The Case for Tin - An Overlooked Critical Metal for the Technology Revolution

• Tin demand is projected to double over the next 20 years, driven by electronics, AI, solar energy, and electric vehicle growth.
• Supply constraints and limited new mines coming online are expected to increase tin prices.
• The Democratic Republic of Congo (DRC) is a promising jurisdiction for new tin production, with faster timelines from discovery to production than other regions.
• Tin's diverse applications, including both traditional uses and emerging technologies, provide stability and growth potential for the market.
• Public-market investment opportunities in tin are currently limited but may expand as explorers advance projects and attract institutional interest.

As the world rapidly transitions towards advanced technologies, renewable energy, and electrification, certain metals emerge as critical components of this global shift. Among these, tin - a metal often overlooked in discussions of the green energy transition - is poised to play a crucial role in the coming decades. In a recent chat with Rome Resources Executive Chairman Mark Gasson, and CEO Paul Barrett, we examine the investment case for tin, exploring its supply-demand dynamics, technological applications, and potential opportunities for investors seeking exposure to this essential metal.

Critical Metal for Future Technologies

The global tin market, while relatively small compared to other base metals, is experiencing a significant transformation in its supply-demand fundamentals. Paul Barrett provides insight into the current state of the market:

"The tin market is not particularly large. It's 400,000 tons a year, and historically, it's been until the mid-2000s that it was running about 200,000 tons a year. It was stable."

This historical stability, however, is giving way to a period of robust growth. Barrett continues:

"The growth of China in the 2000's bumped that up to 300,000, and since then, it's been starting to grow again."

The International Energy Agency has analysed future tin demand, presenting three scenarios extending to 2040. Mark Gasson notes:

"Even the lowest of the projections calls for a doubling of tin production or demand over the next 20 years."

This projected growth in demand is underpinned by several key factors:

• Electronics and Semiconductors: Tin remains an irreplaceable component in electronics manufacturing, particularly soldering applications. As Barrett explains, "The use of tin for, um, for electronics is there is no replacement, so it is basically the connective tissue of the electronics."
• Artificial Intelligence and Data Centers: The rapid expansion of AI technologies and associated computing infrastructure drives increased demand for tin. Barrett notes, "We are seeing a massive demand now from AI, the massive computing technology, the amount of chips that are required, and therefore, the amount of tin."
• Renewable Energy: The growth of solar energy installations contributes to tin demand. Solar accounts for about 5% of tin usage, but this proportion is expected to increase significantly as solar adoption accelerates globally.
• Electric Vehicles: The transition to electric vehicles boosts tin consumption. According to Barrett, "There's 3 times more tin in an electric vehicle than there is in the conventional one."

On the supply side, the tin market faces constraints that may struggle to keep pace with growing demand. Gasson highlights:

"We're going to require another 50,000 tons of tin annually. Rome Resources will be in production by 2030."

The limited number of new tin projects in development and challenges at existing operations create a potentially tight supply situation. Barrett points out:

"You get problems with supply, such as in Myanmar where they shut down the production. And Indonesia, where there are some problems as well, so those make a significant impact on the market."

Market Dynamics & Price Outlook

The relatively small size of the tin market, coupled with its concentrated supply base, can lead to price volatility when supply disruptions occur. However, this characteristic also presents opportunities for investors, as even modest changes in supply or demand can have outsized effects on tin prices.

The supply-demand imbalance is expected to exert upward pressure on tin prices. Gasson asserts:

"All in all, definitely, the doors are open for a very big drop in the available tin, and that's going to be a long sort of a very strong upward curve."

While short-term price predictions are challenging, the long-term outlook for tin appears robust. Barrett observes:

"I think the risk is low. At the low end, the price going forward is very low. We've got a projection that looks like it will be, regardless of China. The rest of the world is going to be needing the tin as well."

Investment Landscape

For investors seeking exposure to the tin market, options are currently limited but potentially expanding. Most tin production comes from private companies or as a byproduct of other mining operations, making pure-play tin investments scarce in public markets.

Barrett acknowledges this challenge:

"There are 3 or 4 tin-focused explorers in various parts of the world. A few in Cornwall and Western Australia, but the institutions are looking at us."

However, opportunities for investors may increase as exploration companies advance their projects and demonstrate economic viability. Barrett suggests that once companies establish resource numbers and grow their market capitalisations, institutional interest is likely to follow.

Geographical Considerations

The Democratic Republic of Congo (DRC) is emerging as a significant player in the global tin market. Despite historical perceptions of political risk, the DRC offers several advantages for tin production:

• High-Grade Deposits: The DRC hosts some of the highest-grade tin deposits globally. Barrett notes, "We've got a good play here in terms of grade, which helps a lot in terms of profitability."
• Faster Development Timelines: Compared to other jurisdictions, the DRC offers the potential for quicker project development. Gasson explains, "From discovery to feasibility study, that was probably around 2-3 years, and then another two years into development and production in six years."
• Established Mining Code: Contrary to some perceptions, the DRC's mining regulations provide a stable framework for operators. Gasson states, "I would even go as far as saying it's safer to work in Congo when it comes to mining code as opposed to many other countries in Africa."
• Economic Impact: Successful mining projects can bring significant economic benefits to the region. Gasson cites an example: "Today, you have a whole town and employment. It's probably one of the biggest, most developed cities in Congo, and that's simply because of the success of the mine."

Technological Applications & Future Demand

Tin's diverse range of applications provides stability and growth potential for the market. Traditional uses, such as tinplate for food packaging, continue to provide a demand baseline. However, tin's future growth lies in emerging technologies. Solder for electronics remains the largest single tin-use, accounting for approximately 50% of global consumption. The growth of artificial intelligence and advanced computing is expected to drive significant new demand for tin. The expansion of data centers and the increasing complexity of semiconductor devices contribute to this trend.

Tin plays a crucial role in solar panel manufacturing in the renewable energy sector. While currently a relatively small portion of overall tin demand, the rapid growth of solar installations globally is projected to substantially increase tin consumption in this area. The electric vehicle revolution also bodes well for tin demand. The increased electronics content in electric vehicles, combined with their use of lead-acid batteries (which contain tin), means that each electric vehicle requires significantly more tin than a conventional automobile.

Challenges & Risks

While the outlook for tin appears promising, investors should be aware of potential challenges and risks:

• Market Size and Liquidity: The relatively small size of the tin market can lead to price volatility and potential liquidity issues for large investors.
• Geopolitical Risks: A significant portion of global tin supply comes from regions that may be subject to political instability or changing regulations.
• Technological Substitution: While currently limited, the potential for technological advances to reduce tin usage or find substitutes in specific applications cannot be ruled out.
• Economic Cycles: Demand for tin, particularly in consumer electronics and automotive applications, can be sensitive to broader economic conditions.
• Project Development Risks: For investors in tin exploration and development companies, the usual risks of bringing new mining projects into production apply.

The global transition to advanced technologies, renewable energy, and electrification creates a compelling case for tin as an investment opportunity. With demand projected to outpace supply in the coming years, and limited new production coming online, the fundamentals of the tin market appear robust. For investors, while current options for direct tin exposure may be limited, the evolving landscape suggests that opportunities are likely to expand. As exploration companies advance their projects and attract institutional interest, the public market for tin investments may grow.

Tin's critical role in technologies driving the green energy transition and the digital revolution positions it as a metal of increasing strategic importance. While not without risks, the long-term outlook for tin demand and pricing appears favourable, making it a metal worth watching for investors seeking exposure to the materials powering our technological future.

The Investment Thesis for Tin

• Strong Demand Growth: Projected doubling of tin demand over the next 20 years. Driven by electronics, AI, renewable energy, and electric vehicles, and essential and irreplaceable in many applications
• Supply Constraints: Limited new mines coming online, challenges at existing operations, and the potential for supply deficits in the medium-term
• Price Outlook: Upward pressure on prices is expected due to supply-demand imbalance, small market size can lead to significant price movements
• Strategic Importance: Critical metal for the green energy transition and digital revolution and increasing recognition of tin's importance in advanced technologies
• Investment Opportunities: Currently limited public market options and potential for expansion as explorers advance projects by mining companies or specialized explorers
• Geographical Considerations: DRC is emerging as a significant player with high-grade deposits with faster development timelines in certain jurisdictions
• Risk Factors: Market size and potential volatility, geopolitical risks in key producing regions and project development risks for new mines

Tin stands at the intersection of traditional industrial uses and cutting-edge technologies, positioning it as a critical metal for the 21st century. The projected growth in demand, driven by the expansion of electronics, artificial intelligence, renewable energy, and electric vehicles, presents a compelling long-term investment thesis. However, the limited options for direct tin exposure in public markets mean investors may need to be creative in gaining exposure, potentially through diversified mining companies or by closely following the progress of advanced exploration projects. As with any commodity investment, careful consideration of market dynamics, geopolitical factors, and individual project risks is essential. The evolving landscape of tin production and consumption suggests that investment opportunities in this space may expand in the coming years, making it a sector worth monitoring for investors seeking exposure to the materials underpinning the technological revolution.