PT Timah to cut tin output by 8%
Tuesday, July 11 2006 - 12:55 AM WIB
The president director of the Bangka Island-based company, Thobrani Alwie, told reporters on the sidelines of a meeting with the House of Representatives? energy commission that Timah would produce 38,407 metric tons of tin this year, compared with 41,799 tons in 2005.
Tin, the worst performing metal in 2005 on the London Exchange, has regained its footing this year by rising 33 percent. Tin for delivery in three months had risen 0.3 percent to $8,700 per ton at 9:50 am in London on Monday.
?We hope prices will increase after we reduce production,? said Thobrani after Monday?s meeting.
He said tin needed to trade at between $10,000 and $12,000 per ton to make up for increased fuel costs, which have tripled since the government ended subsidies for industrial users in July 2005.
Timah, which produces 40 percent of the world?s tin, saw its shares advance 0.6 percent to Rp 1,820 on the Jakarta Stock Exchange on Monday.
Timah, in which the state holds a 65 percent stake, said the government had to curb illegal tin mining operations, which produced about 80,000 tons of the metal each year, two times more than the 40,000 tons produced by Timah, to help increase prices.
?How can you allow 6,000 illegal miners to operate?? Thobrani asked.
He said that what was dug out of the earth and processed should by rights contribute to government revenue. Thobrani said that although the illegal miners could not be forced to pay tax, the smelters and refineries could.
Timah also disclosed plans Monday to produce 12,0,000 tons of asphalt per year to help supply Indonesia?s market of 1.2 million tons per year.
Thobrani said that a feasibility study for a facility in Buton, Southeast Sulawesi, was underway and would be completed in four months. The asphalt plant would require up to $30 million in financing, with operations due to begin in 2008 or 2009.
He added that Timah would likely seek a partner for the venture. (godang)