Miners struggle to fund tin projects, deeper shortages loom

Tue Dec 11, 2012 7:38am EST
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* Many banks shun market after cartel collapse

* Firms look at options such as end-user finance

* Deficit due to deepen, threatens spike in price

* Soaring prices could spur substitution

By Eric Onstad

LONDON, Dec 11 (Reuters) - Companies seeking to build new tin mines are struggling to finance the projects, which could deepen shortages in a market that is already in deficit and exacerbate price moves that are already volatile.

Financing any new mine has become difficult following the global financial crisis, but the situation in the tin sector is even worse. Many banks shun lending to tin projects due to its thin market after the collapse of a cartel in the 1980s.

Prices may have to double to attract enough investment in new mines. But if the price soars out of control, consumers could be forced to find substitutes, leading to a boom-bust situation.

Companies are looking at a range of creative options to fund the next generation of mines to extract the metal, which is mainly used for solder in the electronics industry and in coatings for cans and other packaging.   Continued...