Koba Tin to raise output by 22 percent this year

Malaysia Smelting Corporation Bhd said an expansion of the group's PT Koba Tin plant completed earlier this year would allow it to produce 20,000 to 22,000 tons of refined tin in 2004, an increase of between 11 and 22 percent from last year's output of around 18,000 tons.

PT Koba Tin on Bangka island is owned 75 percent by Malaysia Smelting and 25 percent by Indonesia's state-owned tin miner, PT Timah Tbk, which also has its own mining concessions and smelter in Bangka.

As a result of the expansion of Koba Tin's production, Malaysia Smelting will raise its total refined tin output by around six to 11 percent this year to between 38,000 and 40,000 tons, a senior company official said on Wednesday.

"You'll probably see a slight increase in overall refined tin production from the group but it will not be a significant jump," Chua Cheong Yong, the group's general manager was quoted by Reuters as saying.

Tin is used in electronics, chemicals, glass production and as a corrosion-resistant coating for other metals.

The benchmark London Metal Exchange three-month tin price hit a 14-1/2-year peak of $9,100 a ton at the start of April, as the exchange's stocks dwindled and global demand increased.

Output at Malaysia Smelting's Butterworth plant in Penang would probably remain steady at around 18,000 tons this year, Chua said.

"I do not see production of refined tin at our Butterworth facility going above last year's figure," he said, citing a global shortage of tin concentrate, the key raw material for smelting the metal.

He said some of Malaysia Smelting's output at Butterworth was derived from refining crude metal shipped from Indonesia, where several small-scale independent smelters have started operating this year to take advantage of higher tin prices and avoid Indonesia's ban on tin concentrate exports. (*)