Tin surges as Indonesia clamps down on illegal mines

The tin market is once again bubbling on supply chain trouble, this time in Indonesia, where the government has launched a sweeping clampdown on illegal mining.

- Andy Home

London Metal Exchange (LME) three-month tin has jumped to over $37,500 (1.21 million baht) per metric tonne, the highest level since April when the supply threat was to the Bisie mine in Democratic Republic of Congo.

The latest price kicker was provided by Indonesian President Prabowo Subianto, who said the government aims to close 1,000 illegal mines in the tin-rich islands of Bangka and Belitung.

How much tin such operations produce is impossible to know, and there may be an offset if their closure leads to higher production by the country’s official sector.

But it’s another drop in tin’s cauldron of supply challenges, which is why the price is once again on the boil.

LONG CAMPAIGN

The Indonesian authorities have been struggling to regain control of the country’s tin production sector ever since it was deregulated at the end of the last century.

Much of the country’s tin comes from artisanal and small-scale miners, which makes it difficult to tell who's operating under some form of official licence and who isn’t.

Boundaries have become blurred to such an extent that PT Timah, the country’s top producer, has found itself in the dock for facilitating the black market trade.