PT Timah cancels plan to acquire Berau Coal

Publicly listed tin mining company PT Timah Tbk has cancelled a plan to acquire coalmine operator PT Berau Coal following the worsening of its financial condition, Bisnis Indonesia reported on Wednesday.

Ali Darwin, a director of the tin mining company, said in Jakarta on Tuesday that it was impossible now for the company to acquire the coal mining firm while its own financial condition was so severe.

?We have decided to cancel the acquisition plan. Moreover, there is other bidder which is willing to take over the company with higher price,? he was quoted as saying by the business daily.

PT Berau, a subsidiary of PT United Tractors, which operates a major coal concession in East Kalimantan, produces about 4.9 million tons of coal this year. In 2006, the company?s coal production is estimated to reach about 13 million tons.

According to Ali Darwin, the main priority for PT Timah at present is how to cope with its financial problem such by reducing the number of the labor force to 1,440 and to halt the operation of its 12 dredging vessels.

The continued drop in tin prices in the world market in the past several months has severely hit the company?s financial condition. The government, which owns a majority stake in the tin mining company, is currently working on a restructuring plan to rescue the firm.(*)