine supply: Tantalum
Conclusions: A structural change
in tantalum supply is coming?
Section
5

14. Conclusions on tantalum supply
 Tantalum demand driven by growing electronics industry
 Opaque market, subject to spikes
 Past demand destruction and structural supply changes
 Recent structural change: Congolese conflict tin at the expense of
Australian & Canadian hard rock supply
 Dodd-Frank Conflict Minerals legislation has led to a de-facto embargo on
Congolese tantalum
 Is another structural supply change imminent?
• Conflict free Congolese tantalum, integrated with consumers?
• Resurgence of Australian & Canadian hard rock supply through globally
integrated companies?
• Price insensitive, low cost by-product niobium production?
• Other mine projects in North Africa, Russia China?
• Opening up of new exploration “search space”?
 The actions of the small number of actors in the industry will have a big
affect on which of these outcomes occurs.

15. Game theory and tantalum
 The few miners and few buyers in the tantalum
industry creates a “prisoners dilemma”.
Source: Scott Adams

16. Structural changes in mine supply: Tin
Demand: Tin solder not tin cans
Section
6

17. Demand: Tin solders not tin cans
2010: solder is +50% of demand 1970s: tinplate is ~40% of demand
Copyright: Greenfields Research & ITRI; Data: ITRI

18. China dominates solder demand
Tinplate: 54,200t (17%)
Chemicals: 42,600t
(13%)
Brass/Bronze: 18,300t
(6%)
Glass: 7,300t (2%)
Others: 26,600t (8%)
China: 94,400t
(30% of tin &
55% of solder)
ROW: 76,700t
(24% of tin &
45% of solder)
Solder:
171,100t (54%)
Tin Consumption (2009)
Copyright: Greenfields Research & ITRI; Data: ITRI

19. Structural changes in mine supply: Tin
Prices: 30-year highs on electronic
demand & stalling supply
Section
7

20. Tin prices are at 30-year highs
Long-term tin price history
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1900 1920 1940 1960 1980 2000
US$/tonne, inflation adjusted 2010 prices
0
10
20
30
40
50
60
0 to 5 5 to
10
10 to
15
15 to
20
20 to
25
25 to
30
30 to
35
35 to
40
Price range, $000/tonne, 2010 real terms
Number of years in each price band
Tin price histogram 1900-2011
Copyright: Greenfields Research & ITRI; Data: ITRI
Prices at 30 year highs
Recent prices
mainly is this
range

21. Lead to tin solder substitution
Copyright: Greenfields Research & ITRI; Data: 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

22. Weak supply driver of prices
Tin supply demand balance (Kt)
250.0
275.0
300.0
325.0
350.0
375.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Refined Supply Mine Supply Refined Demand
Tin supply demand growth (%)
-7.5%
-5.0%
-2.5%
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
Refined Demand Refined Supply Mine Supply
Copyright: Greenfields Research & ITRI; Data: ITRI
Demand strength
driving prices
Supply weakness
driving prices
Demand strength
driving prices
Supply weakness
driving prices

23. Structural changes in mine supply: Tin
Mine supply problems: artisanal
Asia, conflict Congo, closing Peru
Section
8

24. Alluvial and artisanal important
Copyright & Images:
Greenfields
Research

25. 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
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
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
Malaysia 1958-1987 Thailand 1962-1991
Brazil 1977-2006 Indonesia 1992-20112
Indonesia 2012-2017???
?
?
?
Copyright: Greenfields Research & ITRI; Data: ITRI

26. 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
Annual Production from
San Rafael (Kt tin)
Due for
closure

27. 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
18.0
Annual Production from Africa (Kt
tin)
End of
Congolese
Civil War
Dodd-Frank
legislation
iTSCI
Scheme

28. Structural changes in mine supply: Tin
Where will future tin mine supply
come from?
Section
9

29. Hard or soft rock: Grade is king!
Theoretical change in cost due to changes in ore grade for a
primary tin, alluvial mine in Indonesia, producing 7,500 tonnes of tin
per year, from a team of gravel pumps, with a 100% recovery.
Copyright: Greenfields Research & ITRI; Data: ITRI
0
5,000
10,000
15,000
20,000
25,000
1.0kg/m3 0.8kg/m3 0.6kg/m3 0.4kg/m3 0.2kg/m3
US$/tonne
Mining Other
2015, Theoretical Net of By-Product Cash Costs
Approximate grade of
S.E. Asian alluvial ores

30. Hard rock mining costs competitive
Copyright: Greenfields Research & ITRI; Data: ITRI
0
5,000
10,000
15,000
20,000
25,000
OP 2.0% UG 4.0% OP 1.5% UG 3.0% OP 1.0% UG 2.0% OP 0.5% UG 1.0%
US$/tonne
Mining Processing Other
2015, Theoretical Net of By-Product Cash Costs
Approximate grade of
new hard rock projects
Underground mine is a theoretical primary tin, underground mine in Australia,
producing 7,500 tonnes of tin per year, with a processing recovery of 75%.
Open pit mine is a theoretical primary tin, open pit mine in Australia, producing
7,500 tonnes of tin per year, with a processing recovery of 75%.

31. Hard or soft rock: Grade is king!
Copyright: Greenfields Research & ITRI; Data: ITRI
0%
20%
40%
60%
80%
100%
Alluvial Open Pit Underground
%breakdownofcost
inputs
Fuel Electricity Labour Other
2015, Theoretical Net of By-Product Cash Costs
Theoretical cost breakdown for a primary tin, open pit mine in Australia grading 0.5%,
producing 7,500 tonnes of tin per year, with a 75% recovery.
Theoretical cost breakdown for a primary tin, alluvial mine in Indonesia grading 0.2kg/m3, producing
7,500 tonnes of tin per year, from a team of gravel pumps, with a 100% recovery.
Theoretical cost breakdown for a primary tin, underground mine in Australia grading 1.0%,
producing 7,500 tonnes of tin per year, with a 75% recovery.
Vulnerable to fuel costs
Vulnerable to labour
costs

32. Asian countries dominate production
World Tin Mine Production (2012 est.)
Indonesia
(34.5%)
China
(34.5%)
Peru
(9.4%)
Bolivia (6.9%)
Brazil (3.8%)
Australia
(2.3%)
DR Congo
(2.6%)
Malaysia
(1.2%)
Vietnam (1.2%)
Nigeria (0.6%)
Portugal (<0.1%) Egypt (0.1%)
Rwanda
(1.4%)
Burundi (<0.1%)
Myanmar (0.7%)
Thailand (0.1%)
Laos (0.4%)
Mongolia
(<0.1%)
Russia
(0.2%)
Copyright: Greenfields Research & ITRI; Data: ITRI

33. Labour rates versus fuel prices?
0
10,000
20,000
30,000
40,000
50,000
60,000
2011, GNI Per Capita (US$)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2007-11 GNI Per Capita
CAGR (%)
Copyright: Greenfields Research & ITRI; Data: World Bank
Developed world
labour costs are
higher…
…but developing
world labour costs
are rising quickly

34. Developed nations a safer investment
Country Ranking (of 181)
Canada 4th
Australia 5th
- -
USA 10th
- -
Germany 20th
- -
UK 25th
- -
Spain 27th
Country Ranking (of 181)
Peru 56th
- -
China 71st
Brazil 72nd
- -
Indonesia 111th
- -
Bolivia 125th
- -
DR Congo 159th
Rankings based on Greenfields Research’s proprietary mining political risk ranking system. The ranking system correlates economic data sets
that cover most of the world’s countries (such as the Transparency International Corruption Index, the World Bank Doing Business dataset and
GDP/land area) with well known mining industry political risk surveys, including the Fraser Institute, Behre Dolbear and ResourceStocks, to get
a system which ranks all countries by their suitability for mining, not just those in the mining industry surveys.
Copyright: Greenfields Research & ITRI; Data: Greenfields Research

35. Exchange rates important
Copyright: Greenfields Research & ITRI; Data: ITRI
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
2006 2007 2008 2009 2010 2011
Exchange rates (to US dollar)
indexed to 2006
Indonesian Rupiah (IDR) Chinese Renminbi (CYN)
Bolivian Bolivano (BOB) Brazilian Real (BRL)
Australian Dollar (AUD)
Weaker
Stronger
Indonesian Rupiah affects
marginal costs in tin. A
stronger Rupiah means
higher long term tin prices

36. Asian mining in decline
World Tin Mine Production (2016 est.)
China
(26.2%)
Indonesia
(22.0%)
Australia
(8.5%)
Peru
(10.6%)
Bolivia
(7.5%)
Brazil (4.8%)
Malaysia (2.9%)
Vietnam (1.1%)
Laos (0.4%)
Thailand (>0.1%)
Myanmar
(3.1%)
Mongolia
(0.4%)
Russia (0.9%)
Kazakhstan
(1.8%)
Canada (0.1%)
UK (0.1%)
Germany
(1.2%)
Spain
(0.3%)
Portugal (<0.1%) Egypt
(0.7%)
Morocco
(2.1%)
Nigeria (0.5%)
DR Congo (3.0%)
South Africa (0.5%)
Rwanda (1.2%)
Burundi (<0.1%)
Copyright: Greenfields Research & ITRI; Data: ITRI

37. Tin mining dependent on by-products
Copper
Australia & China
Silver
China
Lead
China
Zinc
Bolivia, China
Antimony
China
Indium
China
Gallium
China
Tungsten
Egypt, Mongolia,
Myanmar
Tantalum
Burundi, Congo,
Rwanda
Niobium
Brazil, Burundi,
Nigeria
World Tin Mine By-Products (2012 est.)
Copyright: Greenfields Research & ITRI; Data: ITRI; Images: Shutterstock, www.csksg.com, www.tradekorea.com, www.cdves.com, American
Elements, Wikipedia

38. Uneconomic without by-products
Copyright: Greenfields Research & ITRI; Data: ITRI
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2016 estimates of revenue shares for tin producing
mines and mine projects
Tin Aggregates Copper Iron Ore Mineral Sands Niobium Silver Tantalum Tungsten Lead/Zinc

39. More dependent 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
World Tin Mine By-Products (2017 est.)
Copyright: Greenfields Research & ITRI; Data: ITRI; Images: 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

40. Small, private and state companies
~25,500t, 9.4%,
Private/Public, Peru
~30,000t, 11.1%,
State/Public, Indonesia
~27,000t, 10.0%,
State/Public, China
~9,200t, 3.4%,
State, Bolivia
~10,500t, 3.9%,
Private, China
~3,000t, 1.1%, Public,
Australia
~3,500t, 1.3%, Public,
Malaysia/Indonesia
~3,500t, 1.3%, State,
Vietnam
~2,500t, 0.9%, Private,
China
~2,000t, 0.7%, Co-op,
Brazil
Images: Company websites, ITRI, Wikipedia
Data: ITRI (2012, mined production estimates – total 271,300 tonnes)

41. Substantial investment required
Company Project Capex
(US$M)
Capacity
(t/y Sn)
Capex
(US$/t/y)
Source
Consolidated Tin Mines Mt Garnet 124.0 3,050 40,700 Scoping 2010
Kasbah Resources Achmmach 166.8 6,900 24,300 Pre-Feasibility 2012
Metals X Rentails 173.2 5,300 32,700 Feasibility 2009
Stellar Resources Heemskirk 114.0 4,330 26,300 PFS 2013
Venture Minerals Mount Lindsay 198.0 2,750 39,100 PFS 2011
Total & average 776.0 22,330 34,750
 Total new mine supply required 2013-17: 70,000t/y
 Average capital cost per tonne new capacity: $34,750
 Total investment required in new supply: $2.4 billion
* Mount Lindsay is a tin-tungsten-magnetite project. The tungsten plant in particular greatly adds to capital costs.Copyright: Greenfields Research & ITRI; Data: ITRI

42. But most a long way off
0
2
4
6
8
10
12
Median intervals
from surveyed
projects
Years
Start-up
Construction
Financing
Feasibility
Final
Resource
Pre-
Feasibility
0 10 20 30
Early exploration
Advanced exploration
Scoping
Pre-feasibility
Feasibility
Permitting
Financing
Construction
Commissioning
No. Projects
Tin projects at different
stages

43. Structural changes in mine supply: Tin
Conclusions: A structural change
in tin supply is also coming?
Section
10

44. Conclusions on tin mine supply
 Tin demand driven by growing electronics industry
 Market is currently supply driven, with falling production from key regions
 Tin industry has a history of alluvial mining “booms & busts”
 Dodd-Frank Conflict Minerals legislation has also led to a de-facto
embargo on Congolese tin
 The major San Rafael mine in Peru is due for closure
 Is another structural supply change imminent?
• Resurgence of Australian & European hard rock supply?
• Conflict free Congolese tin, integrated with consumers?
• More complex by-product related industry?
• New production from opaque, but known tin regions (Myanmar, Brazil, China)?
• Opening up of new exploration “search space”?
 The large number of unknowns in this industry mean it is difficult to
predict exactly which future will prevail.

45. Spotting black swans
Tailings
mining?
Conflict tin?
Myanmar
democracy?
San Rafael
closure?
New Brazilian
supply?
Tin in
Colombia?
Bolivian
expansion
slows
New
Russian
supply?
China?
SE Asia
revival?
New African
supply?
New
European
supply?
Australian
slowdown?
Images: Shutterstock/Minsur

46. Structural changes in mine supply: Tin & Tantalum
Conclusions: A structural change
in tin supply is also coming?
Section
11

47. Comparing tin and tantalum
 Tin and tantalum demand driven by growing electronics industry
 Tin and tantalum industries have histories of “booms & busts” relating to
major supply and demand changes
 Both industries seem to be on the verge of a structural supply change
 Dodd-Frank Conflict Minerals legislation has also led to a de-facto
embargo on Congolese tantalum – also an issue in tin
 Costs and formalisation of alluvial and artisanal an issue in both industries
 Structural supply changes could come from:
• Resurgence of Australian & European hard rock supply?
• Conflict free Congolese minerals, integrated with consumers?
• More complex by-product related industries?
• New production from opaque, but known regions (Myanmar, Brazil, China, CIS)?
• Opening up of new exploration “search space”?
 Or will the supply side continue on as it is currently?
 Both industries seem very difficult to predict

48. Preparation via scenario analysis
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
Timeframe
Current supply
Opening new
search space
Non-conflict
minerals
Current project
pipeline
By-product
mining
No change

49. Contact Details:
 John P. Sykes
 Director, Greenfields Research
 john.sykes@greenfieldsresearch.com
 www.greenfieldsresearch.com
 PhD Candidate / Adjunct Research Fellow
 Centre for Exploration Targeting
 www.cet.edu.au
Today’s reference:
 ITRI New Tin Mine Supply – Out Soon!
 Peter Kettle
 Manager, Statistics & Market Studies
 peter.kettle@itri.co.uk
 www.itri.co.uk