Lessons from Shanghai: China’s booming demand for lead-acid batteries good news for the tin industry

Last month Stellar Resources presented at the 2015 International Tin Forum in Shanghai, one of the biggest industry events of the year.

During the Forum there were many interesting and uplifting presentations from tin professionals and experts, including Tianneng Power, one of the two leading Chinese motive battery producers.

In a detailed presentation, Tianneng Power forecast that China’s lead-acid battery industry – which uses tin to reduce corrosion and increase battery life – will rapidly grow over the next few years. The lead-acid battery is the oldest and one of the most trustworthy types of rechargeable battery, and its large power-to-weight ratio and low cost makes it an attractive prospect for use in electric vehicles – an industry which is booming in the Far East.

Tianneng revealed that battery production in China has risen by 55% in the last three years, attributing this surge to the country’s demand for clean power and travel. Ownership of e-bikes for example, which use lead-acid batteries, has now reached a huge 190 million in China; with 30 million being sold last year alone. The ownership of four-wheeled electric vehicles, also powered by lead-acid batteries, has increased as well: doubling to 400,000 in the last two years.

It’s not just clean vehicles that the Chinese are seeking either – but clean energy as well.

In its presentation Tianneng explained how lead-acid industrial batteries are used to store solar and wind-generated power. As the demand for renewable energy is increasing in China, so is the use and production of tin and the lead-acid industrial battery.

Concluding its presentation, Tianneng predicted that the use of tin in the lead-acid battery industry could increase from almost 12,000 tonnes in 2014 to 17,600 in 2018. This is exciting and positive news for Australian tin explorers and developers such as Stellar Resources, with a premium location giving easy-access to the Chinese market.

Source: Tianneng Power presentation, 2015 ITRI International Tin Forum
Source: Tianneng Power presentation, 2015 ITRI International Tin Forum

Stellar in Shanghai for ITRI International Tin Forum

Last month Stellar Resources attended the 2015 ITRI International Tin Forum in Shanghai, billed as the tin world’s main event of the year.

A record 300+ delegates were in attendance with Stellar at the event between 18 – 20 May, including tin miners, smelters, traders, fabricators and consumers from around the world. The Forum offered international attendees a window into the world’s largest tin market, while providing the Chinese industry with a clear view of trends in global supply, demand and prices.

During the Forum Stellar Resources gave a strong presentation informing attendees about its Heemskirk Tin Project, which is the highest grade undeveloped tin project listed on the ASX. Managing Director Peter Blight enthusiastically explained how Stellar’s project is in a premier position in Australia’s most productive tin field, and how they are poised to embark on a DFS for the Heemskirk project this year with PFS optimisation currently well underway.

ITRI also gave a formal presentation on the main day of the Forum which covered a number of the year’s principal issues, such as imports of ore and concentrates from Myanmar, technology changes in the electronics solders business and rapid growth in newer applications like lead-acid batteries.

The Forum’s key topic of interest was the unexpected increase in the 2014 tin mine production and its subsequent role in the fall in the price of tin, particularly in the second half of the year. While production increases were widespread the single biggest impact came from artisanal production in NE Myanmar.

According to the latest statistics, this production may have peaked in January of this year, however ITRI reported a continued, yet modest, increase of 5,000t year on year in 2015. Discussions at the event suggest that despite this, as high cost producers react to weak tin prices, the resultant cuts in refined production elsewhere should more than offset higher production from Myanmar.

Additional presentations at the Forum showed that demand in the tin market is looking stronger than expected, with above trend growth forecast for 2015 after a strong recovery in 2014. This is good news for developers and explorers such as Stellar Resources, who left the Forum with renewed confidence.

To view the presentation Stellar gave at the 2015 ITRI International Tin Forum, please click here.

Stellar project lights up tin market

The May edition of Paydirt reports that despite the challenges tin producers and explorers are facing in the market, many remain bullish the sector will bounce back ‘with history suggesting a tin price recovery is on the cards’.

One explorer and developer ‘prepared for the fight’ is Stellar Resources, who article author, Mark Andrews, describes as a ‘potential rising star in the game’.

Earlier this year Stellar conducted a metallurgical optimisation study at its Heemskirk Tin project in Tasmania, which revealed better tin recoveries (up 7.4% to 79.5%) from the Severn deposit were possible, while average recoveries across all deposits improved by 4.5% to 72.8%. An increase in recoveries has also boosted production potential to 4,520t, resulting in a PFS valuation for the Heemskirk Tin Project of $160 million.

Commenting on Stellar’s credentials as Australia’s best emerging tin producer, Managing Director Peter Blight said, “There is growing interest within the tin industry itself as to where the next sustainable production is going to come from. What the industry is looking for is investible projects and I think we stack up pretty well on the list.”

The article also reports on the big focus for Stellar this year; starting a DFS at Heemskirk, with Andrews suggesting “further metallurgical improvements and resulting cost optimisations will no doubt help Stellar’s pursuit for cash”, with the company looking to secure $10 million.

The Australian: Time to bang the tin drum in a tight market

In his weekend criterion column for The Australian, Tim Boreham reports that the long-awaited reduction in Indonesian tin production is a “blessed relief” for developers such as Stellar Resources.

Indonesian tin accounts for 25% of the market and there were suggestions that Indonesian producers have been mulling the decision to cut output for some months.

Last week, in a move that saw a 7% rise in the price of the “handy industrial metal”; Refined Bangka Tin, the world’s biggest tin producer, announced that it would cease production infinitely – good news for Australian tin exploration and development company Stellar Resources.

As part of his reporting Boreham goes on to reference Stellar’s 100% ownership of the Tasmanian Heemskirk project, and the assertion that it is “the highest grade undeveloped tin resource on the local bourse.”

Throughout the article Boreham’s view of the tin market was a positive one, a perspective Peter Blight, Stellar Resources Managing Director, is very much in agreement with; adding that it is “in much better shape than the price suggests.”

The full article, including comments from Stellar Resources, can be found at: http://www.theaustralian.com.au/business/opinion/tin-miners-worth-a-look-in-a-tight-market/story-e6frg9lo-1227319357831

World’s Biggest Tin Exporter Cuts Output

The largest tin producer in Indonesia, which is the world’s top exporter, is cutting output by as much as 50 per cent. PT Timah will produce 1,500 metric tons to 2,000 tons of refined tin a month starting in April, below this year’s target of 2,000 tons to 3,000 tons.

In a report for Bloomberg, Yoga Rusmana and Dwi Sadmoko write that tin is “used in everything from cans to smartphones”, but PT Timah is seeking to stem the decline in price of the metal by restricting output while the Indonesian government tightens export and trading rules to limit shipments.

As producers cut back, the price of tin is expected to rise, which is good news for developers and explorers such as Stellar Resources. With further disruptions and restrictions to the Indonesian tin market, developers and explorers in stable countries such as Australia could receive more good news as buyers hunt for long-term stable supplies of tin.

To read the full article please visit: http://www.bloomberg.com/news/articles/2015-04-22/world-s-biggest-tin-exporter-cuts-output-after-price-rout

Tin Price Jumps most in Three Years

Yesterday (Monday 20 April 2015) the price of tin surged by 6.7%, the most it had in three years, as signs of declining supplies spurred buying.

In an article for Bloomberg, Agnieszka de Sousa and Debarati Roy report that stockpiles tracked by the London Metal Exchange fell to the lowest since October, and Indonesia’s largest private smelter, Refined Bangka Tin, will halt production this week. The journalists argue that these factors helped the price of tin climb 6.7% to settle at $15,525 a metric ton, the biggest jump since January 2012.

The rising price of tin will be beneficial to developers and explorers such as Stellar Resources, especially as buyers may decide to stay away from unstable markets such as Indonesia and instead look for long-term stable supplies of tin in Australia.

To read more about this story featured on Bloomberg, click on the link below:

http://www.bloomberg.com/news/articles/2015-04-21/tin-jumps-the-most-in-two-years-as-indonesia-plans-output-cuts

Stellar results from Severn Metallurgical Optimisation program

Stellar Resources is pleased to announce that it has received results of the Severn Metallurgical Optimisation program from WorleyParsons for its Heemskirk Tin Project in Tasmania.

The results are extremely positive for Stellar Resources, which owns 100% of the project, and adds tangible value to the development economics. Key findings from the study, as reported by the ASX on Tuesday 24 March, include:

  • An increase in tin recovery from 72.4%, established in the PFS, to 79.5%
  • Average tin recovery across all deposits has increased by 4.5% to 72.8%
  • PFS valuation has increased by 34.2% to A$82.3m

Shortly after the results were published, Peter Blight, Managing Director of Stellar Resources, said that this was a “significant milestone for the Heemskirk project” for two reasons:

“First, these results have demonstrated a step up in recovery for Severn, the major deposit, and promises improvements for the other deposits which to date have not been tested to the same degree.

“Second, the study has found robust data for optimising design criteria and processing conditions ahead of a definitive feasibility study to commence in 2015. It’s an exciting time for Stellar Resources.

“The Severn results have also been measured against the neighbouring Renison Bell (Metals X) tin processing plant when it was in its prime, and stack-up extremely well – an outcome that reinforces our view that there is much more upside to be harnessed at Heemskirk.”

Proactive Investors Australia has also reported how this result is a significant milestone for Stellar Resources. Its recent article informs readers that key advances made by Stellar in the process circuit include elimination of heavy media separation; increase in primary grind size; and optimisation of the sulphide float circuit, which reduces tin losses to the sulphide float tail from 10.1% to 2.6%.

To read the full ASX announcement, please visit: http://stellar.synotivewebdesign.com/wp-content/uploads/2015/03/150002SRL.pdf

To read the full Proactive Investors Australia article, please visit: http://www.proactiveinvestors.com.au/companies/news/61401/stellar-resources-upgrades-severn-tin-deposit-in-tasmania-61401.html

Herald Sun: Smart Money is on Tin Mining, and Stellar has a better than even chance of making the jump to production

In his daily ‘In The Black’ column for the Herald Sun, John Beveridge argues that mining might not be the “flavour of the month” with investors, but within mining “lie some pockets of great interest”.

Beveridge reports that tin is attracting smart money, with the prospect of lower production out of Indonesia and greater use in solar panels, lithium ion batteries and to replace lead in solder. He writes: “Junior explorer Stellar Resources is highly leveraged to any improvement in the tin price with its high grade Heemskirk tin project in Tasmania showing potential to start production in a higher tin price environment by late 2017 or early 2018.”

To read the full article, including comment from Stellar Resources Managing Director Peter Blight, please visit: http://www.heraldsun.com.au/business/in-the-black/invion-aims-to-silence-dreaded-smokers-cough/story-fni0d787-1227275541411

Shortage of supply will strengthen tin price in coming years

At the recent Prospectors and Developers Association of Canada conference, corporate advisory firm Hallagarten & Co’s principal and mining strategist, Chris Eccleson, spoke of how tin’s muted performance in 2014 obscured the potential for price rises and robust margins in the coming years. Eccleson revealed that most commentators and market participants believed that current prices represented a trough, and concluded that “overall, we have things set up for a pretty bullish-looking scenario in tin for the next few years.”

Discussing the global tin market, Eccleson noted how Indonesia, Malaysia and China were currently closed markets, and Bolivia and Burma were attached with high political risks. He said that there had been some interest in the old Australian regions, which is positive news for developers and explorers such as Stellar Resources.

To read more about this story featured in Mining Weekly, click on the link below:

www.miningweekly.com/article/shortage-of-supply-will-stoke-tin-price-higher-in-coming-years-2015-03-09