Newspaper article The Christian Science Monitor

World Tin Producers Battle Glut Illegal Ore from One Mine in Brazil, Declining Demand Have Knocked the Bottom out of Market

Newspaper article The Christian Science Monitor

World Tin Producers Battle Glut Illegal Ore from One Mine in Brazil, Declining Demand Have Knocked the Bottom out of Market

Article excerpt

FIVE years ago the price of tin collapsed by half, sending shock waves around the world. From the underground tin mines in Bolivia and Cornwall, England, to the coastal deposits in Indonesia and Thailand, thousands of tin miners were thrown out of work.

The outlook for tin producers is still bleak, analysts say. "The demand for tin has constantly dropped in the last 10 years, while production has gone up," says Fernando Urquidi, a mining expert for the United States Department of State.

Since the 1985 crash, the Association of Tin Producing Countries (ATPC), which includes Bolivia, Malaysia, Thailand, Indonesia, Australia, Zaire, and Nigeria as members, has been trying to fix export prices.

But two of the world's largest producers, Brazil and China, who together accounted for around 40 percent of world output last year, remain outside the tin cartel. Brazil, the largest producer, was expected to join the ATPC at its October meeting in Cochabamba, Bolivia. But ATPC hopes were dashed when the government of Fernando Collor de Mello said that it needed more time to clamp down on illegal tin production, estimated at 12,000 tons last year. Illegal production

Most of Brazil's illegal tin comes from one mine at Bom Futuro ("Good Future"), a sprawling deposit in the northwestern state of Rondonia, bordering Bolivia. Found in 1987, Bom Futuro's fabulous wealth attracted thousands of poor wildcat miners known as garimpeiros.

Official Brazilian reports say 6,000 tons of tin left Bom Futuro last year. The garimpeiros reportedly trade their tin with Bolivian smugglers, often swapping the tin ore for gold or cocaine.

Illegal output at Bom Futuro catapulted Brazil into first place in the world tin league. But garimpeiro production was also responsible for a rapid buildup in world stocks to 45,000 tons, which again depressed prices.

Brazil has agreed to try to reduce production by 6 percent, to 39,000 tons, next year, the same percentage cut as other ATPC countries.

But observers doubt the Collor government will risk confrontation with the garimpeiros. "I'm not saying Brazil is acting in bad faith, but I doubt it has the capacity or political decision to control the garimpeiros," says Alfredo Rojas, president of the Bolivian private miners association. …

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