Govt mulls merging Timah and Antam

In a bid to save state tin mining firm PT Timah Tbk. from financial woes, government is considering to merge the company to another state owned mining firm PT Aneka Tambang Tbk., a minister said Tuesday.

?That is one of the possibility to save Timah,? said Laksamana Sukardi state minister for state owned enterprises.

Timah is in the brink of bankruptcy as tin price has dropped to around US$3,600 per ton compared to ideal level of above $5,000 per ton. The drop in the price has been partly caused by the rampant illegal mining activities at Timah?s mining sites in Bangka and Belitung islands. According to some estimates, the illegal miners could produce as much as 40,000 tons per year, roughly the same as Timah?s annual production level.

Both Timah and Antam are listed in the Jakarta Stock Exchange.

The company had reportedly stopped operating 12 of its 13 dredging vessels in Bangka, and would soon suspend 1,200 employees in a bid to save cost amid deteriorating financial condition.

Meanwhile Timah ?s corporate secretary Prasetyo B. Saksono said in a phone interview he was reluctant to comment on that matter. However, he said the company management has outlined a number of scenarios to cope with the drastic drop in tin prices in the past several months including merger, acquisition or strategic alliance.

"What we need to do now is to get out of tin business quickly and merger is one of the way out," he said.

Separately, director general of energy and mineral resources told Petromindo.com that ministry of energy and mineral resources welcomed the suggestion provided the merger was carried out with business-to-business principles. (alex/godang)