Tin price spike shows Congo's growing origin role

By Daniel Magnowski - Analysis

DAKAR (Reuters) - Renewed fighting that has forced thousands to flee for their lives in Congo this week has had a disproportionately large effect on tin prices as international buyers increasing rely on the relatively small producer.

The Democratic Republic of Congo produces an estimated 4 percent of the world's tin, making it the world's sixth-biggest supplier, but buyers are relying more on metal from the central African country as major producer Indonesia cuts output.

Benchmark tin prices on the London Metal Exchange (LME) closed at $15,225 per tonne on Wednesday, up 31 percent since October 27, the day after heavily-armed rebel troops began marching towards major eastern city and tin trading centre Goma.

"There's been a price spike since the start of this week," said Nicholas Garrett, mining expert at London-based advisory Resource Consulting Services, who was speaking from Rwandan capital Kigali after visiting Goma.

Troops loyal to renegade Tutsi General Laurent Nkunda declared a cease-fire on Wednesday after routing the Congolese army and reaching the gates of Goma, but several people were killed in looting overnight and a number of cassiterite traders fled across the border.

"There's no room for thinking about business when security is the priority," said tin ore dealer John Kanyoni, who had crossed the border into Rwanda.

Kanyoni said he feared Goma's commercial infrastructure would break down.

"How do you export when there is no administration there ... There is a risk we'll have to stop for a while," he said.