Tin prices jump after Myanmar’s Wa militia announces plan to suspend mining

MYANMAR’S ethnic minority Wa militia will suspend all work at mines in areas it controls from August, an information official from the militia force, the United Wa State Army (UWSA), said on Monday (Apr 17), driving up tin prices about 12 per cent across markets.

Most of Myanmar’s tin concentrate comes from mines in the Wa state areas, according to the International Tin Association.

Tin prices surged 12 per cent in neighbouring China, the world’s biggest refined tin producer, to their highest in nearly two months after news of the ban. Myanmar accounted for 77 per cent of China’s tin ore imports in 2022.

“From Aug 1, 2023, work at mines, including exploration, mining and processing will be suspended,” Myanmar’s Wa State Central Economic Planning Committee said in a document issued on April 15 and seen by Reuters.

The move is to protect the remaining mining resources, while companies whose contracts are still ongoing can still work on exploration for another three months, the document said.

Nyi Rang, an official from the external relations department of the UWSA confirmed the authenticity of the document.

The UWSA controls significant stretches of territory in northeastern Myanmar’s Shan State, mostly along the border with China but also near the Thai border.

On the Shanghai Futures Exchange (SHFE), the most-traded May refined tin contract jumped 12 per cent to US$31,825.26 a tonne, the highest since Feb 23 and the biggest daily gain since March last year.

On the London Metal Exchange, benchmark three-month refined tin jumped as much as 11.5 per cent to US$27,705 a tonne by 0828 GMT, its highest since Feb 21.

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“The Wa state is the largest tin mine producing area in Myanmar, and most of its output is sent to China. The ban on mining will undoubtedly make the already tight supply of tin mines even tighter”, broker Xinhu Futures was quoted by state-run Shanghai Securities News as saying.

However, it is unclear whether the ban will be implemented as “this is not the first time such notifications have been made” and “the main functional departments of Wa state have not received such specific notifications”, Xinhu was quoted as saying, citing sources.

Shares of Yunnan Tin, the world’s biggest refined tin producer in 2022, jumped 10 per cent to a nine-month high of 16.85 yuan (S$3.26).

“The supposed announcement context seems to be the need to properly formalise and structure the Wa State mining industry. Wa represents about 70 per cent of Myanmar production,” said Jeremy Pearce of the International Tin Association.

Pearce added that rising refined tin inventories in China should provide some buffer. SHFE tin stockpiles hit 9,211 tonnes on April 7, the highest since November 2017, before easing slightly to 9,056 tonnes by the end of last week.

Tin is mainly used in the electronics and semiconductors sectors. REUTERS