MSC, MERC in tin mining alliance deal

Malaysia Smelting Corp. Bhd. (MSC) announced on Thursday it had entered into a heads of agreement (HoA) with British Virgin Island-incorporated firm Metal Resources Capital Limited (MERC) to team up to develop tin and other mineral resources in Indonesia.

Under the HoA, both parties has agreed to form a new company, whose assets would include MSC’s 75 percent shares in Bangka tin mining firm PT Koba Tin and MERC’s six tin mining concessions in Bangka Belitung province. Composition of shares in the new company would be decided by the value of MERC’s concession, but shall not exceed 40 percent, the company said.

MERC is owned by an Indonesian based group principally involved in mineral and resource development. Industry players said MERC is controlled by tycoon Tommy Winata.

Under the deal, MSC will control the new company and MERC will assist the new company to extend Koba Tin’s concession period by another 10 years to 2023. MERC will also function as a liaison with all relevant authorities of the Government of the Republic of Indonesia, to secure all approvals equired for PT Koba to carry out its operations including orestry activities and/or strategic alliance projects between MSC and MERC.

MSC said that the new company would be listed in “recognized” stock exchange.

Cut off date for the definitive deal was set off three months after the signing of HoA.

“The Board of Directors of MSC also expects that the Strategic Alliance will enable the Group to safeguard its interest and presence in Indonesia via its alliance with MERC in view that MERC will play a significant role in procuring the extension of PT Koba’s existing CoW for a period of not less than ten years upon its expiry. The Strategic Alliance will also allow the Group to forge better ties with the relevant authorities in Indonesia as well as enhance the Group’s leveraging position to pursue other opportunities in the future, capitalizing on MERC’s local knowledge,” the company said. (alex)