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

Renaissance: many Cornish locals have become enthusiastic about the apparent ongoing renaissance of pewter, one of their most traditional industries

Tin is the metal on which the British mining industry was founded.

Decades and centuries before the British began mining coal for the Industrial Revolution, the Cornish were mining tin from the ground to supply the towns and markets of an ever-expanding trading world.

And where British tin has traveled around the world, the miners who mined it have followed, peddling their expertise and know-how to new places and establishing a host of new mining operations in very diverse jurisdictions. distant.

These days, however, tin doesn’t often show up on the radars of those looking to invest in mining.

The biggest pure tin producers aren’t names you’ve heard of unless you’re deep enough – they include Chinese companies like Yunnan Tin, Yunnan Chengfeng, Minsur and PT Timah.

Renaissance: many Cornish locals have become enthusiastic about the apparent ongoing renaissance of pewter, one of their most traditional industries

Renaissance: many Cornish locals have become enthusiastic about the apparent ongoing renaissance of pewter, one of their most traditional industries

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

Or at least there wasn’t.

The situation begins to change, as tin begins to establish itself as a key element in future technological development.

The first clarion call for tin’s resurgence came from the Massachusetts Institute of Technology in 2018 when, in a presentation cited by Rio Tinto, the argument was made that of all metals – including lithium, zinc and cobalt – most likely to benefit from technological progress was tin.

In the years that followed, the price of tin soared to US$50,000 a ton or thereabouts, and MIT seemed justified.

That tin then fell back quite substantially to current levels of around US$25,000 is perhaps a good illustration of the need to be cautious against excessive exuberance in commodity investing, but nonetheless the bullish case presented by MIT remains in place.

Recent corrections have been tied more to immediate black swan events – such as Ukraine and Covid – and less to long-term prospects. And tin is still much higher than it was when MIT made its prediction.

During these times of fluctuating prices, miners with fixed cost bases have seen their margins widen and contract. But overall, for producing companies that have managed to keep inflationary pressures to a minimum, companies like Andrada Mining, times have been pretty good.

And shares in Andrada (4.2p), which until recently was called AfriTin, have nearly doubled in value since 2021 as tin production from its Uis mine in Namibia began to kick off in earnest. The fact that it is also developing a lithium production line has also helped.

But other companies with less advanced tin projects and operations have also found favor with investors.

Broker SP Angel has recommended Cornish Metals (13.3p) to investors in recent market updates, as the company continues its efforts to revitalize the tin mining industry here.

Cornish Metals recently raised a significant sum to dewater the famous South Crofty mine and also found attractive tin grades in newly explored areas on the southern part of the landholding.

“The discovery of a new high-grade zone of tin mineralization in the middle of an historic mining district is a tremendous result and again demonstrates the exploration potential of the area,” said Cornish Metals chief, Richard Williams, following the latest set of drill results. .

Certainly the UK government would be only too delighted if significant new production of what seems to be becoming an increasingly strategic metal could be established locally.

A private company, Cornish Tin, is also making good progress in mining old and new ground, while lithium hunting gives the feeling of an impending local mining renaissance.

Will it happen?

That remains to be seen, of course.

But if the MIT analysis turns out to be correct in the longer term and the price of tin starts to rise again, then the odds are very favorable.

The difference, however, is in the rarity of junior miners exposed to tin. It’s not like gold or copper, where the juniors are ten for a penny.

On the contrary, when the next big bull run comes, there will be only a handful of choices for speculative money.

This in itself can lead to the kinds of risks inherent in any speculative bubble. This is why the few already established names like Andrada, Cornish Metals and Cornish Tin will be the destinations of choice for seasoned investors.

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