SMALL CAP IDEA: Will the British tin industry return to its former glory?

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Tin is the metal upon which the British mining industry was based.

Decades and centuries before the British began mining coal for the Industrial Revolution, Cornish people mined tin from underground to feed the cities and markets of an ever-expanding trading world.

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And where British tin traveled the world, it was followed by miners who dug it up, spreading their experience and know-how to new places and setting up many new mining ventures in a wide variety of jurisdictions.

However, tin does not often appear on the radars of those interested in investing in mining these days.

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The biggest producers of pure tin are names you haven’t heard of unless you’re too deep into it – Chinese companies such as Yunnan Tin, Yunnan Chengfeng, Minsur and PT Timah are among them.

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Revival: Many Cornish people have become enthused by the apparent ongoing renaissance of tin, one of their most traditional industries.

European and Australian mining companies have a few tin operations, but very few pure tin companies.

Or at least they weren’t.

The situation is starting to change as tin becomes a key component of future technological development.

The first big call for a tin resurgence came from MIT back in 2018, when a presentation cited by Rio Tinto made the argument that of all the metals, including lithium, zinc, and cobalt, tin was the most likely to benefit from technological advances.

In later years, the price of tin rose to $50,000/ton or so, and MIT seems to have paid off.

This tin subsequently dropped quite substantially to its current level of around $25,000, which is perhaps a good illustration of the need to warn against over-enthusiasm when investing in commodities, but nonetheless, the bullish case outlined by MIT still stands.

Recent fixes have been more about immediate black swan events like Ukraine and Covid rather than long term. And tin is still slightly higher than it was when MIT made its forecast.

During this time of variable prices, miners with a fixed cost base watch margins expand and contract. But overall, for those mining companies that have managed to keep inflationary pressures to a minimum, such as Andrada Mining, times have been pretty good.

and is divided into Andrade (4.2 pence), which until recently was known as AfriTin, has nearly doubled in value since 2021 as tin production at its Uis mine in Namibia has taken off. The fact that the company is also developing a production line for lithium has also helped.

But other companies with less developed tin projects and operations are also popular with investors.

Broker SP Angel recommends Cornish Metals (13.3p) to investors on the latest market news as the company continues its efforts to revitalize the tin industry.

Cornish Metals has recently raised a large sum to dewater the famous South Crofty mine and is also mining attractive tin grades from newly explored sites in the southern part of the estate.

“The discovery of a new zone of high-grade tin mineralization in the heart of a historic mining area is a tremendous achievement that once again demonstrates the exploration potential of the region,” Richard Williams, head of Cornish Metals, said after the latest drilling results. .

Of course, the British government would be delighted if a new large-scale production of metal, which seems to be becoming more and more strategically important, was established at the local level.

The private company Cornish Tin has also made significant strides in both old and new mining, while the general hunt for lithium creates a sense of an impending local mining renaissance.

It will happen?

This is yet to be seen, of course.

But if the MIT analysis turns out to be correct in the long run, and the price of tin starts moving up again, then the odds are in its favor.

The difference, however, is the lack of junior miners who have contact with tin. This is not the same as gold or copper, where juniors are worth ten kopecks.

Conversely, when the next big up move does occur, speculative money will have little choice.

This in itself can trigger the risks inherent in any speculative bubble. This is why several established names such as Andrada, Cornish Metals and Cornish Tin will be attractive to savvy investors.

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