Between March 2020 and April 2022, the price of tin rose 222% to more than $46 per kilogram due to demand climbing and supply dwindling. In our June 2021 article on tin outperforming other metal commodities, we concluded the trend looked set to continue, and it did. But since April 2022, the cost of tin has fallen. Today, are those tin companies that did well last year still looking like a good investment? And will the price of tin rise once more?
There is a selection of tin mining stocks to choose from, and some companies use tin to manufacture 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 stocks 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.
In Q3 2022, Alphamin exceeded its quarterly production guidance of 3,000 tonnes despite mining a structurally complex area.
Tin prices are beginning to climb again after hitting a low of around $18.37 in October. Some view Alphamin as undervalued as its quarterly EBITDA is still above $30m and Mpama South is expected to boost annual output significantly. However, commodity stocks remain inherently risky and this is not investment advice.
Year-to-date, the Alphamin Resources share price has fallen 22%. Its market cap is CA$945m.
AfriTin Mining (LON: ATM)
AfriTin Mining Ltd (LON: ATM) is a London-listed tin explorer. AfriTin's flagship Uis Tin Mine in Namibia. In May 2021, 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 was supporting its share price in 2021.
The company has since branched into lithium and may soon be enacting a name change to reflect this.
AfriTin Mining has made progress on three fronts in its lithium product development program. The company has updated its mineral resource estimate, started pilot-scale metallurgical testing for lithium and taken the first steps to explore commercial partnerships for its lithium petalite concentrate.
The goal of the program is to show that the Uis mine in Namibia has the potential to produce a commercially viable lithium petalite concentrate, provide samples for potential partners, and reduce the risk of developing a commercial-scale processing plant for lithium.
The AfriTin Mining share price has fallen 23% in 2022. Two FactSet broker contributors have a consensus Buy rating on ATM stock with a share price target of £0.20.
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. IBU-tec advanced materials AG offers services like material development, lab analysis, and process optimization, among others.
IBU-tec is a company that develops and makes high-quality materials for industries. It uses special technology and the knowledge of its 250 skilled employees to create materials. The company's products include LFP battery material, which is used in batteries for electric cars and energy storage, and solutions for air purification and reducing plastic waste.
IBU-tec works on long-term global trends, like protecting the environment, and has customers all over the world, from small businesses to big corporations.
The company has recently received a major order from an international commercial vehicle manufacturer to develop a new cathode active material for batteries. The basis for this will be IBU-tec's existing lithium iron phosphate products. IBU-tec sees this as a possible model for future development partnerships and orders from the industry and hopes that such partnerships will lead to large-volume series production of new materials.
IBU-tec's subsidiary, BNT Chemicals specializes in wet chemical processes for manufacturing tin-based products, such as tin catalysts. Catalysts are important in the production of substances because they can make reactions faster or more efficient. They also make some reactions possible that would not happen otherwise.
Tin catalysts can be more effective than other options. The right catalyst for a process depends on the final application. BNT offers a wide range of solid and liquid catalysts. Some examples of powder catalysts that BNT makes are MBTO, DOTO, and DBTO. BNT can provide the right tin catalyst or make a custom one for a customer.
The IBU-tec share price is down close to 40% YTD but has been rising steadily since September.
IBU-DE stock has a price-to-earnings ratio (P/E) of 108 (what is a P/E ratio?) and P/BV of 2.8. It does not pay a dividend (what is a dividend?).
Yunnan Tin Company Ltd (SHE: 000960)
Yunnan is the largest tin producer and exporter in China and the world.
Yunnan Tin Group (Holding) Company Limited, or YTC, is the biggest tin producer and exporter in China and the world. Its headquarters are in Kunming, Yunnan. YTC makes tin metal and chemicals based on tin and arsenic.
The company was founded by the Chinese government in 1883 as the Gejiu Manufacture & Commercial Bureau. YTC owns two subsidiaries that are listed on stock exchanges: Yunnan Tin Company Limited and Sino-Platinum Metals Company Limited.
YTC was established in 1998 and listed on the Shenzhen Stock Exchange in 2000. It is the only tin stock in the Chinese tin industry.
The Yunnan share price has experienced extreme volatility in the past few years. Indeed, the tin stock SHE: 000960 is down 27.9% YTD.
Timah Tbk PT (IDX: TINS)
PT Timah is an Indonesian engineering services company. Its output fell 40% in 2020 due to the pandemic.
The Timah share price is down 20% YTD. This tin stock comes with a 5.2% dividend yield.
Cornish Metals (LON: CUSN)
Cornish Metals was publicly listed on London's FTSE-AIM market in February 2021. Afterwards, its share price proceeded to climb 198% until March 2022. But today, the CUSN share price is down 46% YTD.
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 bought the South Crofty tin and United Downs copper/tin projects and extra mineral rights in Cornwall, UK, in July 2016. These extra rights cover around 15,000 hectares and include old mines that were previously mined for copper, tin, zinc, and tungsten.
Cornish Metals is not profitable.
Elsewhere in the world
Minsur SA is a Peru-based mining company primarily engaged in the exploitation, smelting, refining, and commercialization of tin.
Malaysia Smelting Corp (KLSE: MSC) is down 46% YTD.
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. In a recent interview with Eloro, BTV states,
The global energy transition creates soaring demand for silver and tin. With five active drills on their flagship project in Bolivia, Eloro is on the verge of a major discovery.
The Eloro share price is down 8% YTD.
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.
Article Updated: December 12, 2022
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