Tin has always played a crucial role in human development. Bronze, the alloy created by adding one part tin to ten parts copper, revolutionized the ancient world in around 3,000 BC. The hardy metallic compound allowed people to make durable weapons, tools and household objects. Historians regard the Bronze Age as the first real globalization, as tin producers looking to make bronze transported their metal to copper producers in far-off parts of the world, and vice versa.
In the early 1800s, the first canned food arrived on the shelves after a Frenchman, Philippe de Girard, conceived of the tin canning process. The tin canning process revolutionized food preservation, and armies could now go to war on a full stomach: the Royal Navy received its first tin canned goods in 1813. By 1820, tin canisters were also being used to securely package gunpowder, seeds and turpentine.
Now the world is set for a new revolution, and tin will again play a central role. The Fourth Industrial Revolution (4IR) will see major developments in technology, while climate change will require governments globally to introduce power-production methods that radically reduce CO2 emissions.
The reason tin is at the forefront of the 4IR, says Alphamin Resources CEO Maritz Smith, is because it is used in the making of solder, a key component in the manufacture of circuit boards and the photovoltaic cells needed for solar panels. “The greatest drivers for tin demand will be the Internet of Things [the billions of physical devices around the world that are now connected to the internet] and climate change.”
With electric vehicles set to become a more common feature on our roads, production of the lithium-ion batteries needed to power them will grow exponentially, and tin is needed for this. “It will also be the material of choice for the next generation of energy-generating and storage devices while being the ‘glue’ that holds all of these components together. This will make tin a vital component in the manufacture of not only electric vehicles but also advanced robotics, renewable energies and advanced computing,” says Smith.
Alphamin, headquartered in Mauritius and listed on the TSX Venture Exchange and the Johannesburg Stock Exchange AltX, has a high-grade tin mine and a next-door prospective tin complex under license in the Democratic Republic of Congo. Alphamin produces 4% of globally mined tin.
Alphamin’s Share Price Has Risen Over 300% In the Last 12 Months
Due to the surge in demand for tin, Alphamin has experienced a 110% rise in its share price over the past 12 months. Listed on the TSX.V and the JSE, Alphamin (TSX.V: AFM) remains one of the only ways to gain exposure to the tin market.
The Company reported stellar production and sales results in its fourth-quarter financials for 2021: contained tin production was up 10% from the prior quarter to 3,114 tons; contained tin sales were up 13% from the prior quarter to 3,056 tons; record quarterly EBITDA guidance of $74million was up from 38% from prior actual; a net cash position increase to $68 million and maiden dividend of CAD$0.03 per share were declared.
“Current Demand for Tin Driven by a Surge in Medical Sales, Home Equipment and Personal Devices” (Fitchsolutions)
Historically, demand for tin has grown at a steady 2%-3%, but there has been a significant boost in demand over the past two years with the Covid-19 pandemic, according to FitchSolutions Country Risk and Industry Research. This demand is growing due to the increased sales of medical equipment as well as the home equipment and personal devices that are needed so employees can work remote.
“The slow pace at which global tin supply has recovered from the Covid-19 pandemic has been significantly outpaced by the rapid recovery in demand, especially as tin is used in electronics (through solders in semiconductors), a sector that saw a massive spike in demand during the Covid-19 pandemic due to the increased sales of medical as well as home equipment and personal devices,” says FitchSolutions in a November 2021 analysis update.
Tin solder is a major component of photovoltaic cells, so with few new tin mines being established worldwide, manufacturers have had to turn to existing stockpiles which are now at record low levels. This is leaving many countries, including China, where solar power is a major part of their energy mix, with insufficient power. Consequently there is a heightened urgency to find alternative power sources, especially renewables: As FitchSolutions says: “The resulting reduction of global refined tin stockpiles has continued to force prices higher in the year-to-date, and left the market significantly exposed to price increases during China’s power crunch. With tin solder being a major part of photovoltaic cells, that are the main components that make up a solar panel, demand for tin during China’s power crunch also sky-rocketed.”
Analysts Increasing Their Forecasts for Tin
None of this sees tin prices going down soon. In November 2021, FitchSolutions increased their forecast for 2021 and 2022 from USD28,000/tonne and USD26,000/ tonne previously to USD30,500/tonne and USD32,500/tonne, respectively, to account for the surge in prices to record highs in the year-to-date.
Prices hit a record of $44,000/tonne in January 2022. Additional supply does not appear forthcoming while demand seems completely insatiable. The tin stockpiles are fast becoming depleted, resulting in a perfect storm for tin prices to spike. The main concern is that new supply takes time to come, while the globe’s main tin producers-Myanmar and Indonesia are further exacerbating supply constraints. Myanmar is battling to maintain output levels, while Indonesia is looking to internalise tin and nickel.
As such, Alphamin’s next door Mpama South deposit may be what the world urgently needs in terms of new supply.
All this presents huge opportunities for relative newcomers like Alphamin, already with an impressive market cap of C$1.27bn. Alphamin is a globally significant high-margin tin producer with near-term expansion potential and an impressive 3% dividend yield, which offers a unique opportunity for investors interested in this pro-technology metal.
