Malaysia’s tin mining sector can thrive again now that tin prices have stabilised above $20,000 per tonne, Dato Haji Musa Bin Haji Nordin, executive chairman of tin miner Kuari Batu Emas, told Metal Bulletin.
Kuari Batu Emas produces 2,000-2,200 tpy of tin that it sells entirely to Malaysian Smelting Corp, the world’s second-largest tin company.
“In the 1970s, Malaysia was the largest tin producer in the world. But in the 1980s, tin prices collapsed, resulting in people quickly abandoning the sector. So it was not because tin resources were running out” Musa told MB at the ITRI International Tin Conference in Cape Town.
“There are still rich tin resources yet to be exploited in Malaysia. Given the tin prices above $20,000 today, we can see people are looking into developing these tin mines again,” he added.
If tin prices can continue to rise to between $25,000 and $30,000 per tonne, people will have the motivation to develop the tin industry in Malaysia, making tin a main commodity for the country again, Musa said.
Prices justified by costs
As a producer, Kuari Batu Emas wants tin prices to be as high as possible. But the company also needs to see at what prices, end users are willing to buy, Musa noted.
“I think tin prices of $25,000-30,000 per tonne are reasonable,” he said.
The high tin prices are justified by the high costs of mining, Musa said.
“Today, we are talking about sustainable mining and mining rehabilitation. Mining companies need to take these costs into account when pricing tin,” he said, adding that increased fuel and labour costs have also contributed to higher production overheads.
Tin prices to rise
At the same time, Musa is confident that global demand will also boost prices.
“Tin usage is even greater today than in the olden days. All the food cans are using tin now. People are switching from aluminium as the main material to make cans to tin, because aluminium has been proven to be dangerous to health,” he said.
Tin demand also comes from the growth of tin solder and electronics sectors, Musa added.
Opening of new mines
High tin prices have slowly made people look into opening tin mines in Malaysia.
Last year, a 30-year mining concession was awarded to Malaysia’s own Rahman Hydraulic Tin for prospecting tin ore and other minerals in a newly identified 14,000ha at Pengkalen Hulu near Ipoh.
A 10-year mining lease was also awarded to HWG Tin Mining Sdn Bhd, a unit of Ho Wah Genting Bhd in 2008 to mine tin and other minerals on 500 acres in Pengkalan Hulu, with a potential for a further 500 acres as work on the initial area progresses.
Previously, mining was perceived as damaging to the environment, hence the reluctance of many state governments to issue new mining licence to potential operators, Malaysian paper The Star reported.
Today, to ensure efficient and effective implementation of tin or other mineral mining operations, state governments keen to open up mining areas must strictly adhere to the newly revised Second National Mineral Policy (NMP) which was launched last year, as well as the State Mineral Enactment.
NMP aims for an optimum exploration, extraction and utilisation of resources using modern technology as well as research and development with strong emphasis on the environment.
Largest tin producer in 1970s
Tin mining started in Malaysia as early as the 1820s. By 1883, Malaysia had become the largest tin producer in the world. By the end of the 19th century, it was supplying about 55% of the world's tin.
Malaysia’s highest output was in 1979, when it produced almost 63,000 tonnes, accounting for 31% of the world output.
Rich tin mining areas stretched from Kedah state into the Kinta Valley and along the foothills of Perak, Selangor and Johore states. This part of the tin belt includes the capital of Malaysia, Kuala Lumpur, which is the centre of another rich tin-mining area.
The collapse of tin prices from $15,000 per tonne in the 1970s to just above $5,000 per tonne in the mid-1980s resulted in the closure of many mines in Malaysia.
At the same time, new lower cost mines were developed in Brazil and Indonesia, causing the Malaysian output to decline greatly.
Today, Malaysia’s tin reserves are estimated at 350 billion ringgit ($114 billion) or about one million tonnes.