Tightening tin supply an opportunity Metals X is keen to grab
Metals X has flagged its interest in boosting tin production as global supply tightens and demand from the semiconductor sector increases.
Fitch raises 2026 tin price forecast to US$36,000/t on supply concerns
Metals X flags quadrupling of tin concentrate output to 22,000tpa
Growth plans could require costly acquisitions to secure the right assets
With tin market supply continuing to tighten, the position of Australian producer Metals X will strengthen, particularly when its plan to boost output is taken into account.
Fitch Solutions’ BMI Research recently raised its tin price forecast for 2026 to US$36,000/t up from the previous US$32,000/t due to ongoing supply concerns amidst steady demand from the semiconductor sector.
Tin supply is sourced primarily from Indonesia where output has been impacted by delays in approving annual work permits.
An anticipated restart of output from Myanmar’s Wa State has also yet to occur amidst the country’s ongoing civil war even if the state itself has ostensibly adopted a neutral stance.
BMI also predicts that global use of tin will increase due to its use in solder needed for electronics and in solar panel photovoltaic cells.
Boosting output
This market outlook is massively positive for tin producers such as Metals X (ASX:MLX), which currently outputs some 5000tpa of tin-in-concentrate from its 50% stake in the Renison mine in Tasmania.
With the concentrate having a targeted grade of 57%, this is barely noticeable against the approximately 49,900t of tin that Indonesia produced in 2024.
However, that might be changing with MLX executive director Brett Smith flagging the company’s goal of boosting production to 20,000-22,000tpa.
Investment services firm Ord Minnett said that while achieving this goal was challenging, it was feasible by 2029-30 if the company was willing to take on substantial debt.
The first step will be making another attempt at acquiring a significant stake in Renison joint venture partner Greentech International.
Two previous attempts only netted the company a ~3% stake in the Hong Kong-listed company, which indicates that a higher price will be needed to get Greentech holders to bite.
Ord estimated that buying out the smaller holders could grant MLX 40% of the company, giving it an additional 16% interest in the Renison mine, which would add about 1600tpa to its tin-in-concentrate production.
Its next step would be progressing its Rentails tailings retreatment initiative, which seeks to reprocess Renison tailings with fine grinding to produce copper concentrate and 6000tpa of tin-in-concentrate.
Ord also assumes that a hybrid plant will be built to replace the front end of the existing aged flotation plant at the Renison mine to treat both Rentails and mine material, taking capex up to the upper end of the estimate.
This is expected to be about $332m if MLX succeeds in acquiring 40% of Greentech, adding another 4000tpa to its output.
MLX will also have to acquire the remaining 70% and 80% stake in First Tin and Elementos (ASX:ELT) respectively in order to take it closer to that line.
These acquisitions could cost some $609m to add 7000tpa to production.
One last step
The final step that MLX would need to take is acquiring Stellar Resources (ASX:SRZ) and its Heemskirk tin project, which is just a hop and a skip away from the Renison mine.
Acquiring SRZ, developing an underground mine and building a crushing plant and ore sorter – with resulting material transported to Renison for processing, could cost MLX $100m.
Heemskirk has has indicated and inferred resources of 7.5Mt grading 1.04% tin.
Stellar is carrying out aggressive exploration with drilling underway to grow higher confidence indicated resources for a pre-feasibility study.
Its scoping study demonstrated strong free cash flows at prices of just US$28,000/t ($28/kg) – a level that LME tin has not fallen to since the beginning of 2025.
With Ord expressing its belief that Heemskirk could deliver another 3600tpa of concentrate production to MLX, this actually works out to having the lowest capital intensity of all the company’s options at just $27/kg.
This highlights the low market capitalisation of SRZ and the high value-add in of reprocessing concentrate at Renison.
Alternatively, MLX could work out an agreement to purchase ore from Heemskirk at market-linked prices minus a toll-treatment fee.
At Stockhead, we tell it like it is. While Stellar Resources is a Stockhead advertiser, it did not sponsor this article.
Originally published as Tightening tin supply an opportunity Metals X is keen to grab
