China Tin to buy raw materials from PT Timah: Report

Liuzhou China Tin, China?s second largest producer, wants to buy raw materials from Indonesia?s PT Timah Tbk to offset low production from its main mine in the next few years, a senior company official told Reuters recently.

State-owned Liuzhou China Tin last month signed a letter of intent with PT Timah, the world?s largest integrated tin producer, to buy crude tin, a semi-processed raw material used to produce refined tin, which is used in everything from food cans to electrical products.

The official said Liuzhou China Tin was also considering joining with a Taiwanese investor to develop a tin mine and build a plant in Indonesia. He did not provide details of the project nor give information about its size.

?We have not started talks about details of the long- term purchases,? the official said, referring to the PT Timah deal.

The Chinese company wants to import 500 to 800 tons of crude tin a month from PT Timah.

?We have initially agreed to sell tin to China Tin. On the volumes and pricing, it will depend on our supply and market conditions,? a Jakarta-based official for PT Timah said.

PT Timah produced 27.2 percent more refined tin from a year ago to 19,214 tons in January-June 2005, the company said.

It mined 23,298 tons of tin in the same months, up 35.1 percent, indicating a surplus of the raw material in the company.

The tin price has fallen nearly 20 per cent so far this year to US$6,250 (US$1 = RM3.77) a ton on Friday for delivery of three months on the benchmark London Metal Exchange, partly due to higher supply. (*)