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China Nonferrous Mining to Acquire Shares of Brazilian Tin Company for US$340 Million
Published: 12.2.2024
On November 27, a subsidiary of China Nonferrous Mining Group agreed to acquire a stake in a Brazilian tin producer. The acquisition is in response to the demand prospects for tin as a material due to the development of AI.
Minsur SA, headquartered in Lima, Peru, stated that a trading company under CNMC will acquire Minsur's indirect stake in Mineração Taboca for US$340 million, subject to certain conditions.
Tin is one of the first metals to face shortages when the epidemic puts pressure on the global supply chain. Although the price of tin has fallen sharply from its peak in early 2022, the in-depth development and expansion of artificial intelligence technology in the past two years, especially in the context of the AI computing power era, has driven the growth of demand for tin metal, one of the "computing power metals". This year, tin prices have risen by nearly 14% as the introduction of artificial intelligence and advanced computing is expected to bring a lot of new demand.
At the same time, the global tin market is currently in a situation of supply exceeding demand. From the supply side, global tin ore resource reserves and production are both on a downward trend, and the tin ore grade in major producing countries or regions such as China, Indonesia and Myanmar has declined severely, and mining costs have risen. In addition, the production restrictions in Myanmar's Wa State have a greater impact on the supply side, resulting in a reduction in the global supply of tin concentrate.
Although the global refined tin smelting capacity is loose, the proportion of recycled tin in the total output is low, further limiting the supply increase.
In terms of demand, the main application areas of tin include solder, tinplate and tin chemicals, among which solder accounts for the largest proportion. Data show that the largest downstream consumer area of tin in the world is still the electronic solder field, accounting for more than 50%. With the increase in photovoltaic installations and new energy vehicle sales, as well as the rise of 5G construction, AI and industrial Internet, the demand space for tin is expected to expand. It is expected that global tin demand will remain between 383,000 tons and 429,000 tons from 2023 to 2025.
As one of the important raw materials to produce AI technology, the demand for tin is expected to become a new growth point. And China's nonferrous mining companies also hope to lock in the supply of tin, which occupies an important position on the list of key minerals.
