Hello and welcome to today's battery show. We're going to focus on tin today. We're going to show you the supply demand fundamentals, who are the players in the market, and indeed how can we invest into this little known commodity. Joined today by Rome Resources C-Suite, we've got Paul Barrett and Marc Garcon.
Guys, how are you? Good to see you, Matthew. Paul, why don't you introduce yourself and then Marc do the same, if you don't mind.
So I'm... Paul Barrett, the CEO of Rome Resources. I'm a geologist by trade, so much happier underground than overground, but Mark's the same. Mark?
Hi, I'm the chairman of Rome and very, very familiar with the area that you're working in. I was involved with the initiation of Alphamon's exploration programs, and today that's one of the top companies, 1.4 billion market cap. We have the licenses to the north, so very familiar with the geology and mineralization. So we hope to do the same again.
Okay. And a little thing. I will talk to you a little bit about doing business in the DRC a little bit later, Mark, if I may. But first, let's start with the supply-demand fundamentals.
It's important to know who's who, where does this come from, where does the demand come from. And quite frankly, because there's little information, there's a lot of big private tin companies, not a lot of... public market stuff the knowledge is a bit scant so paul what do we need to know on that front well firstly the tin market is not particularly large uh that actually in a way i'll explain later but that that helps us that works in our favor but it's 400 000 tons a year and historically it's been until the mid 2000s it was running about 200 000 tons a year it was kind of stable um the the growth of china in in the 2000s um bumped that up to 300 000 and since then it's been it's been starting to grow again so there's there's a kind of in a way a second phase of um need for tin the the expansion in china was was predominantly um the growth of china and electronics but the use of tin for um for electronics is there is no replacement so it is it is basically the connective tissue of the electronics and so Consumer electronics is kind of flatlining, but then we are seeing massive demand now from both AI, so the massive computing technology, and amounts of chips that are required, and therefore the amount of tin, and also in solar, the increase of solar energy, and also in electric vehicles in terms of the battery technology. Also, there's three times more tin in an electric vehicle than there is in a conventional one.
There's a lot of positive movement in terms of demand for tin going forward. And because it's a relatively small market and a relatively small amount of suppliers, that when you get problems with supply, such as in Myanmar, where they shut down the production, in Indonesia, where there's some problems as well, those make a significant impact to the market. So you cannot easily replace.
the production overnight of tin. It's not like some of the other commodities. So I think the increasing demand from the electronics industry and the limited amount of supply that can make up that gap is what's giving us our opportunity. Right.
And you've talked about some of the suppliers there. China's a huge producer, but also a consumer of it. We've got Indonesia, Peru, Bolivia, Malaysia, Singapore. In fact, as a child, I remember standing on a tin dredger in Singapore.
There's not a lot of information coming out in the market. It's hard for us public market investors to really truly understand the kind of supply gap, if there is one, and what this thematic looks like going forward. Is it a relatively stable market, despite its size? Well, I think it's stable in terms of the use of tin and in terms of the overall...
day-to-day usage of tin in industry. The International Energy Agency did some numbers and there are three scenarios going forward to say to 2040. The three scenarios in terms of whether how far everybody goes in terms of actually undertaking the Paris Accord agreement deadlines and All of them, even the lowest of the projections, calls for a doubling of tin production or tin demand over the next 20 years. So, you know, it is relatively, it's a bit like, in a way, it's a bit like the phosphate market.
There are a limited number of producers, as you said, a lot of private companies. And so it... Information is relatively light, but here we have, with our project, we're hopefully at the top end of the grade.
There's a lot of the bulk production in China and Australia, which is very, very low grade, 0.1%, 0.2%, that kind of thing. AlphaMin next door to us is running at its highest grade in the world in terms of producing mines, about 4%. We've got a really, really good play here in terms of grade, which helps a lot, obviously, in terms of profitability.
Right. And obviously, grade and scale is the thing that you're working towards demonstrating as well. And I guess giving some clues about what that margin looks like eventually, but that certainly helps with grade. If I look at China, 30% of the world's production, 47% of the world's consumption, they obviously still have a big influence in terms of price in the market.
So just in terms of those kind of fluctuation sensitivities around the kind of ex-China supply into that demand, can we take comfort that there's enough ex-China supply out there that the markets are going to look, I guess, more predictable going forward? Well, I don't really know if they're going to be predictable. I think there will be upward pressure on the price because of demand elsewhere.
Yeah. I don't think it's a I think the risk of the low you know, a low end for the price going forward is very low. I think we've got a projection here that looks like it's going to be, regardless of China, the rest of the world, it's going to be needing the tin as well. Right.
Okay. Sorry, Matthew, if I can interrupt for a sec. Basically, the International Tin Association, they're predicting that for the next we're going to be requiring another 50,000 tons of tin annually.
So if you look at our current position, assuming we're successful, we'll be in production by 2030. I mean, that means that there has to be another 300,000 tons of tin that has to be added to the whole equation. And with the current lack of mines coming on stream, new mines, I'm... and, you know, and all the sort of the other, the producer mines under strain as well. This has to affect the tin price in a very positive way.
And we might be, you know, we'll benefit the most from it at that point in time, 2030. You make an interesting point there, Mark, because we were talking about copper yesterday. And, you know, I think pre-1990, the average time from discovery through to production was 12 and a half years. It's now up to 18 years from discovery to production, right?
Tim, you're suggesting that, well, why are you able to get into production so quickly? What's the process? Oh, it's been done before, next door. Yeah, from discovery to sort of feasibility study, that was probably around two, three years. And then another two years into development and, yeah.
production within six years i mean that's uh yeah it's been done and there's no reason why we can't do the same thing in next door right interesting interesting so okay so we kind of get a sense of who some of the players are how they kind of feed into to that in terms of public market i say not too many tin plays um available for folks um out out there um how how do you view the tin market in relation to some of the other back battery metals it sounds like a much simpler to understand uh quicker to revenue so far seems to be the main benefits what else is there about the tin market that sort of appeals to you guys well i think that the um the fact that it's it's got varied uses it's not you know you're not relying on one particular sector to to give you that demand curve um tin obviously has historical usage and there is a background as i said of about 200 100 150 000 tons a year of use for what you might say old technologies that's still continuing So it's not as though TIN is reliant on the development of AI, etc., etc., to be a worthwhile commodity, a valuable commodity. But we are hoping that this demand in advanced electronics will really push it over the edge in terms of demand. Right. And I'm going to just stick with the supply stuff for a little bit because I want to really milk this conversation because I don't know.
I'm starting from a very low base, okay? When it comes to public markets, I think a lot of the explore codes have been sort of struggling the last three, four years because of lack of access to capital or at least cheap capital. With TIN being sort of, I guess, a small, as I keep calling it, esoteric type commodity, has there been interest from institutional?
Do the institutional investors, funders, debt providers, do they understand? the space well enough to help companies like yourself in the market? Well, I'm not sure that the market has been tested enough in that respect. I mean, as you say, there are three or four maybe 10 focused explorers in various parts of the world, quite a few in Cornwall and Western Australia. But I think the institutions would be looking at us.
I'm not sure that our 14 million market cap is ready yet to get large institutional investors. Once we get our holes drilled and our resource numbers and our market cap up, I think then we will start to come on the radar of the institutionals. But the thing is, I know, as you mentioned, Tin is kind of, well, esoteric, but it's... kind of is just a specialist commodity. I mean, thinking esoteric, I'm thinking helium here.
I mean, there's a lot of hype on helium. We'll see where that goes. But tin is a really fantastic commodity that's used everywhere and is increasing.
So I don't see it as esoteric. I just think it is a bit niche. Okay, okay.
Well, that's a fair comment on the wording. Let us... move forward gentlemen um i want to talk about uh and i refer people to the slide that i've just pulled up um here a global tin use by application and top 10 uh 10 positions now we sort of talked a little bit about this um mark what can you what can you tell us okay so basically um it's pretty obvious that the the biggest use of tin is solder and um and and you know i believe that the the true value of of tin has not been understood. If you take solder alone, you have every iPad, every smartphone, every computer, everything contains tin.
Everything electronic contains tin. And 50%, I mean, there you're looking at on last year's sort of production, you probably have, you know, it's around 160,000 tons of tin alone just on the solder side. And as Paul says, the other...
you know, the sort of use in chemicals, tint plate, and the rest of them, that stays the same. So that's not going to disappear. So when you have all these new applications coming in, by the time we're ready for production, as I mentioned, around 2030, there'll be a 10% increase in the requirements. What's it?
So basically, there's definitely going to be a lot more use requirements. And I just can't see, you know, with the current scenario, no new mines coming on or very few. With the current tin prices, there are definitely some sort of mothballed mines that would come on stream as well.
But, and... but that's not going to make up for the deficit. So, yeah.
And then if you look at the top tin producers, as Paul has already mentioned, you've got China. China will be under pressure, especially as the supply from Myanmar will be reduced substantially, and that puts pressure on their own uses. Indonesia.
They bring in export restrictions and you'll probably find half of that will be available for export. I think the only positive one is Congo. And you have alpha men which are beefing up to potentially 9% of the world's supply. And that will be in the very near future.
And that leaves the door open for us to sort of increase that. That's probably one of the few areas where we'll be able to see a substantial increase in world production. Peru.
San Rafael, they already understraid as well because they are starting to investigate the potential of sourcing tin from the waste dumps to keep up with their production. And that could affect roughly 9% of their supply. So all in all, there's definitely the doors open for a very... you know, a big sort of drop in the available ton. And then the use, that's going to be a long, sort of a very strong upward curve.
And as I mentioned previously, 50,000 tons additional every year. I don't see where that's going to come from. Well, it's going to need to be funded, and maybe that's a conversation for later. But you hit upon a point that I referenced at the beginning, I want to talk about, which is the DRC, right?
I think there's a preconception from long... legacy projects and images around the world from you know 20 years ago so start from people's minds with the mining of cobalt uh in country child labor etc and it's still there i spent a fund manager you know this week and you know that that sort of intimation was was there for me talks to me about two things talking about the ability to do business in country without being affected by well I'm going to use the word corruption and et cetera, because that's the perception out there by some. Okay.
I know different, but I want you to explain to me and the folks listening and watching this why it's different. So that's the ability to do business in country and then to do business ethically in country. Mark. Okay.
Sure. Okay. So basically, as I said, you know, we've been in the Congo for 23 years and the whole time has been with public listed companies. And there is zero scope for corruption.
Everything has to be done all above board and no sort of bribery is tolerated. And the fact that we have to stick to those guidelines or work according to those sort of principles, everything takes a lot longer, but it gets done. The job gets done.
And in the... And you'll note that in the Congo itself, there are very few junior explorers or other serious mining companies. It's predominantly dominated by China in the Congo itself.
And we are one of the few companies that have been there and managed to navigate all these obstacles. So on that side, we, you know, there's... We clean on that front and that'll never change. And as far as operating in the Congo, there's no scope for child labor or any of these other things. We have to work strictly according to Western standards.
And Elfman, again, is a good example next door. It's a proper commercial mine and it's broke. brought stability to the whole area.
And so, yeah, it's very, all the negative press that you might see is totally substantiated because there is no scope for us to work outside the guidelines of Western procedures. Right, okay. And obviously, thanks for dealing with those in terms of doing business and doing business ethically. In terms of the, I guess, the mining code in-country, banks will want, if you get to the point where you're in debt balance, they'll want to be able to perfect security.
Is the mining code there something which is comparable to working in other countries, whether it be in Africa or elsewhere in the world? I would even go as far as saying it's safer to work in Congo when it comes to mining code, as opposed to a lot of other countries, especially in Africa. That is one area where they are very strict. As long as you meet your commitments, pay all your fees.
And that's pretty much all it is really. Pay your fees and get, you know, and do all the correct reporting. um you you will not lose your license um and uh and and it's also um with our experience in the conga it's all about keeping good relations with the authorities and that that's that's sort of key or one of our one of our successes i believe um is that you have to yeah and i want to be clear here because i think you know i certainly want my time working in africa you know 25 countries in africa what we saw was a lot of companies sitting on assets i think um paul's indicated already that you want to you want to be kind of quick to market get to production uh quickly um so there's no sitting around or waiting but what's what's your take on various african drc and other african governments uh starting to get a little bit more um i guess control back from miners and maybe making sure miners are behaving in a way that's reasonable do you agree with that no No, I think from my experience anyway, as long as you are doing what you set out to do and they are receiving their royalties and payments, I mean, they're all small challenges, but you're not going to lose the license or anything like that. As long as you are doing everything according to the regulations. I think that is probably our least concerns in Congo.
Yeah, you've also got to kind of bear in mind that countries like DLC, a lot of countries, not just in Africa, but around the world, are relying on resource for their main income. And, for example, Guyana and now Namibia, places like that, they will see that if they help the people get to production and pick... keep producing then the country will benefit enormously and i think that's definitely the case in the congo yeah i'll give an example in congo um one of our first um sort of projects was uh was motor gold which was uh which is kibali gold mine and where we discovered 20 million ounces and uh today so so basically uh rand gold bought out um motor for for 500 million and they've subsequently been taken over by Barrick.
And today, you have a whole town. And employment, it's probably one of the biggest, one of the most developed cities in Congo. And that's simply because of the success of the mine.
And so mining really brings stability to the country. Very little comes from the actual government itself. And it puts quite a bit of stress on the...
on the mining companies themselves okay interesting okay i think i'm i'm i know i kind of skewed that conversation over the drc but i get back to the macro here um i'm going to pull up a slide um which talks about tin price again paul you've touched upon this and when i talk about you know sustained pricing environment and what you know the forecast may may may look like um i mean paul do you want to talk to this slide yes so um the pricing Future pricing. So interestingly, over the past six months to a year, you've seen copper and nickel and zinc prices rise, but tin has kind of detached slightly from that and has risen more as cobalt has stayed in the doldrums. So it's interesting that the market is seeing that tin is potentially underpriced at the moment. And it's always good to have that overpressure. I spiky price and i think that um you know it's difficult it's a bit like the oil price you know it's difficult to predict where the price is going to be in 10 years time or six years time when you start production for example but i think all the all the indicators here are that um the use of tin in these advanced electronics and and technology is going to really keep the price moving upwards and um Then that graph at the bottom is interesting in so much as it's an indication of the use of the tin and the production and the shortfall.
So the graph, it's not that easy to read, but basically it's in three parts. So the first two columns, the first column, the green, all the columns that have the green are basically the usage of tin. And so in 2019, it was about 50-50 traditional and It's cool. They're calling it a green transition.
So I mean, I lump everything from solar and new electricity to that. It's 50-50. And the orange...
on the right is tiny and that's the shortfall the deficit in production come to 2025 prediction the traditional kind of stays the same and and the the new technology the green transition increases and you develop a deficit you develop a shortfall even in 2025 by this by this research this is roskill research uh by 2030 it's looking even even starker in terms of a deficit So I think that points towards the fact that even from 2025 onwards, we're going to be seeing tin deficit. As you mentioned, you know, if it takes in a lot of jurisdictions 18 years or whatever to come to production, there's no quick fix. The quickest fix is opening up mines in DLC.
But that's obviously where we come from. There might be a bit of bias there, but I'll take it. And potentially a lot of stations with a similar outlook to bring things on quickly, not Utah. Yeah, I guess the thing to point out here, and with all commodities, you know, grade is usually king, but you've still got to be able to demonstrate that scale. I think the interesting thing that you said to me today really is the kind of speed to which you can get to production.
And, you know, that's a very interesting conversation because to me as an investor, I'm thinking, well, Hopefully, not another 15 years of dilution where you're having to raise money to keep going through the process. And therefore, my dollar is worth more. So that's intriguing.
Right. Okay. So I think the slide, which I kind of want to move on to in the short term, I can touch on some of the things that you said earlier, which is around some of these new use cases for it. Like all.
metals want to talk about the green revolution because that's where all the money's going um that's where you know governments are pushing us and businesses too um we've seen green coal yes we have folks green coal green iron ore and and green greenification of everything but in in this case the historic use cases can definitely tick tick that box and i guess the the use cases going forward with things such as solar and um AI data centers, etc. Take that indeed. So again, Paul, what are we looking at here with these diagrams? Well, the left-hand diagram is basically simply solar.
And as we said, solar at the moment accounts for roughly 5% of tin usage. So it's relatively minor. But with the growth of that and the strong use of tin, in solar panels and solar cells, that's only going to really blow up. So this is starting to show from 2024 onwards, basically a change in the landscape in terms of solar energy. Therefore, the percentage of use of tin by solar in the overall demand is going to rapidly increase.
I don't think there's any... way that's not going to happen um to be honest uh and so you've got the solar will will take up a lot of of um demand or will increase a lot of demand and generate a lot of demand is the word i'm looking for uh and also artificial intelligence will do the same in terms of the amount of chips that are required to do this um and not only that but the amount of energy that's required to to run all of this it all points to everything Everything in the electronic world uses tin, and therefore as this moves along, again, it's kind of a positive future for tin itself. Right, and can I say again, just again, understanding how the market works for companies like yourself. I think with battery metals more broadly, that's been, you know, companies will engage with metal traders. The metal's been always been there, and it's all good.
There's a very simple route to market. We've seen more recently with the ad... advent of OEMs is that car manufacturers, battery manufacturers are moving upstream and securing supply because they're fearful that they may not be able to get it when they need it, given the forward-looking forecasts on demand.
With tin being a small space as it is, do you think that the buying behaviors, the buying structures will have to change and adapt if people are to secure? the tin that they need how do you view that i mean either of you come up that good question i have to think about that i think it's an interesting one isn't it because like normally you'd kind of you you'd sell your your concentrate and you know and then that becomes someone else's problem but in small markets we've seen it with um you know we you know despite some uh nickel and copper being a sort of abundant asset where you've seen a And lithium, we'll see whether it's spiked recently. Wholesale change in the way that people approach accessing the commodity. And traders are having to find new ways of working, as industry says. People like Mitsubishi, Mitsui, all the Koreans, all the Japanese, getting into North American markets and securing future supply much earlier in the food chain, I suspect.
It could be similar for you guys, but I don't know. No, I know. I mean, I think it's happened more in the copper, nickel space to date.
But for tin, I think, yes, that could be quite a good way of marketing your tin. I mean, for example, NVIDIA and companies like that would maybe require kind of offtake agreement or something like that. So that adds another potential. a route for financing, of course.
Well, absolutely. And I think that's pretty much where I was going. Because again, it's a reflection of how some of these companies have been funded in terms of not just equity investments, but also at asset level and debt or bridging loans being made available for companies to advance projects through to a natural conclusion.
And I guess near-term producers will be the beneficiaries of that. Anyway, that's a great question for us to go and ponder and research. So that's a goodie. Guys, I mean, I really appreciate it. It's going to give us a nice sort of overview and touch upon a few things that people can go away and think about.
And maybe, as I say, do a bit more research. We certainly will be. We like what you're doing. Like to speak to the market. Obviously love the grade.
Next question, if you guys are going out and demonstrating that scale. So we look forward to following you. It's a great interest. Appreciate your time today. Thank you.
Thank you, man. Thank you so much. My pleasure. Yeah.