Tin is an important commodity with multiple uses in modern society that go beyond widely held associations with goods such as tin cans, cups and roofs. These outmoded beliefs are a misnomer when considering the growing importance of tin in contemporary electronics and other high-tech industries, with latest research indicating that tin can dramatically improve the performance of lithium-ion batteries, for example. Tin continues to be one of the better performing commodities on the London Metals Exchange and the global tin market is anticipated to be valued at US$8.23 billion by 2023. However, the market has been rooted in a deficit for the last five years with demand rising from industrial markets and production falling as a result of depleting global reserves and tightening regulations in China – a world leading tin producer.
This equilibrium pricing scenario in the tin sector is creating a ‘perfect storm’ for a company like AfriTin Mining, according to its CEO Anthony Viljoen. AfriTin is a London-listed miner which intends to become the ‘African tin champion’ through the development of its portfolio in Namibia and South Africa.
“Demand and supply are moving away from each other quite rapidly and we saw a similar scenario developing in the vanadium market recently which resulted in prices going up by 1000%. We are excited by that and believe that what we call minor metals offer good market fundamentals and strong upward price movement prospects,” says Viljoen.
Tin is not an abundantly occurring mineral around the world, and large industrial scale deposits are rare outside of the major tin producing countries of China, Indonesia and Peru, Bolivia and Brazil from Latin America.
Africa used to be the fourth biggest exporter of tin in the world, but today there are no active industrial scale tin mines in operation. However, AfriTin is in the process of developing the Uis Tin Project in Namibia, which is focused on a pegmatite–hosted tin deposit that happens to be one of the largest open castable deposits of its kind.
AfriTin holds three project areas at Uis, all of which saw historical production from the mid-20th century up to 1990, when production ceased as a result of depressed tin prices. Therefore, the project comes with a non-JORC compliant resource of 73 million tonnes (Mt) at 0.136% tin.
This historic resource is based on a large amount of drilling data conducted by SRK when it was operated by the South African state-run company Iscor, and Viljoen has no reason to believe that the figure is likely to change in the company’s imminent JORC resource announcement.
A giant tin resource
In fact, if the non-JORC resource were to be confirmed, it would place Uis in the top 10 tin mines globally and in the top two for Africa, alongside Alphamin’s Bisie project which is being developed deep in the jungle of Democratic Republic of Congo.
In comparison, AfriTin stands to benefit from a strategically located project within trucking distance to Walvis Bay – a key port town on the coast of Namibia. In addition, AfriTin will be operating in a jurisdiction that encourages foreign investment in the mining sector, and is regulated by a long-established Mining Act.
As a result, Namibia consistently ranks highly in the Fraser Institute’s Annual Survey of Mining Companies, with the most recent edition ranking it the fourth best African jurisdiction for mining and investment.
Returning to the Uis project, AfriTin will publish a JORC-compliant resource before the end of H1 2019 ahead of completing a scoping study and the commencement of a bankable feasibility study (BFS) by the end of the year.
While each of these resembles a significant milestone in the near-term development of the project, the company is most excited by the extent of the tin mineralisation running across the 15 km by 15 km licence area at Uis.
“These pegmatite belts where the tin occurs run for hundreds of kilometres from the coast inland, and some of the belts are more mineralised than others. The ones in the Uis project areas are particularly highly mineralised with tin,” says Viljoen.
During the four decades of historical tin production at Uis, Iscor mined over 12 different open pits at points where they found the pegmatite belts to outcrop. AfriTin has since conducted a geological mapping exercise and found another 180 outcropping pegmatites all with visible tin mineralisation.
“By historic standards this would be one of the top 10 biggest tin mines in the world, but by modern standards, this is real behemoth of a deposit. We are only focusing on one outcropping pegmatite at the moment, but there is so much upside from a resource perspective, it will take us decades to evaluate it to its fullest extent.”
Another exciting development was the recent discovery of lithium pegmatites at the ML 133 licence of the Uis project, located South of the main NR 134 licence. Viljoen explains how the pegmatites at Uis were formed by prehistoric lava flows which were intruded by a variety of elements including tin, tantalite, niobium, beryllium and lithium.
While the ML 133 licence is outside of the current development area at the Uis mine, the discovery of lithium is encouraging and warrants further mineralogical testing at the site.
“It’s a non-core asset for us at this stage, but it does give us an opportunity to realise value from the licence, either by partnering up with someone else or looking to maybe spin it off on its own in the future,” says the CEO.
Phased production approach
AfriTin has taken an unorthodox approach to the development of the Uis project, in the sense that during the last 12 months the company has begun building a phase 1 processing plant while still in the process of proving up the resource.
“We decided to do the plant and the resource confirmation concurrently because we had access to all of the historic resource information for Uis. The process flow of the circuit is not complex either, being a gravity-based separation.
“So, I’ve been able to get a really crack team of in-house engineers on the job which has given us a lot of confidence to go into phase 1 production while we are concurrently proving up the resource.”
The other major benefit derived from building a phase 1 production facility is the opportunity to generate early cash flows while significantly de-risking the full-scale production phase.
“A phased development approach gives us cash flow rather than having to go back to market all the time, and it gets our tin out into the market,” explains Viljoen.
“When the current demand and supply elements for tin start feeding into the general market we would expect the tin price to tick up and the best way to take advantage of that is to have your tin product circulating in the market.
“Having early production really stamps our focus on the tin market and says that we are a player to watch in the future,” he adds.
AfriTin has been able to utilise the mining expertise that resides in Namibia throughout the process of confirming the resource and building the phase 1 plant for Uis. In fact, the level of expertise and equipment that is available in-country is such that the company has not had to use international suppliers, aside from a few additional components from China.
The company’s main contractors are Windhoek-based Crush Plant, a national subsidiary of South African engineering group Osborn, and Metallum Fabrication who provide structural and stainless steel fabrication solutions.
Placing Uis in its geographic context in the Erongo region of Namibia, AfriTin has a duty to ensure that the local communities benefit from the project as much as the company will. As such, AfriTin has placed a strong focus on community engagement throughout the development.
There was no natural economic activity in the region prior to the historic mine, but since operations ended in 1990, the local mining communities suffered as the main source of economic activity was taken away.
In recent years tourism has provided some respite to conditions of poverty in the region, but the multiplier effect of a large mining operation is exactly what the communities need, in terms of job creation and further long-term economic beneficiation.
“We are looking at various initiatives for employing as many local people as possible, particularly those semi-skilled people who worked on the mine before it closed. In general, we plan to upgrade water and electricity supply which will have an indirect but definite multiplier effect on economic activities.
“We believe that a happy mine is based on a happy community, so we will look to stick to that mantra. Our local operating company is 15% owned by a nonprofit organisation that looks after all of the communities near the mine. They all have a direct exposure to profitability and that’s the way sustainable mining should happen these days.”
When the Uis mine reaches full scale production it will produce in the region of 5,000 tonnes of tin concentrate a year. This rate would make AfriTin a significant player in the global tin market, however Viljoen aims to push the company’s overall production up to 10,000 tonnes a year.
This target would be achieved either through resource expansion at Uis or from consolidation of other assets in the portfolio, notably the Mokopane project in South Africa. In the near term, the company will deliver a number of catalysts for value creation, starting with early production from the phase 1 plant.