The price of tin has risen 144% since March 2020, with demand climbing and supply dwindling. In our recent article on tin outperforming other metal commodities, we concluded this trend looks set to continue. So, which companies are worth investing in to benefit from the rising price of tin?
There are a selection of tin mining companies to choose from, and some companies use tin in the manufacture of goods.
Mining is a notoriously risky area to invest in, but it can be highly lucrative when backing the winners.
Here are a few tin-related businesses to consider investigating further.
Alphamin Resources (TSXV: AFM, JSE AltX: APH)
Alphamin Resources is a tin miner based in Mauritius. Its flagship project is in the Democratic Republic of Congo (DRC). Here it has an 84% stake in the Bisie tin underground project at the Mpama North Mine, which is believed to yield the world’s highest-grade tin, at roughly 4.5%. That comes in at almost four times higher than most global tin mines.
Alphamin is already producing around 3% of the world’s tin from its Mpama North Mine in the DRC. Meanwhile, Recent drill results show the continued presence of high-grade samples at its Mpama South Prospect.
But the DRC is a conflict-affected and high-risk area that deters bigger companies from operating there.
The Alphamin Resources share price has soared over 442% in the past year. It’s market cap is CA$869m.
AfriTin Mining (LON: ATM)
AfriTin is a London-listed tin explorer. AfriTin’s flagship Uis Tin Mine in Namibia. Last month it raised £13 million in an oversubscribed share placing to speed up expansion and exploration at Uis. However, AfriTin is not yet profitable, and the high tin price is supporting its share price.
The AfriTin Mining share price has risen 232% in a year.
IBU-tec advanced materials (ETR: IBU)
A German company, IBU-tec, provides thermal process engineering solutions, including treatments for inorganic materials. For instance, coatings for glass bottles to make them last longer.
Its BNT Chemicals division is specializing in wet chemical processes for manufacturing tin-based products.
The IBU-tec share price is up 230% in the past year.
Yunnan Tin Company Ltd (SHE: 000960)
Yunnan is the largest tin producer and exporter in China and the world. In November, it launched production at a new smelting facility. Once at full capacity, it hopes to produce 70,000 tonnes of refined metal annually, contributing over a fifth of global output.
The Yunnan share price has experienced extreme volatility in the past year but is up 78%.
Timah Tbk PT (IDX: TINS)
PT Timah is an Indonesian engineering services company. Its output fell 40% last year due to the pandemic.
Nevertheless, the Timah share price is up 154% in a year but down 38% from its 52-week high.
Cornish Metals (LON: CUSN)
Cornish Metals listed on London’s FTSE-AIM market in February. Since then, its share price has climbed 44%.
The company is a Canadian mineral exploration and development firm and an Associate Company of Osisko, Barkerville Gold Mines.
Its flagship projects in Cornwall, UK, are the United Downs copper-tin project and the South Crofty tin project.
Cornish Metals is not profitable and lost C$1.6 million during FY20 to 31 January 2021. It plans an 18 month, 9,100-meter initial drilling program at United Downs using the proceeds from its IPO.
Elsewhere in the world
Minsur SA is a Peru-based mining company primarily engaged in the exploitation, smelting, refining, and commercialization of tin. Its share price has also seen volatility in recent months but is up 36% year-to-date.
Malaysia Smelting Corp (KLSE: MSC) is up 185% in the past year.
Meanwhile, in Bolivia, Empresa Metalurgica is the state tin producer. And Eloro Resources Ltd. (TSX-V: ELO; OTCQX: ELRRF FSE: P2QM) is exploring targets at its Iska Iska silver-tin polymetallic project in Potosi Department, southern Bolivia.
The Eloro share price is up a whopping 816% in the past year but down 15% from its 52-week high.
Other companies operating in the tin chemicals market include DuPont de Nemours (NYSE: DD), TIB Chemicals, and Keeling & Walker, among others.
Is there a tin ETF?
Exchange-traded funds (ETFs) are often deemed a safer way of investing in a sector than investing directly in individual stocks. That’s because when you invest in an ETF you buy shares in a basket of stocks related to that sector or index being tracked.
There are a few ways to invest in tin via ETF.
WisdomTree Tin ETF (TINM)
The WisdomTree Tin ETF (TINM) tracks the Bloomberg Tin Subindex. In this instance, the ETF tracks the index performance, rather than the price action of individual stocks.
The Bloomberg Tin Subindex is made up of futures contracts on Tin. This means its performance reflects the return of underlying commodity futures price movements.
iPath Bloomberg Tin Subindex ETN (JJT)
An exchange-traded note (ETN) differs from an ETF in the way it’s structured. An ETF gives the investor a stake in the underlying commodity or equity, while the ETN is unsecured and acts more like a bond.
The iPath Series B Bloomberg Tin Subindex Total Return ETN (JJT) is similar to the WisdomTree Tin ETF in that it tracks the Bloomberg Tin Subindex and its performance depends on the activity in tin futures contained in the Subindex.
Due to the cyclical nature of commodities, tin tends to go up in value when the global economy is strong. But it’s volatile, so not necessarily a popular choice for long-term investors.
BlackRock iShares MSCI Global Metals & Mining Producers ETF
The BlackRock iShares MSCI Global Metals & Mining Producers ETF gives investors access to several metal mining companies. This ETF contains many well-known mining companies including Rio Tinto (ASX: RIO), BHP Group (NYSE: BHP), Cia Vale Do Rio Doce (BVMF: VALE3), Freeport-McMoran (NYSE: FCX), Anglo American (LON: AAL), and Glencore (LON: GLEN).
Because tin is listed as a conflict mineral most of these companies do not mine for tin.
Risks to investing in Tin
Tin has a multitude of uses and is likely to remain in high demand. However, there are several risks to investing in this commodity.
Tin is considered a ‘conflict mineral’ because it comes from areas where illegal mining still takes place. Companies like Freeport McMoran check their tin is sourced from smelters designated as “conflict-free” by the Responsible Minerals Assurance Process to meet current global standards.
The success of a tin company is usually dependent on the success of its core projects. If it doesn’t discover the metal or meet its objectives, its share price could fall.
Headwinds facing tin mining companies include geopolitical tensions, geological conditions, operational and technical challenges, industrial and environmental accidents, government regulations, weather, illegal mining, and much more.
Therefore, investors should carefully weigh up the pros and cons before jumping in.