Asia tin ore piles up in Indonesia, miners unhappy: Report

Tin ore stocks in Indonesia's main producing area of Bangka have increased to about 2,500 tons as tension grips the island over an export ban, Reuters quoted an industry sources as saying on Tuesday.

Indonesia banned exports of tin ore and concentrates in June to reduce illegal mining and improve prices. But Bangka miners and exporters want Jakarta to temporarily allow them to export the minerals to reduce stocks.

"Tension is unavoidable. Exporters can't sell their ore, so they won't get any money," said one regional trader. "Local stocks have gone up, and we are talking about 2,500 tons of unsold ore," he added.

In late June, tin ore stocks in Bangka were estimated at about 1,900 tons.

Traders said the stocks build-up risked leading to smuggling -- mainly blamed for last year's oversupply in the global market and sagging prices -- and could trigger social unrest in Bangka.

Sources at state-run PT Timah Tbk, the world's largest integrated miner which operates in Bangka off Sumatra, said an armed gang hijacked a company barge on Saturday, escaping with 33 tons of the cargo of 116.88 tons of ore.

Traders said tin ore, illegally mined in Bangka and the nearby island of Belitung, had been smuggled to Singapore last year before reaching smelters in Thailand and Malaysia.

They said the hijacking of the barge, on its way to Bangka from a mining site off the island, reflected local discontent over the export ban.

A Timah source said the barge was hijacked by about 30 people armed with daggers, axes and Samurai swords.

"The people, who were riding on a speed boat and a wooden boat, tied up Timah and navy officers on duty and locked them up at the barge's lookout cabin," the source said.

Police were not available for comment.

Frequent Protests

Government officials in Bangka said local miners had staged a number of noisy protests in front of local council offices since June, but there were no reports of violence.

"About 150 people staged a protest in front of the council last Friday. This kind of protest happens so many times," said one official.

Traders said Bangka exporters and miners had asked Timah to buy the ore now piling up on the island, but the company wanted to make sure the mineral didn't come from its own land.

"Exporters seem reluctant to have an open discussion with Timah about the issue. Maybe, they won't be able to explain where they get the ore from," said one trader.

Timah has temporarily stopped operating two dredgers and suspended activities in 100 sites because miners were found to be operating on its land without permits. (*)