Zinc and Tin

The base metals key to infrastructure development and solder for electronics are enjoying a stellar 2021


Zinc production in Peru decreased by only 5.3% in 2020, totaling 1.33 million metric tonnes (mt), thanks to the country’s biggest producer increasing its zinc output by 34.3% (Antamina’s 491,180 mt/y Zn accounted for over one third of all zinc produced in Peru in 2020). The base metal used to galvanize steel experienced a rollercoaster 2020, dropping to a 5-year low of US$0.82/lb in March, before rising over US$1.25/lb in December 2020. This upward trajectory has continued in 2021, with zinc passing the US$1.38/lb mark in June, buoyed by the prospect of government stimulus packages involving heavy infrastructure spending.

Peru’s second biggest zinc producer, Nexa Resources, saw a 24.2% drop in production in 2020, due to its operations being underground mines, which were slower to ramp up after lockdown than their open-pit counterparts due to government restrictions.

Ricardo Porto, president and CEO of Nexa Resources Perú, revealed that the company’s focus on innovation helped Nexa weather the worst effects of the pandemic, and Nexa’s aggressive expansion plans in Peru remain intact. The context has improved significantly in 2021, with the company achieving its third best quarterly result ever in the first quarter of the year, in part due to high metals prices, but also due to a process of restructuring the company has undergone since before the pandemic.

Nexa’s restructuring program includes the introduction of new technology and a revision of mining processes that have resulted in lower costs and higher productivity at its Cerro Lindo, El Porvenir and Atacocha mines and Cajamarquilla smelter, explained Porto, who mentioned that 70% of Nexa’s innovation is incremental, focused on improving processes rather than replacing them.

On the subject of the zinc market, Porto stated he believes that the fundamentals have never been this strong. “The price peaked in 2017 due to a temporary supply shortage, but this was not backed up by the level of demand we are seeing now,” he said, observing that demand is usually concentrated into certain regions at different times, but for the first time Nexa is seeing large volumes being requested globally, including in Latin America.

Regarding zinc’s short-term outlook, Porto analyzed: “70% of the demand for zinc comes from infrastructure, and governments around the world have pledged to increase infrastructure spending in the wake of the pandemic, so the outlook remains robust for the rest of 2021.”


“The zinc market witnessed an oversupply of concentrate before the pandemic hit, which was later consumed by the smelters in China during the outbreak as supply struggled, especially in South America. At the moment, there is a supply deficit as expansion projects were delayed and no new mines were built. We expect this supply constraint to last several years, which will positively impact prices.”

Ricus Grimbeek, President & CEO, Trevali Mining

This sentiment was echoed by Ricus Grimbeek, president and CEO of Trevali Mining, which operates the Santander mine located 215 km northeast of Lima. “At the moment, there is a supply deficit as expansion projects were delayed and no new mines were built. We expect this supply constraint to last several years, which will positively impact prices,” reflected Grimbeek, noting that demand will likely remain solid as zinc is a raw material in solar panels and essential for galvanization and infrastructural developments, such as roads.

Expanding on Trevali’s plans in Peru, he added: We are also conducting some regional exploration as well as exploration below Santander to look for a possible extension of the current ore body. Therefore, the mine will be taken on an exploration phase by the end of Q1 of 2022, and as a result, a study will be conducted to expand the tailings facility.



While copper is undoubtedly the metal of the moment, the best performing base metal in 2021 has been tin, almost doubling from US$18,500 per tonne (mt) in January to over US$30,000/mt in June. The niche base metal, more widely known for plating steel cans used as food containers, is actually a vital component of the 4th industry revolution. Solder, the melted metal used to attach semiconductor chips to circuit boards and electronic devices, today accounts for approximately half of global tin demand.

High demand for consumer electronics and logistical challenges shipping metal out of Asia have caused a supply shortage of tin that shows no sign of abating, with prices on the ground going for a US$3,000/mt premium above where tin trades on the LME, according to Charles Swindon, managing director of UK-based RJH Trading Ltd, quoted in a Wall Street Journal report from May.

On June 2nd, Elon Musk tweeted that Tesla’s biggest challenge is its supply chain, especially for microcontroller chips, following on from US President Joe Biden’s announcement in April that semiconductor infrastructure must be invested in as a matter of national urgency. If Elon is serious about shoring up the supply chain, perhaps the development of tin deposits would be a more prudent investment than Dogecoin.

All of this is tremendous news for the few primary producers of tin. One such producer is Peru’s Minsur, which operates the San Rafael tin mine in Puno. San Rafael mine is the largest single tin producer in the western hemisphere, and third largest in the world, producing approximately 12% of the world’s tin.


Gonzalo Quijandría, Minsur’s director of corporate affairs and sustainability, commented that the main development at San Rafael has been the B2 project for tailings re-processing that started production late 2019. “The tin grade we had in our tailings was higher than the grade found in any other new project in the world, and on top of the economics, this helped us implement a circular economy project,” he said, adding that ore sorting technology has also helped the company improve production.

Image courtesy of Nexa Resources