When the tin market collapsed in the 1980s local mining companies in Phuket and Phang Nga were forced to diversify. Many used the land holdings to develop resorts, hotels and golf courses. Most of these owners have never looked back. Tongkah Harbour PLC plans to get back to its roots.
Tongkah Harbour’s history goes back more than 100 years in Phuket. It was the brainchild of Captain Edward T. Miles of Australia who felt he could develop equipment to mechanize the offshore mining industry, after observing the labor intensive methods of the Chinese at Phuket in 1905. The company offshore tin mining in Phuket Bay in 1907, utilizing the world’s first sea-going bucket dredge.
The company, which is listed company at the Thai stock market, own large land plots around Saphan Hin and they have earlier submitted plans to develop Phuket Bay.
The company hopes to get back to its roots and start offshore tin mining off the coast of Phang Nga.
“Tongkah Harbourwill be pursuing licensing for its offshore tin ore resources in the Andaman Sea. Sea Minerals Ltd (a subsidiary of Tongkah) has filed mining plans for its previously submitted mining lease application in the Andaman Sea, about 25 km offshore northwest of Phuket Island”, writes the company in its recently published annual report.
These mining leases cover an area of approximately 8,000 hectares and contain around 163 million cubic meters of cassiterite (tin oxide) ore. Based on extensive exploration results, the estimated amount of tin is around 41,460 tons at a cutoff grade of 0.15 kg cassiterite per cubic meter, making it one of the largest unexploited tin deposits in the world.
Recent technological breakthroughs in off-shore mining, makes it technically and commercially feasible to do mining in the offshore fields which are located at depths of 70 meters. The increase in demand from developing countries has created a resurgence of the tin market resulting from higher consumption and depletion of resources in tin mining countries.
“It is now proposed to reactivate the project and finance the procurement of all required plant and equipment to exploit the deposit. The project has been confirmed viable by world class dredging companies to be within deepwater mining technology capability of up to 150 meters depth. Also, the Ministerial Regulation on Tin Royalty rates has confirmed a lower Tin Royalty rate of about 6%. At today’s price of USD 11,000 per ton, we anticipate a healthy return on investments”, writes Tongkah Harbour.
Based on the presentation and the data from its subsidiary Sea Minerals Ltd (SML), initial response from world’s leading engineering firms for design and construction of dredges indicates that the SML’s deposit could be mined technically and economically. In preparation for initiating a formal bankable feasibility study of the deposit, SML has been sourcing and evaluating mining and processing equipment and methodology, and cost compilations.
The deposit is at the 45 to 70 m depth range (averaging about 61m) and is now within the range of deepwater mining technology. Tin (cassiterite) will be the main product with processing of by-products dependent on the cost effectiveness of treating the amounts recoverable along with the cassiterite. It is apparent from initial studies that operating costs at sea will have to be minimized with most treatment being done onshore.
The proposals to engage the third party technical appraisers, the appointment of nominated financial advisors and the sponsoring financial institutions would be tabled before the Board and Shareholders of SML.
“Prior to this, we will have to appoint expertise to complete the dredging engineering plans and finalize a bankable feasibility study, according to the company.
The mining will be done by large pumps fitted with externally mounted cutter agitators. The pumps are electrically powered and are mounted on remotely controlled crawler units, or positioned and moved by cranes mounted on the dredging vessel. The dredged ore would then be transported to a floating heavy mineral concentration plant utilizing a series of screens and jigs applying gravity concentrating methods to extract the tin minerals. No chemicals would be added in this process, according to the company.
The heavy mineral concentrate will be periodically transported to a shore based separation plant that will separate out the cassiterite, and viable accessory minerals such as tantalum, niobium, monazite and zircon. The products will then be transported to Thaisarco’s smelter in Phuket.
The company does not believe the plans will affect the local communities:
“Challenges to overcome the local community is not an issue as the project is located out at sea. Furthermore, our staff have been working hard towards a resolution to educate the local surrounding community’s understanding that this is a sustainable development project which will not disturb and effect their livelihoods as the project is located 25 km off shore”, write the board of directors in its presentation.
Its subsidiary has laid plans to eventual project development over the last months. Sourcing in appropriate mining equipment and expertise has been ongoing during 2008, including application for a mining license and mining plans covering the maximum 50,000 rai (8,000 hectares) allowable under current Thai law, according to its report, which also has been filed with the Thai stock exchange.
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