Post on 13-Apr-2017
Myanmar: The Black Swan of Global Tin?
Dr Nicholas J Gardiner1 & John P Sykes2,3,4
1Department of Earth Sciences, University of Oxford, UK 2Director, Greenfields Research, UK
3Department of Mineral & Energy Economics, Curtin University, Australia 4Centre for Exploration Targeting, University of Western Australia
Collaborators:
Cui Lin, ITRI, China Allan Trench, Department of Mineral & Energy Economics, Curtin University and Centre for Exploration
Targeting, University of Western Australia
What is a Black Swan?
An unpredictable, rare, but nevertheless high impact event
“a rare bird in the lands, and very much like a black swan”
Juvenal, 1st Cent AD
Improbable but high impact
-1000%
0%
1000%
2000%
3000%
4000%
5000%
0
20000
40000
60000
80000
100000
120000
Global Tin Production 2014 (t) and % Change from 2009
Source: Kettle et al., 2014, 2015 (ITRI)
How does Myanmar fit into the global tin industry?
Tin prices are at 30-year highs Long term tin price history
0
10000
20000
30000
40000
50000
60000
19
00
19
10
19
20
19
30
19
40
19
50
19
60
19
70
19
80
19
90
20
00
20
10
2014 Inflation Adjusted Tin Price (US$/t)
Long term tin price histogram
0
5
10
15
20
25
30
35
40
45
50
0 to 5 5 to 10 10 to15
15 to20
20 to25
25 to30
30 to35
35 to40
Price range, $000/tonne, 2010 real terms
Prices at 30 year highs
Number of years in each price band
Recent prices mainly is this
range
Source: DiFrancesco et al., 2014 (USGS), Crawford et al., 2014 (USBOL), Kettle et al., 2015 (ITRI)
Initially due to electronics…
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Lead-free solder Lead solder
24th July 2014 The Case for Tin Exploration Slide 7 of 18
Lead-free solder as a % of global shipments
Conversion to tin
solder drove tin
prices
Source: ITRI
…and Chinese demand
Tinplate: 54,500t (16%)
Chemicals: 54,200t (16%)
Brass/Bronze: 18,600t (5%)
Glass: 7,000t (2%)
Others: 37,500t (11%)
China: 102,900t (30% of tin & 58%
of solder)
ROW: 73,600t (21% of tin & 42% of
solder)
Solder: 176,500t (51%)
Tin Consumption (2013e)
24th July 2014 The Case for Tin Exploration Slide 8 of 18 Source: Kettle et al., 2014 (ITRI)
But weak supply now the driver
250.0
275.0
300.0
325.0
350.0
375.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Tin Supply-Demand Growth (Kt)
Refined Supply Mine Supply Refined Demand
24th July 2014 The Case for Tin Exploration Slide 9 of 18
Demand strength
driving prices
Mine supply weakness
driving prices
Source: Kettle et al., 2014 (ITRI)
Current supply faces many problems
© Greenfields Research & ITRI; Images: Greenfields Research &
Shutterstock
Informal mining
Ageing mines
Conflict Minerals
High political risk
24th July 2014 The Case for Tin Exploration Slide 10 of 18
With few advanced tin projects
0 5 10 15 20 25 30
Early exploration
Advanced exploration
Scoping
Pre-feasibility
Feasibility
Permitting
Financing
Construction
Commissioning
No. Projects
Tin projects at different stages
24th July 2014 The Case for Tin Exploration Slide 11 of 18 Source: Sykes et al., 2014 (Greenfields Research & ITRI)
Myanmar and the future of tin • Tin prices are at their highest levels since the 1980s.
– Tin has become a China-focused ‘electronic metal’ helping drive consumption.
– Tin mine supply is struggling to keep up with demand growth.
• Tin is suffering from underinvestment in mine project development and exploration.
• Myanmar has previously been highlighted as a source of uncertainty.
– Myanmar has since been confirmed as a disruptive force.
– Myanmar could now provide both the needed short term and long term tin mine supply growth
24th July 2014 The Case for Tin Exploration Slide 12 of 18
Myanmar (Burma)
Myanmar
• 2nd largest SE Asian country by area – Pop 52M (est)
• Significant economic decline over past 60 years – 1940: 2nd wealthiest
country in SE Asia – 2012: now the poorest
• Huge potential – Geographically strategic – Natural resources
www.dbam.com
Shan Plateau:
Lead,
Zinc,
and
Silver
Orogenic
Gold
World-
class
Rubies,
skarn-type
gold
Jade
Belt
Magmatic
Arc: Copper
& Gold
porphyry
Slate Belt:
Tin
Tungsten
granites
Myanmar – opening up?
• 2008 – new constitution
• 2011 – start of reforms…
– EU, North American & Canadian sanctions temporarily lifted 2012
• Elections late 2015
– But democracy still a work in progress
Hall, 2012
Geological Background
CORNWALL
NIGERIA
GERMANY
THAILAND +
MYANMAR
USSR (FAR EAST)
SOUTH CHINA
QUEENSLAND
TASMANIA
MALAYSIA
INDONESIA
CONGO
SOUTH AFRICA
BRAZIL
BOLIVIA/PERU
SPAIN/
PORTUGAL
Lehmann, 1990
95% of historic Sn prod from 3 main jurisdictions; of which Southeast Asia responsible for half
Tin Mineralization
Tin Mineralization
• Related to emplacement of peraluminous “S-type” granites
• Sn, W, U, Li, In, Ta-Nb, REE’s are all co-genetic
• Principally found as quartz-vein or pegmatite-hosted cassiterite (SnO2) – resilient hence placer deposits
Fluid exsolution
SE Asia Tectonics: Collage of micro tectonic plates that converged over ca. 100Ma
Metcalfe, 2011
260Ma
210Ma
Myanmar
Closure of Palaeo-Tethys ca. 220Ma
Metcalfe, 2011
Myanmar
Closure of Neo-Tethys ca. 50Ma
India collides with Asia
Neo-Tethys
Gardiner et al., 2015
EARLY- MIDDLE PERMIAN
LATE PERMIAN 260 MA
LATE TRIASSIC- EARLY JURASSIC 230-200 MA
LATE CRETACEOUS 70 MA
Sibumasu
Palaeo-Tethys Back-ArcBasin
Shelf Carbonates
SUKHOTHAI
ARC
Palaeo-Tethys
Palaeo-Tethys Sediments
Neo-Tethys
SUKHOTHAI
ARC
Sibumasu
Sibumasu
Gondwana Indochina
India
Indochina
Indochina
Indochina
Nan Suture
Chiang Rai Line
PALAEO-TETHYS SUTURE
SUKHOTHAIARC
MAINRANGE
PROVINCE
MAINRANGE
PROVINCE
Shelf Carbonates
W E
Nan Suture
Chiang Rai Line
PALAEO-TETHYS SUTURE
Back-arccollapse
I-Type S-Type
WUNTHO-
POPA
ARC
MMM
BELT
S-Type
SUKHOTHAIARC
Tin granite belts of SE Asia
Ranong F
ault
Sag
ain
g F
au
lt
Three Pagodas
Fault
Ma
e Y
ua
m F
au
lt
Khlo
ng M
aru
i Fault
Mae Ping
Fault
NO
TN
EB
G-
ER
UT
US
BU
AR
CH
IAN
G R
AI LIN
E
LA
NC
AN
GJIA
NG
ZO
NE
GRANITE PROVINCES
Eastern (I-type)
Main Range (S-type)
Northern Thailand
Migmatitic Complex
Mogok-Mandalay-Mergui Belt
Wuntho-Popa Arc
(S-type)
400 km
National boundary
Approximate limits of the
main granite provinces
12°
4°
110°106°102°98°
PENINSULARMALAYSIA
CAMBODIA
THAILAND
LAOS
VIETNAM
CHINA
MYANMAR(BURMA)
Bangkok
Mogok
Yangon
DI
CMS
ukhoth
ai A
rc
SUMATRA
TIN ISLANDS
BORNEO
KualaLumpur
Phuket
Singapore
TiomanIsland
Myeik
NA
N S
UT
UR
E
• Magmatic expressions of the Mesozoic-Cenozoic tectonic history
Primary tin deposits are
directly related to these granite
belts
Gardiner et al., 2014
Ranong F
ault
Sa
ga
ing
Fa
ult
Three Pagodas
Fault
Mae
Yu
am
Fa
ult
Khlo
ng M
aru
i Fault
Mae Ping
Fault
NO
TN
EB
G-
ER
UT
US
BU
AR
CH
IAN
G R
AI LIN
E
LA
NC
AN
GJIA
NG
ZO
NE
GRANITE PROVINCES
Eastern (I-type)
Main Range (S-type)
Northern Thailand
Migmatitic Complex
Mogok-Mandalay-Mergui Belt
Wuntho-Popa Arc
(S-type)
400 km
National boundary
Approximate limits of the
main granite provinces
12°
4°
110°106°102°98°
PENINSULARMALAYSIA
CAMBODIA
THAILAND
LAOS
VIETNAM
CHINA
MYANMAR(BURMA)
Bangkok
Mogok
Yangon
DI
CM
Sukhoth
ai A
rc
SUMATRA
TIN ISLANDS
BORNEO
KualaLumpur
Phuket
Singapore
TiomanIsland
Myeik
NA
N S
UT
UR
E
The Myanmar tin industry
Tin mining: potted history
• 14th C: artisanal mining (Burmese/Chinese)
• 19th Century: The Europeans
– 1839: JW Helfer discovered tin near Tavoy
– 1862: Mawchi Mine discovered by O’Riley
– 1888-1892: Indian Geological Survey
– Early 20th C: major mine development
• 1942-44: Japanese occupation
• 1946: Burmese Independence
– 1962: All mines nationalized; start of decline
Mawchi
Dawei area
Tin Mining in Myanmar • Main areas historically in the south,
around Dawei (Tavoy) and Myeik (Mergui)
• Important areas of mixed deposits, primary and alluvial deposits – Unlike rest of SE Asia still relatively
untapped – Placer-type deposits ideal for
small-scale artisanal mining • Tin-tungsten mixed concentrates
– Problem for artisanal producers
Dawei (Tavoy)
• Historic tin mining district
• Over 50 major primary and placer mines – Hermyingyi
– Heinda
– Pagaye
Myanmar - The Black Swan?
• In 2014 Myanma emerged to become World’s 3rd biggest tin producer
• But…most of this production increase is from the Man Maw mining district, Wa State
– not the traditional tin producing areas
Wa State
• Autonomous, unrecognized state
– Outside the control of Nay Pyi Daw
• Pop ca. 560k
• Ethnically Chinese
• Run by UWSA
Man Maw Mine Site, Wa State
• 90km from Pangkham
• 100km2 mine site, multiple producers
• Exclusively primary deposit
– Annual prod 20,000t
– 1-2% grade open pit, higher underground
• Sell crushed ore (10% Sn) and partially refined conc (20% Sn) direct to China
Man Maw mine site
Road conditions are extremely bad
Man Maw – future unclear
• No geological data
– Reserves unknown
– Mine lifetimes unknown
• Infrastructure poor
– Bad roads!
– Some new investment, e.g. new power station
• Security issues on the border
So – can this benefit Myanmar?
Myanmar – the future
• In 2013 mining represented ca. 0.1% GDP
– This represents a hugely underdeveloped industry
– Value of 2014 tin production: 30,000t x $20,000 is only $600 million (in a $53 Billion GDP economy)
• New mining law?
• 2015 Elections
• Transparency (EITI candidate country)
• Environmental issues
Myanmar: summary
• Surprise emergence as 3rd biggest tin producer – Majority of new production outside traditional tin-
producing area
• Still a high-risk jurisdiction – Political uncertainty
– 2015 Elections & Mining Law
• But huge untapped minerals reserves remain – “Traditional” tin producing area retains great potential
– Mining could significantly help Myanmar’s economic redevelopment
For more information:
• ITRI Ltd: www.itri.co.uk
• Greenfields Research: www.greenfieldsresearch.com
• Centre for Exploration Targeting: www.cet.edu.au
• Nick Gardiner: http://www.earth.ox.ac.uk/people/profiles/research/nickg
Contact details:
• Nicholas J. Gardiner: nick.gardiner@earth.ox.ac.uk
• John P. Sykes: john.sykes@greenfieldsresearch.com
Thank you
• Collier, P, (2010), The Plundered Planet: How to Reconcile Prosperity with Nature, Penguin Group: London
• Crawford, M., Church, J., & Akin, B., (Feb. 2015), CPI Detailed Report, USBLS.
• DiFrancesco, C.A., Carlin, Jr., J.F., & Tolcin, A.C., (1 Apr. 2014), Tin Statistics, USGS.
• Gardiner, N.J., Robb, L.J., Searle, M.P. 2014. Applied Earth Science.
• Gardiner, N.J., Searle, M.P., Robb, L.J., Morley, C.K. 2015. Journal Asian Earth Sciences
• Kettle, P., Lin, C., Tianhua, R., Mulqueen, T., & Davidson, V., (Feb. 2015), Tin Monitor, CRU & ITRI.
• Kettle, P., Pearce, J., Lin, C., & Sykes, J.P., (2014). Tin Industry Review, ITRI
• Sykes, J.P., (2013). Structural changes in mine supply: Case studies in tin and tantalum, Metal Pages Electronic & Specialty Metals (Shanghai, China), 11 September.
• Sykes, J.P., Kettle, P., Staffurth, N., & Davies, R.S., (2014). New Tin Supply, Greenfields Research & ITRI
• Other data referenced as ‘ITRI’ provided on an ad hoc basis.
References
Dawei Beach, Tanintharyi Region