Research Summary
The report discusses the potential impact of Indonesia’s new president, Prabowo Subianto, on the global tin market. It suggests that Subianto will likely continue the policy of his predecessor, Joko Widodo, to ban the export of critical minerals, including tin. This could significantly disrupt the global tin supply, as Indonesia accounts for 20% of it.
Key Takeaways
Indonesia’s Resource Nationalism
- Policy Continuation: The report suggests that the newly elected president of Indonesia, Prabowo Subianto, will likely continue the policy of his predecessor, Joko Widodo, to ban the export of critical minerals. This policy is part of a broader strategy of resource nationalism, where countries seek to add value to their resources domestically rather than exporting them as raw materials.
- Impact on Tin Market: If Indonesia implements an export ban on tin, it could significantly disrupt the global tin market. Indonesia is responsible for 20% of the global tin supply, and the report suggests that the country might take 25-50% of its supply offline to produce value-added products domestically.
Global Trend of Resource Nationalism
- Global South Rebellion: The report notes a growing trend of resource nationalism among developing countries, collectively known as the Global South. These countries are increasingly rejecting the terms of industrialized powers and seeking to develop their domestic industries.
- Examples of Resource Nationalism: The report cites examples of other countries implementing similar policies, including Mexico and Chile nationalizing lithium production and the Philippines considering an export ban on nickel.
Investment Implications
- Price Inflection: The report suggests that the potential supply disruption caused by Indonesia’s export ban could lead to a significant increase in tin prices. It notes that the baseline price to bring new supply online is already ~$3K higher than the current spot price.
- Investment in Alphamin Resources: The report mentions that the author owns a lot of Alphamin Resources (AFM.V) and will look to add on technical confirmations. However, it cautions that this is not investment advice and that mining is a risky business.
Actionable Insights
- Monitor the Policy Developments: Investors and businesses involved in the tin market should closely monitor the policy developments in Indonesia and other countries implementing resource nationalism policies. These policies could significantly disrupt the global supply of critical minerals and lead to price increases.
- Assess the Impact on Supply Chains: Businesses that rely on tin and other critical minerals should assess the potential impact of these policies on their supply chains and consider diversifying their sources of supply.
- Research the Potential of Alphamin Resources: Investors might want to research the potential of Alphamin Resources (AFM.V), a company mentioned in the report, and other mining companies that could benefit from an increase in tin prices.
