Core Viewpoint - Indonesia is taking significant measures to combat illegal tin mining, which is expected to impact global tin supply and prices in the coming years [2][3]. Group 1: Tin Production and Market Impact - Indonesia is the world's second-largest producer of tin concentrate and refined tin, with an estimated tin concentrate production of approximately 50,000 tons in 2024, accounting for 16.7% of global production [1][3]. - The crackdown on illegal smelting operations is projected to lead to a 30.7% year-on-year decline in Indonesia's refined tin production in 2024, reaching 49,900 tons, the lowest level in over 20 years, representing 13.4% of global refined tin output [1][3]. - The Indonesian government's actions to close 1,000 illegal tin mines and block smuggling routes could prevent potential losses of up to 22 trillion Indonesian Rupiah (approximately 1.2 billion USD) from September to December 2025, and 45 trillion Rupiah (approximately 2.6 billion USD) in 2026 [2]. Group 2: Regulatory Changes and Supply Chain Dynamics - The Indonesian Ministry of Energy and Mineral Resources has reverted the RKAB approval process from a three-year to an annual basis, effective from 2026, requiring companies to resubmit new annual production quotas [4]. - The resumption of tin mining in Myanmar's Wa State is lagging behind expectations, with only about 1,200 tons exported in August, contributing to a continued supply gap in the overall tin market [4]. Group 3: Demand Trends and Future Outlook - The demand for tin is expected to rise significantly due to the increased tin consumption in AI servers, with estimates indicating that a single NVIDIA NVL72GB300 server consumes approximately 4.71 kg of tin, substantially higher than traditional servers [4]. - The annual growth rate of tin consumption in global AI servers is projected to reach 44.5%, with an expected consumption of 34,000 tons by 2030, which could represent 9% of the current global tin demand of 372,700 tons in 2024 [5]. - Long-term prospects for tin prices are optimistic due to limited new supply capacity and growing demand from emerging sectors such as AI, robotics, and steady growth in electric vehicles and photovoltaics [5].

Group 1 - Indonesia's President Prabowo Subianto announced the closure of 1,000 illegal tin mines and the blocking of smuggling channels, impacting the global tin supply market [1] - Indonesia is the second-largest producer of tin concentrate and refined tin, with an estimated production of 50,000 tons in 2024, accounting for 16.7% of global tin production [1] - The crackdown primarily affects small to medium-sized private smelters reliant on illegal mines, potentially exacerbating global tin supply tightness [1] Group 2 - Indonesia's Ministry of Energy and Mineral Resources has reverted the RKAB approval process from a three-year to an annual basis, effective from 2026, to promote compliance and efficiency in the tin industry [2] - The production recovery of tin mines in Myanmar's Wa State is below expectations, with only about 1,200 tons exported in August [2] - Tin smelting companies are under pressure as processing fees for tin concentrate have dropped to their lowest levels in three years [2] Group 3 - AI servers consume significantly more tin than traditional servers, with Nvidia's NVL72GB300 server consuming approximately 4.71 kg of tin per unit [3] - The global demand for tin from AI servers is projected to grow at an annual rate of 44.5% from 2025 to 2030, potentially reaching 34,000 tons by 2030 [3] - The limited new tin supply capacity, coupled with growth in emerging sectors like AI and renewable energy, supports a positive long-term outlook for tin prices [3]

Investment Rating - The industry investment rating is "Positive" [5] Core Viewpoints - Indonesia's crackdown on illegal tin mining is expected to significantly impact global tin supply, with a projected drop in Indonesia's refined tin production by 30.7% in 2024, reaching a 20-year low [2][11] - The demand for tin is anticipated to rise due to the increasing consumption of tin in AI servers, with an expected annual growth rate of 44.5% from 2025 to 2030 [4][18] - The overall tin supply remains tight, with additional pressures from the slow recovery of tin production in Myanmar's Wa region [3][12] Summary by Sections Section 1: Supply Disruption - Indonesia's President ordered the closure of 1,000 illegal tin mines, potentially avoiding losses of up to 12 billion USD in 2025 and 26 billion USD in 2026 [1] - Indonesia is the second-largest producer of tin, accounting for 16.7% of global tin ore production in 2024, with refined tin production expected to fall to 49,900 tons [2][11] Section 2: Regulatory Changes - The Indonesian government has reverted the RKAB approval process from a three-year to an annual basis, effective from 2026, to enhance compliance and efficiency in the tin industry [3][12] Section 3: Demand Growth - AI servers are projected to significantly increase tin consumption, with Nvidia's NVL72 GB300 server consuming approximately 4.71 kg of tin, which is substantially higher than traditional servers [4][14] - By 2030, global AI server tin consumption is expected to reach 34,000 tons, representing about 9% of the total global tin demand [18][19]

Group 1 - The Indonesia Tin Exporters Association estimates that the country's refined tin exports will increase from 45,000 tons in 2024 to approximately 53,000 tons this year [2] - Some smelters in Bangka-Belitung are resuming operations after being interrupted due to corruption investigations, which will support export shipments [2] - The government's crackdown on illegal mining activities in Bangka-Belitung is not expected to disrupt transportation [2] Group 2 - LME tin and Shanghai tin prices have surged following President Prabowo Subianto's order to close 1,000 illegal mining sites in Sumatra [2] - Approximately 80% of tin production in Bangka-Belitung was previously smuggled abroad through various channels, which have now been completely blocked [2] - The government’s restructuring actions have not disrupted production activities, with companies holding mining quotas continuing to meet their targets [2][3]

Core Viewpoint - Indonesian state-owned tin mining company Timah is optimistic about achieving its 2025 production target of 21,500 tonnes despite facing challenges in the first half of the year [1] Group 1: Production Performance - In the first half of this year, Timah reported a 32% decrease in tin ore output, totaling 6,997 tonnes, and a 29% decline in refined tin production to 6,870 tonnes [2] - The declines were attributed to illegal mining competition, adverse weather conditions, and delays in new mine developments [2] Group 2: Initiatives Against Illegal Mining - Timah has established a task force to combat illegal mining activities in key regions such as Bangka and Belitung Islands [2] - The initiative will also target intermediaries involved in the trade of illegally mined ore [3] - The Indonesian government is addressing illegal tin production by mandating the trading of refined tin through exchanges to ensure traceability [3] Group 3: Industry Challenges - The Indonesian Mining Association has urged the government to reconsider plans to increase royalty rates for mining products, citing rising operational costs and tight cash flows faced by miners [4] - The government's plan to increase royalties aims to improve industry governance [4]

Group 1 - Indonesia's progress in converting illegal tin mining assets to legal operations may help alleviate global supply tightness for tin, a critical material for lithium-ion batteries [1] - The Indonesian government seized five smelting plants involved in illegal mining in April, which accounted for half of the country's refining capacity [1][2] - The expected resumption of operations at these smelting plants is anticipated to increase supply in the tight market, with production projected to recover through 2025 and beyond [1][4] Group 2 - Due to the seizures, Indonesia's refined tin production is expected to decline by 30.7% in 2024, reaching 49,900 tons, marking a 20-year low [2] - Prior to the crackdown, Indonesia's annual refined tin production was at least 72,000 tons from 2019 to 2023 [3] - The government has expanded the SIMBARA tracking platform to monitor tin from mines to exports, indicating a significant shift in the industry [4] Group 3 - Analysts emphasize that while the government's recent actions are a positive step, sustained and effective enforcement will be crucial for lasting impact [5] - Regulatory hurdles are limiting producers' ability to increase output, as the new RKAB system has slowed the approval process for mining production and sales quotas [5][6] - The developments in Indonesia are expected to increase volatility in the tin market, with a projected global refined tin supply deficit of 7,600 tons by 2025 [7][8] Group 4 - Despite the recovery in Indonesian supply, other regions still face supply disruptions, indicating ongoing challenges in the global tin market [9]