Tin Miners of the Congo

Alphamin produces a vital metal from one of the mining world’s toughest operating environments

By Gavin du Venage, African Editor

Tin is about as humble a mineral as one can get, but in recent years has also become one of the hottest items in global commodity markets. Alphamin Resources, a joint Toronto and Johannesburg listed miner, operates what it calls the world’s highest grade tin producer in the Democratic Republic of Congo. Located in the far east of the country, the Bisie deposit is four times richer than any other rival tin producer. 

“We have a vision of becoming one of the largest, long life tin producers in the world,” Alphamin CEO Maritz Smith said. “We may see a second, third and even fourth mine within our license area.” 

Alphamin began developing the deposit in 2013, when the site was deep in the jungle and only accessible by helicopter. By 2020, it began production, having constructed road access, an air strip and processing plant.  

Alphamin’s mineral of choice, tin, was a fortuitus decision. Tin is used in the making of solder, the “glue” that attaches and binds components on circuit boards and other electrical devices. It has largely supplanted lead, which has been phased out because of health risks it presents. 

“Tin is ranked top of the list of the metal most likely to be impacted by new technologies,” Smith said. “Demand is growing steadily at 5% per year.” 

Without tin, it’s unlikely the advances in robotics will be possible. It is also used as an alloy in niobium super magnets, which are found in wind turbines and some electric car models. 

With the world turning ever more to advanced technologies, ranging from computers to renewable energy to battery-powered cars, demand for tin has soared. As has its price, which has more than doubled over the past 12 months, from $18,000 per metric ton (mt) in January 2020 to $42,000/mt in January this year.

Alphamin’s Mpama North mine sitting on top of the Bisie deposit is now fully operational. The company has five further exploration licenses and plans to use cashflow from current production to fund another mining complex, Mpama South. The company said all-in sustaining costs are between $10,000 and $12,000/mt, which puts it within the lowest quartile of the global cost curve. These will be lowered further as the tin concentrate production process is further refined and more volume is added. 

In January, Alphamin said its latest quarterly production of 3,114 mt was 10% above the previous quarter. Contained tin sales of 3,056 mt increased 13% from the prior quarter. 

Exploration is well under way ahead of developing Mpama South. Already, 89 drill holes have been completed, giving the company a clear picture of the underlying ore body. Smith said Alphamin is likely to continue finding new deposits in the future.

“We have a life of mine to 2028, but we are exploring at depth and are confident our operations will continue for decades to come,” Smith said.  

Improved underground mining practices relating to stope planning, delineation and blasting resulted in better grade control with an average tin grade of 3.8% processed during the five months ended December 2021. Waste development is now well ahead of current mining areas providing flexibility in blending high- and low-grade areas for a more consistent grade profile. 

With regards to social responsibility, Alphamin took on one of the mining world’s toughest operating environments. The North Kivu province is notorious for conflict minerals, and the area around the mine was no exception. Up to 16,000 people are estimated to have lived on and around the tin deposits, supporting 2,000 artisanal miners. 

Illicit tin, like diamonds, cobalt and other resources helped fuel ongoing conflict in the region. However, the Dodd-Frank Act enacted in the U.S. in 2010 made it increasingly difficult for rogue brokers to sell conflict minerals into global markets.

This law required publicly listed firms to confirm that minerals sourced in the DRC — including tin — were from reputable suppliers.  

By the time Alphamin began its initial work on the project in 2013, most of the artisanal miners had left, and those who remained had sunk into desperate poverty. Consequently, the mine has injected new life into a moribund community. At the same time, the mine has also brought infrastructure such as a road, mobile phone accessibility and of course, jobs.

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South Africa Could Fill Russian Supply Gap

By Gavin du Venage, African Editor

A scramble to procure energy supplies in Europe and elsewhere may provide an unexpected boost to South Africa’s coal industry. The war between Russia and Ukraine has effectively shut down exports from the region, and European utilities are now looking for alternative suppliers. Currently, Russia supplies around 70% of European coal demand.

Russian energy commodities such as oil, coal and gas are now being shunned, leaving consumer nations looking for alternatives. Coal flows from South Africa, the U.S., and Colombia to Europe have increased over the past few weeks, according to Bloomberg.

Bulk shipping carriers that would normally ply the route between Russia and Europe have diverted south. At least two have called in at Richards Bay Coal Terminal on the East Coast of South Africa. Usually, South Africa exports around 60-70 million metric tons per year (mt/y) of coal, but only 4% of it went toward Europe. By far the biggest customer is Asia, which takes 86% of South Africa’s shipments.

“The Ukraine crisis saw great demand in Europe for alternative sources of energy, and coal has become quite a favored item,” said Mxolisi Mgojo, CEO of Exxaro Resources, one of the country’s largest exporters. “There are still many logistical shocks in the system to come, and they will impact the market.”

Among potential buyers are Italy, whose prime minister suggested reviving coal-fired power plants because of fears of a breakdown in natural gas supplies from Russia. Germany too has said it might extend the lifespan of coal plants that were due to close by 2030.

As with other coal producing countries, South Africa is under pressure from environmentalists to reduce both the production and use of the coal, which supplies 90% of the country’s energy mix. However, South Africa has committed to reduce coal power electricity generation to 40% by 2030. A group of industrialized nations including the USA, recently pledged a $8.5 billion loan to retire coal-fired power plants.

Coal does still play an important role in the country’s economic life, and will for some time to come. State estimates are that coal reserves are 639 million mt, and mining coal is now the single-largest employer of more than 400,000 people.

As a result, leading political figures are split over the issue — whether to bow to environmental concerns or to preserve jobs and export earnings. A rear-guard fight against shuttering plants and mines is being undertaken by the current Mining Minister Gwede Mantashe, who wants to see new projects built.  “Lobbyist of all kinds, with unspecified incentives, seek to entice our country to jettison our present energy sources overnight,” Mantashe said in February. “Doing so is detrimental to our economy, our industrialization and our global competitiveness.”

As a result, new mines are still being announced. In February, the government of Limpopo province said it had authorized a China-backed proposal to spend more than $10 billion building a 4,600-megawatt coal-fired power plant. Another, planned in Mpumalanga, the eastern province coal belt is currently locked in legal action against environmentalists, but should commence operations in a year or so. With some coals now trading above $400/mt, the case for new projects is likely to become stronger.

Rory Simington, a coal analyst with Wood Mackenzie, said the price is indicative of the very tight global supply of thermal coal. “But even if there is only marginal extra demand for Australian or South African or Colombian coal, because the market was already so tight, any extra incremental demand could support high prices for quite some time,” Simington said.