Indonesia’s Timah Eyes Big Stake in Bangka Miner
State tin company Timah says it is ready to take over Koba Tin should the Malaysian-controlled company’s contract of work not be extended next year.
“If we are appointed to take over Koba Tin, we are prepared,” Timah president director Sukrisno told the Jakarta Globe on Friday. Koba, a medium-sized miner with operations on Bangka island, is 75 percent controlled by Malaysia Smelting Corporation, while the remaining 25 percent is held by Timah.
Koba has a contract of work, effectively a mining permit, for 41,680 hectares in Bangka-Belitung, the island-based province off the east coast of Sumatra, its website says. According to Sukrisno, Koba’s contract of work with the government will terminate next April.
But the government may not extend its contract, Sukrisno said, citing a statement made by Thamrin Sihite, the director general of minerals and coal at the Ministry of Energy and Mineral Resources.
Government regulations state that when a mining contract of work is not extended, the mine returns to the government, which can auction it or grant it to a state-controlled miner.
The president director said Koba exported about 6,000 tons of refined tin annually and operated four smelters. By comparison, Timah produced more than 40,413 tons of refined tin last year.
Sukrisno said the value of Koba had yet to be determined, but Timah would conduct a due diligence on the smaller miner.
Meanwhile, despite the decline in tin prices, Sukrisno said he was optimistic that Timah could sell about 36,000 to 37,000 tons this year. That is lower than the 40,507 tons of refined tin Timah sold last year.
“The price plummeted in the first half, so we have been holding back on sales, especially on spot selling,” the official said, adding that the company continued to fulfill its sales obligations under existing contract, despite the undesirable prices.
In the first half of this year, the company sold 17,236 tons of refined tin, down from 17,457 tons on the same period last year. Average selling prices at Timah fell by 24 percent to $22,565 a ton.