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Such a fragile tin
The consequences of the output of Millhouse from the tin project in Chukotka for the industry is estimated by EastRussia
The Russian tin mining again has no alternative - the self-destruction of the Millhouse project in Chukotka makes Seligdar the only metal producer in the country. The company from 2011 year restores production in the Khabarovsk Territory, the output of which at full capacity will cover the needs of the whole country, but so far the results are modest - 618 tons for 2016 year. The success of plans for tin depends on the political will and price environment, which can be broken by "careless movement" of any of the players, say experts interviewed by EastRussia.
Russian tin mining will have to rely on the old forces. At the beginning of the year, the implementation of the largest tin mining project was disrupted: the Severnoye Tin company controlled by Roman Abramovich's Millhouse, which was going to develop the Pyrkakaya deposit in Chukotka, decided to liquidate. Extraction at the deposit with reserves of 228,5 thousand tons of tin and 23 thousand tons of tungsten was supposed to begin this year, and the projected capacity of the enterprise was 11,1 thousand tons of tin and 814 tons of tungsten per year. However, the owner, who had been looking for $ 2012 million since 300 to develop Pyrkakay, ultimately found it unprofitable. The leading Chinese player in this market, Yunnan Tin Group (YTG), which was invited to enter the project, showed no interest in the current price environment. This means that the only tin producer in Russia is still the Seligdar holding represented by its subsidiary PJSC Russkoye Tin (LLC Pravourmiyskoe and OJSC Tin Ore Company). At the end of last year, the company produced only 618 tons of metal at the Pravourmiyskoye deposit in the Khabarovsk Territory.
World consumption of refined tin, according to the industry association Industrial Technology Research Institute (ITRI), was 2015 thousand tons in 345,7. More than half of the volume provides for the production of solders and alloys, in second place - the production of white tin. In Russia, the picture is reversed: the bulk of tin goes to the production of tin. According to the US Geological Survey (USGS), more than 70% of the world's tin reserves are in China, Indonesia, Peru, Bolivia and Brazil. There are also significant deposits in Malaysia, Australia, Thailand and Russia. China and Indonesia concentrate up to 65% of tin production. At the same time, in 1990, the USSR ranked fourth in the world in the extraction of tin - 19,8 thousand tons.
The Russian industry needs tin, consuming about 6,5-7 thousand tons per year. But 90% is imported. The main reserves of tin in Russia are concentrated in the east of the country. Prior to the beginning of the 90-ies of the last century, the production capacities included nine ore-dressing plants and several tens of mines in Yakutia, the Khabarovsk Territory, Primorye, Transbaikalia, and the Jewish Autonomous Region. However, new economic realities led to the bankruptcy of enterprises. In 1993, production ceased at the Sherlovor GOK (Zabaikalsky Krai), Pevek and Iultinsky GOKs (Chukotsky Autonomous District), Dukat GOKe (Magadan Region). In 2001, the Khrustalnensky GOK (Primorski Krai) died, and in 2005 the Khingansky GOK (Jewish Autonomous Region). In 2009, mining was stopped by the Deputy Mining and Processing Plant (the Republic of Yakutia). The last of the tin-mining enterprises in Russia - Solnechniy and Pravoormiysky ore mining and processing enterprises (Khabarovsk Territory) - continued to produce small quantities, but they also stopped at the beginning of the financial crisis of 2008.
"The situation was affected by the collapse of the Soviet planned economy, which led to a sharp increase in the cost of energy resources, materials and food delivered to remote locations located in remote areas, a strong tax burden, a drop in demand from domestic industry and a reduction in world prices for tin," explains Leonid Khazanov, deputy editor-in-chief of the magazine "Metal supply and sales". In recent years, the situation has recovered slightly, but until the release of Soviet volumes of production, so far it is not. "The establishment of a zero tax rate for extraction of minerals for conditioned tin ores mined in the Far East since the beginning of 2013 year did not help, and its operation should end at the end of 2017," he said.
Now the hopes of Russian tin mining are connected with the Khabarovsk Territory. The authorities of the region and the new owner in the person of OOO Russkie Fonda (he owns the Seligdar holding, which in turn manages the tin cluster in the name of Russky Tin) tried to reanimate Solnechny GOK, which owns the license for the Festival and Perevalnoye deposits, and Pravoormiy - with a license for the same name deposit. In 2011, a concentration plant was modernized at Pravoormysky. In 2013, the restoration of the Solar GOK began, in 2015 - the revival of the Molodezhnaya mine at Festivalnoe.
Last summer, member of the board of directors of PJSC "Seligdar" Konstantin Beitr estimated the amount of investments needed to develop tin mining in the province, to 9,5 billion rubles. According to him, the infrastructure of the updated enterprises will require the greatest investments. The management of "Rusolov" also called 5,3 billion rubles, which are needed for the construction of roads and power lines. At the moment, about 1,5 billion rubles has already been invested in tin projects of the company, and in order to reach the production rate in 5 thousand tons, investments in 7 billion rubles are needed, said the director of the investment bank "Russian Funds" Sergey Ryzhov at the end of 2016.
The design capacity of the Solar Enrichment Plant put into operation at the end of the 2016 year is 1,5 thousand tons of tin in concentrate per year, the projected capacity of the projected plant at the Pravourmiyskoye field is 5 thousand tons per year. But by the time of 2018, Rusolovo plans to produce about 1 thousand tonnes of tin concentrate in the Khabarovsk Territory. Stocks of tin are supposed to ensure the loading of enterprises within 30 years. At the same time, when the maximum indicators are reached, only these two projects are able to cover the needs of Russian industry and even provide a small export, noted in the "Russian Funds".
The Ministry of Natural Resources of the Khabarovsk Territory confirms that the region remains the only one in the country where tin deposits are being developed. Last year, in addition to Pravoormysky, the production of concentrate was resumed at the Solar Concentrating Plant in the village of Gornyi, ore mining at the Festival field was started again, noted in the Ministry of Natural Resources. Positively configured and subsoil users. "We are optimistic about the 2017 year in both gold and tin clusters, in each of which we continue to implement a large investment program aimed at increasing the efficiency and production volumes," said a member of the Board of Directors of Seligdara, commenting on the results of the previous year "Constantine Beyrit.
Pick up the tails
A characteristic feature of Russia's mineral resource base is the very high concentration of forecast resources and tin reserves in regions beyond the Urals, says Leonid Khazanov. Most of the tin is concentrated in the Sikhote-Alin and Yana-Indigir provinces, while the Chukchi, Baikal and Trans-Baikal provinces are subordinate. In addition, tin is found in the bowels of Karelia, but its reserves are extremely low. "Despite the considerable potential, many deposits are characterized by complex mineral composition of ores, low content of tin and often located in hard-to-reach areas, so their development requires considerable financial resources, which is not available to every investor," the expert adds.
According to Dalnedra, in the territory of Yakutia, Primorye and the Khabarovsk Territory and Chukotka there are about 95% of the explored reserves of Russian tin. The largest objects with reserves of more than 100 thousand tons are in Eastern Yakutia, Chukotka and Khabarovsk Territory. The main reserve for the development of the tin mining industry are two relatively large objects: placer Terekhtyakh in the Republic of Sakha (Yakutia) and the indigenous deposit of Pravoormysskoye in the Khabarovsk Territory, as well as several small indigenous and placer deposits in the same regions.
Perspective tin deposits in the region are. In August 2016, Rostekh expressed a desire to take part in the development of the tin deposit on the Tirehtakh Creek in Yakutia. The project was discussed at the meeting of the head of Yakutia Yegor Borisov and the general director of Rostek, Sergei Chemezov. The license for the deposit with reserves of 68,9 thousand tons of tin in category B + С1 was owned by OOO Sakhaolovo. But after his bankruptcy in 2010, the asset was not developed. Since 27 April 2015 year license belongs to OJSC "Yanolovo", "daughter" of JSC "Republican Investment Company" (RIC, structure of the government of Yakutia).
Tirehtyakhu was also interested in the Northern Project Company, a joint venture between RIC and Heilongjiang's main company for economic development and technology. Back in the 2015 year at the first Eastern Economic Forum, the authorities of Yakutia presented a project for developing Tiretyakh. For the withdrawal of the field to the designed capacity of 500 tons per year by 2018 and 3,5 thousand tons of tin by 2022 it was planned to invest 1,22 billion rubles. However, the project has not yet found an investor.
Tin remained in the technogenic deposits that remained after the now closed enterprises. So, early last year, the Governor of the EAO Alexander Levintal announced the launch of tin mining at the tailings of the Khingan deposit in the third quarter of 2017. The project is implemented by Small Hingan Resources Ltd., the company is owned by Khingan Resources Ltd, which is registered in Hong Kong (China). The investor intends to build an enrichment plant for 1 million tons of raw materials per year, or 1,1 thousand tons of tin in concentrate. Construction of the industrial site is scheduled to start in the spring.
“Theoretically, it would be possible to try to extract tin from waste storage facilities, say, the Iultinsky GOK, which during the Soviet era mined tin-tungsten ores and sands and then ceased to exist. However, this will be possible if there is a suitable technology and an acceptable level of world prices for tin, ”adds Leonid Khazanov. According to him, there are technologies for extracting tin from metallurgical waste. So, last year, in the chemical and metallurgical workshop of the Uralelectromed plant in the Sverdlovsk region, the creation of a site for the production of antimony-tin concentrate began (antimony and tin accumulate in copper electrolyte sludge, interfering with the extraction of gold, silver, selenium and tellurium.). But its capacity will be only about 40 tons per year. "Therefore, if there are new projects, then they should be expected again in Yakutia and the Khabarovsk Territory, possibly in the Primorsky Territory, but in the presence of a favorable pricing environment and, perhaps, in the presence of support from the regional authorities," he believes ...
The conjuncture of world prices for tin after a prolonged decline is still showing signs of improvement. If in January 2016 tin cost about $ 14 thousand per ton, then in November it approached $ 22 thousand per ton, without dropping in the remaining weeks of 2016 below $ 20 thousand.In the first two decades of January 2017, prices fluctuated in the range of $ 21,072 - $ 21,175 thousand per ton. “This trend, in principle, gives grounds for a positive forecast about the achievement of tin prices in 2017 at $ 22 thousand and even $ 23-24 thousand per ton. However, one cannot exclude the possibility of both a slowdown in price growth and a reduction in prices, ”says Leonid Khazanov.
According to the expert, various factors affect the dynamics of world prices for tin. First, it is the influence of Indonesia, whose government is taking measures to combat illegal mining. In general, last year, tin supplies from Indonesia to the world market decreased by 9,4%, to 63,56 thousand tons. However, they may continue to rise, thereby putting pressure on world prices. Secondly, the market is influenced by the level of demand for tin in China, which is the largest consumer of non-ferrous metals on the planet. Third, the role of the so-called "third players", for example, supplies from Myanmar, where there is an active mining of tin ores in the Wa region near the border with China, cannot be disregarded.
The area has been under the control of an armed ethnic group calling itself the "Wa State" and linked to the Chinese authorities for more than 25 years. Over the past years, the production of tin ores in the Ba region has increased more than tenfold. At present, Myanmar satisfies about 30% of China's demand for tin, and its share in world metal supplies reaches 10%, explains Leonid Khazanov. “In addition, a number of companies around the world are planning to increase the production of tin raw materials or the production of tin, so by the“ careless movement ”of any of them, the“ fragile rise ”in tin prices can break,” the expert says.