Reuters reported that while the current financial situation has made project financing difficult for most miners, tin miners in particular are having trouble raising money for their projects. That could be bad news for the tin market, which is already volatile and in deficit.
As quoted in the market news:
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.
“It’s very tough for tin producers,” said Peter Cook, chairman of Australia’s biggest tin producer, Metals X.
“The real problem is tin is a commodity that has a very volatile price … Any bank that finances a project likes to secure the cash flow,” he said in an interview during a recent tin conference sponsored by industry group ITRI.
Another difficulty is weak share markets and low valuations of mining shares, which makes it difficult to raise money through equity issues.
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