Dodd-Frank compliance

The tin industry, along with the three other so-called conflict minerals (gold, tantalum and tungsten) sectors have actively developed initiatives to prevent conflict minerals from the Great Lakes Region entering the supply chain.

Alphamin’s compliance to all the Dodd-Frank regulations, ensures that Alphamin tin will only be able to be sold through legitimate channels, thus rendering stolen or misappropriated tin worth much less in the open market.

These initiatives have been developed in tandem with:

  • US legislation under the Dodd-Frank Act, Section 1502.
  • The Organisation for Economic Co-operation and Development (OECD) Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
  • The International Conference for the Great Lakes Region and its Regional Certification Mechanism, which includes the DRC, Rwanda and 11 other Central African states.
  • Congolese and Rwandan legal reforms to mandate conflict-free certification and traceability so that tin and other conflict-mineral end-users elsewhere in the world can demonstrate due diligence related to conflict-financing linkages.
  • The GDRC and DRC donor pilot projects implementing conflict-free certification and traceability systems to assure chain of custody over exports from the artisanal mine site to the smelter or refiner.

Through these initiatives, global tin and other conflict-mineral global supply chains have recognised the issue of illegal mining and the ability of criminal public security and armed groups to source financing from the production and trade of conflict minerals in the Great Lakes region. Within the industry, burden of proof falls primarily on supply chain operators and exporters to prove the direct source of the cassiterite produced for smelting. Material which is not traceable to its direct source is significantly discounted in the open market, since global smelters are under increasing pressure to conduct due diligence to assure certification and chain of custody. The European Union is currently finalising legislation that will mandate similar levels of due diligence of tin and other conflict minerals throughout the world, not just in the Central African Great Lakes (the current focus of US legislation).

The complexities of certifying the source of cassiterite make the product less appealing to armed groups and so reduces the risk of an attack on the mine or transporters with the intention to steal the final product. In addition, experience of industrial mines in Katanga and the eastern DRC over the last decade indicate a positive ripple effect of improved security and human rights around industrial mine sites, which dissuades criminal organisations and armed groups from focusing on industrial operations.

History and conflict resources

Up to 16 000 artisanal miners exploited Bisie surface deposits between 2002 and 2012. Their illicit production, which at one point represented about 4% of global tin supply, helped finance the conflict in the DRC and the Great Lakes region. As a result of improved governance, global supply chain monitoring (disclosure of conflict minerals), the award by the GDRC of a legal industrial production permit to Alphamin, the opening up of certified conflict-free supply chains nearby, and the depletion of accessible surface minerals by the artisanal miners, artisanal production has decreased dramatically since 2012. Bisie’s tin concentrate will be certified as conflict-free tin. In the light of falling supply and the implications of US and European laws and regulations aimed at reducing the use of minerals from conflict-affected regions, we know ABM’s conflict-free tin concentrate and social initiatives should be of interest to international trading and smelting companies and multinational brands, which use tin in their products, including laptops, mobile and smart phones and cars. The Bisie operation will supply conflict-free tin from the eastern DRC and the Alphamin operation will be the manifestation of what conflict mineral legislation aimed to achieve.

Meeting market demand

The International Tin Research Institute (ITRI) has forecast that there is likely to be a global shortfall of tin commencing in 2018. Future supply is uncertain, as tin inventories are running low and economically viable tin reserves are being depleted. As a result, tin mining companies should become of increasing interest to the owners of consumer brands and their manufacturers, which use tin in their products (laptops, mobile phones and cars). Consumer companies will need to secure supply.

Research from the ITRI further suggests that production from many existing mines and mining regions may have peaked and a gradual decline may be expected in future years. In addition, tin stockpiles fell below the historical average as demand continues to outstrip supply. The marginal cost of production in 2015 (net of by-products revenue) was estimated at US$13 500 per tonne at the 85th percentile. The incentive price for many of the low-grade new projects is significantly higher. These factors are likely to support the tin price and a Bloomberg consensus forecast from 16 metals analysts employed by international financial institutions anticipates a stable price outlook in the medium term with a rising trend in the longer term. The Bisie tin deposit is one of the largest and most significant tin deposits in the world – thus making sense to explore the prospect and in future mine the tin at Bisie.

Alphamin believes that Bisie is most likely to be commissioned tin project in development. It is a very high-grade deposit, which will enjoy relatively low operating costs once a mine is constructed. The Bisie Tin Project will not face the significant metallurgical recovery challenges of other competing projects.  The completion of the 2016 Feasibility Study for the Project was an important step in demonstrating its robust nature and progressing it towards execution and production. With only a limited number of active industrial-scale tin mines outside of China and Indonesia and the majority of potential new projects facing significant technical, financing, permitting and other challenges, the Project is one of the most advanced developing tin projects in the world. It has the significant advantages of being one of the highest grade known tin ore bodies in the world, having favourable metallurgical properties and an approved mining license. There is no other known tin project in the world that can commit to construction under present price conditions, and as such, the Project is expected to become the next significant tin producer.

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