No rescue plan yet for ailing Timah: Purnomo

The government does not have any specific rescue plan yet for the ailing state-owned tin mining company PT Timah, according to Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

Speaking to reporters on the sidelines of a seminar in Jakarta Wednesday, Purnomo said that his office would coordinate with the office of the state minister of state enterprises to help resolve Timah?s problem.

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.

Purnomo said that so far efforts to push local administrations to curb the illegal mining activity had failed.

The steep drop in tin price had caused Timah?s net profit in the first nine-month of 2001 to drop by 92 percent to Rp 25 billion compared to the same period last year.

In a bid to save expenses, Timah will have to stop operating 12 dredging vessels and may soon to temporarily suspend some 1,200 employees.

If the situation remains worst in the first nine months of 2002, Timah may have to be liquidated, company officials have said.(Alex)