Malaysian Chamber of Mines Executive Director Muhammad Nor Muhammad.
KUALA LUMPUR: Casts as a sunset industry in Malaysia, the yet still strong appetite for tin amid a shortage in global supply, spells a bright outlook for the metal in the near term.
According to the Malaysian Chamber of Mines executive director, Muhamad Nor Muhamad, global tin consumption stands at around 362,000 tonnes annually while production remains at some 340,000 tonnes per year..
“As no new major tin mines are likely to be opened in the near future, this shortage of supply will persist for quite some time. Hence, the price of tin will continue to remain strong going forward,” he told Bernama.
As of today, tin price stands at US$19,720 a tonne on the Kuala Lumpur Tin Market (KLTM) while that of the London Metal Exchange (LME), the global trendsetter for the metal’s price, saw overnight trading at US$19,845 per tonne.
After the crash of 1985 which saw the tin price falling by more than 50%, the global demand for tin has been growing steadily from an annual average of 218,600 tonnes in the 1980s to 239,600 tonnes in 1990s and 314,500 tonnes in the 2000s.
The metal’s price plunged from US$17,000 per tonne in June 1985 to a 10-year low of US$5,780 in March 1986.
Global tin supply has also increased in tandem with demand, from an annual average of 224,800 tonnes in the 1980s to 233,400 tonnes in the 1990s and 309,000 in the 2000s.
As of 2015, Muhamad Nor said China continued to be the world’s largest tin producer, with an annual output of 146,600 tonnes, followed by Indonesia (68,400 tonnes), Brazil (25,500 tonnes), Bolivia (20,135 tonnes), Peru (19,511 tonnes) and Australia (7,158 tonnes).
At the same time, the world’s largest tin producer is also the biggest user of the commodity, consuming 175,842 tonnes annually, followed by the United States (31,354 tonnes), Japan (26,762 tonnes), Germany (17,931 tonnes), South Korea (13,091 tonnes) and India (8,657 tonnes).
As for Malaysia, he said the tin industry played an important role to the economy, contributing some RM250mil to the country’s gross domestic product (GDP), besides providing a significant number of employment to locals, both directly and indirectly.
He said the country produced 4,180 tonnes of tin concentrates last year from the total of 35 tin mines operating throughout the nation, namely in the states of Perak, Johor, Pahang, Terengganu and Kedah.
In comparison to the scenario of 1979, at a time when tin industry was still a major contributor to the Malaysian economy, the amount of tin concentrates produced then at 63,000 tonnes accounted for 31% of world’s output with the industry employing more than 41,000 people.
After the closure of Escoy Smelting Sdn Bhd in 1998, Malaysia Smelting Corp
Bhd (MSC) was Malaysia’s sole integrated tin producer and operator of the country’s sole tin smelter located in Butterworth.
Overseas, MSC also owns 99% of PT SRM Indonesia, 35% of China’s Guilin Hinwei Company Ltd and 40% of Africa Smelting Corp SPRL in Congo.
Explaining the logistics, Muhamad Nor said tin metal were stored in warehouses located in Butterworth, Penang; Port Klang, Selangor; and Pasir Gudang in Johor.
“We don’t have the inventory figure for tin in Malaysia. However, the level of tin stocks that are kept at the London Metal Exchange warehouses throughout the world currently totals some 4,100 tonnes,” he said.
Despite the low tin concentrates production, he said the country was able to produce some 26,849 tonnes of tin metal at MSC’s tin smelter last year.
This, he pointed out, was largely the result of tin concentrates being sourced from overseas while domestic consumption totalled 2,238 tonnes.
Last year, Malaysia imported 25,901 tonnes of tin concentrates for smelting into tin metal from several countries such as Indonesia, Australia, China, Bolivia, Brazil and Africa.
He said that MSC was the world’s second largest tin smelter after China’s Yunnan Tin Group Company Ltd which produced 76,000 tonnes of tin metal annually.
Other major producers were Indonesia’s PT Timah which has an annual output of 23,756 tonnes, China’s Yunnan Chengfeng Nonferrous Metals Co Ltd (20,100 tonnes) and Peruvian miner Minsur SA (19,583 tonnes).
However, Muhamad Nor said Malaysia’s tin industry continued to face challenges especially relating to mining activities.
“The main challenges faced by the tin mining industry in Malaysia today are the lack of available land for mining, the short period of mining lease, as well as the small area of mining tenement granted by the state authorities,” he added.
Meanwhile, the chamber, whose role is to protect and advance the general interest of the mineral community, was incorporated on Dec 10, 1914, under the Federated Malay States Chamber of Mines Incorporated Enactment No.25 of 1914, which is now known as the Malaysian Chamber of Mines Incorporation Act 1914.
It is the only chamber in the country to have been established via an Act of Parliament.
Its other roles include to collect and distribute mineral information, promote, support or oppose any legislative or other measures affecting the mineral industry and exchange information on mineral matters with other mineral associations, both locally and abroad.
To-date, the chamber has 170 members consisting of major mining management groups, mining companies, mining/mineral associations, consultants, engineers and individuals.
The Chamber is also associated with other tin organisations such as the Tin Industry (Research and Development) Board, the Malaysian Tin Products Manufacturers’ Association and the local tin trading operator, KLTM. - Bernama
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