Breaking News: Tin Price Soar After Mining Ban In Wa State, Myanmar

Boosted by the news that all tin mines and beneficiation plants in the Wa State have ceased production on August 1, 2023, tin prices soared on August 3. As of CST 9:18, LME tin rose by 3.37%, and SHFE tin rose by 2.78%.

Citing an article from the International Tin Association (ITA) on August 3:

According to the notice issued by the Central Economic Commission of the Wa State on April 15 and the Notice on the Implementation of Suspension of All Mineral Resources Exploitation issued on May 20, mines in Wa State will stop all exploration, mining, processing and other operations from August 1 onward.

However, as of the date of publication, the Wa State Government has not issued another policy notice. In order to better understand the current operating conditions of local mines and beneficiation plants, as well as the subsequent impact on the market, a survey was made, involving some local mining contractors and beneficiation plant in Wa State, the research results are as follows:

1. Operation status: All mines and beneficiation plants in Wa State, regardless of their size, have all ceased production on August 1, 2023. In particular, except for the technical backbone of the mine, most of the Burmese ordinary workers have been temporarily dismissed. In addition to the shutdown of mines and beneficiation plants, the operation of local ore transport vehicles is also prohibited to prevent the transportation of raw ore from the mines to the beneficiation plants. In addition, it is reported that the Wa State Ministry of Finance has set up a working group to conduct mine inspections and strictly enforce the suspension of production.

2. Duration of shutdown: At present, except for the main leaders of the Wa State, various departments (the Ministry of Finance, etc.) have not yet received a specific notice on the duration of the shutdown from the Wa State Central Committee. Judging from the current situation, after production suspension is lifted, even if mines receive a notice to resume production, it will take at least 1-3 months to prepare for the resumption of normal production.

3. Inventory situation: At present, the mines in the Wa state report that the Wa state government has mined raw ore stocks of about 2 million mt, and it is estimated that 5,000-6,000 mt of tin concentrate in metal content can be extracted, but beneficiation plants have stopped operation, and it is temporarily impossible for tin concentrate to be yielded for sale. It is estimated that 1,500 mt of tin concentrate in metal content are still being cleared at Meng'a Port, and exports from Wa State may stagnate for a period of time after August 10.

ITA comments:

The suspension of production in Wa State was implemented on time and firmly. Although there is no official government document to determine the duration of the shutdown, judging from the enforcement of policy implementation, the duration will far exceed the market's previous expectations. Moreover, the suspension of local ore freight vehicles completely exceeded market's previous expectations, ruling out the possibility of beneficiation plants processing the ore inventory on hand.

Customs clearance data of tin ore in Wa State in July increased significantly both year-on-year and month-on-month, suggesting that local traders were worried about the implementation of the policy, driving them to export in advance. Starting from August, the import volume from Wa State will be greatly reduced. As over 60% of China’s imported tin ore comes from Myanmar, the mining ban will cause supply deficit. It is expected that the lower TCs will inevitably reduce the production enthusiasm of smelters. Before Wa State resumes production to a normal state, domestic smelting supply will gradually decrease, and it will be difficult to return to the high level in the first half of this year.