Release: Malaysia Smelting: Developments at the company?s 75 % owned subsidiary, PT Koba Tin

(5 March 2008)--Further to the Company?s announcement on 29 January 2008 and in the light of some inaccurate media reports concerning the on-going local police investigation on small scale mining sub-contractors of its 75% owned subsidiary, PT Koba Tin, the Board of Directors of Malaysia Smelting Corporation Berhad wishes to advise that it has received the following clarification from the Management of PT Koba Tin.

As announced earlier, the head of local police force in Kabupaten (district) Bangka Tengah had issued a letter PT Koba Tin to stop receiving tin ore from its sub-contractors as well as cease production of tin ingots from its smelting operations on 29 January 2008 on the allegation that two of the company?s sub-contractors have been mining in a forest area within the company?s Contract of Work (CoW) area where mining is prohibited.

It was discovered that one of them was no longer a sub-contractor of PT Koba Tin. The alleged production from the other sub-contractor under investigation was part of a shipment of only 3 tonnes to PT Koba Tin.

As also mentioned in the earlier announcement, PT Koba Tin's internal control measures and investigation have confirmed that all production from its appointed sub-contractors have been derived from mining activities carried out within the Company's CoW and outside of the forest area.

PT Koba Tin implemented a new sub-contracting system in August 2007 for small scale mining production from the company?s CoW area after obtaining approvals from the Department of Minerals Resources and other relevant authorities. All sub-contractors are allocated specific blocks of areas with contained tin reserves outside production forest within the company?s CoW.

The estimated production of 350 tonnes per month from PT Koba Tin?s small scale mining approved by the Department of Minerals Resources for the year 2008 is less than 5% of the total Indonesian production from small scale mining.

Five (5) of PT Koba Tin employees who had been called to assist in the police investigation have since been released.

Since 29 January 2008, all production from small scale mining/ sub-contractors as well as the company?s smelting operations remain suspended pending further clarification and approval from relevant authorities. Efforts are still ongoing to secure the approvals as soon as possible. (end of release)