In this insight piece we assess how and why tin mine production costs have changed in recent years and how cost trends may affect the medium-term outlook for tin prices. ? Rising oil prices have put upward pressure on costs since mid-2017, particularly for alluvial operations, where fuel represents a high proportion of cost. Tin mines in China are reporting slightly higher costs due to stronger government regulation on environmental and safety issues as well as higher taxes. ? Implementation of optical ore sorting technology is improving the economics of ore processing for hard-rock operations. Tin project developers are also improving project economics by including the technology in mine development plans. ? The marginal cash cost of tin production is 2018 is calculated at ~US$16,500, which we believe represents a strong price floor in the unlikely event of a sharp fall in tin demand. Should tin prices approach this level, significant curtailments to supply would be expected. ? By forward modelling the cost of current operations and potential new sources of tin supply a ~US$25,000 estimate for the tin market equilibrium price in 2022 can be inferred.
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