Lecture 12 resources 3 Tin Flashcards
What are the main uses of Tin/industries?
- Construction
- Transport
- Consumer electronics
- Packaging
- Industrial equipment
Who produces the most tin
Dynamic - changed long term and between 2010 and 2017
China (largest)
Indonesia
Malasyia - shrunk over time
Bolivia (decreased over time
Peru (more significant contributions)
what caused higher production costs in certain mines in 1981
technique - underground mining increases costs.
smaller mines with high production costs are exposed to market fluctuations.
What is the geology of Tin?
From placer deposits, Natural concentrations of heavy minerals deposited by gravity during sedimentation.
> near shore marine environments, middle east
Dredging can recover deposits - shallow water systems where there is erosion granitic material and weathering of the systems into the riverine systems - deposition in the near-shore.
What is the market for tin?
London metal exchange
- market place between supply and demand of the industry.
- international tin council
Why is there a metal exchange and what are s*******s
The London metal exchange
- brings together producers and users.
- avoids dependence on a single supplier
Speculators
- use the LME to profit from accurate forecasting of fluctuations in metal prices.
- the ability to buy and sell the contracts which leads to speculation and LME ‘gambling house’
Whats the role of the international tin council?
to prevent a tin-glut
- prevent over production and maintain price
- started in 1931 - malaysia, nigeria, dutch east indies and Bolivia - agreeing on production cut backs to improve prices.
- dissolved in 1990
what is the new international tin agreement?
1956
- new forum for producers and consumers
- consumers concerned about strategic importance of metal and a stable price.
- deal with surplus production - set a floor and ceiling price for tin
- impose export controls and establish buffer stock - to keep prices between floor and celling.
What are cartels?
- a way of controlling the market
- however, brazil and Peru were not members - they were major producers so most of the market was not controlled by the ITC.
- smuggling is a problem - this tin is not controlled by the cartel - Thailand 18,000t pa smuggling.
1982 - neither US or Bolivia joined - USA is against it and
Bolivia - floor price was below their mining costs so unfeasible.
weakened position of the council.
Tin price collapse explained
October 1985 - Tin prices halved.
- but supply and demand were balanced so why did they collapse?
- ITC had buffer stock - when prices fell they bought more stock.
- when member nations of the ITC could not fund the tin purchase. The BSM (buffer stock manager) had to fund it by borrowing - using stockpile as collateral.
- floor price of tin was set to Malaysian Ringgits - tied to the US dollar, ITC buffer stock was in pounds sterling.
- when the US dollar became strong against the pound even though the price of tin wasn’t increasing the value of the ITC tin collateral rose.
Therefore
- Bolivia - thousands of miners jobs were lost
- Geevor mine in Cornwall closed.
What is the BRE-X scandal
March 1993
- small Canadian mining company BRE-X bought a site in Indonesia.
- claimed that there was more than 13 million ounces of gold in 1995.
- 1996 found evidence of 40 million ounces
- May 1996 - share price more than $200 dollars.
January 1997 - deal falls appart
Feb 16th - new deal - estimates to 71 million ounces.
March 19th - geologist dies
March 26th - doubts over the true amount of gold, negligible amounts of gold.
March 27th - try to sell of shares.
mining fraud.
