Timah plans to build a new smelter on Kundur Island

Timah plans to construct another smelter on Kundur Island, close to Singapore, if the Mentok smelter could run at full capacity and when prices go above US$5,000/ton, Timah president-director Thobrani Alwi said on Friday.

"It has been a thought (to build a new smelter on Kundur Island) for two or three years. We still keep the plan," he was quoted by Dow Jones Newswires as saying.

The planned smelter will cost around US$1 million and will take around one year to complete, according to Thobrani.

Another factor crucial to a construction of a new smelter is Timah's tin ore reserves, which are currently expected to last for only eight to 10 years at most, Timah president director noted.

"We have done some explorations overseas (for new tin ore reserves), however, so far it has not been fruitful," Thobrani said.

Timah already halted its exploration in Vietnam, Thobrani said because the economic prospect is not good enough.

However the company keeps plans to explore further offshore in eastern Sumatra, Indonesia, and possibly into Phuket, Thailand and the western coast of Malaysia.

"We haven't been aggressive enough (in exploring new reserves) because of limited resources," Thobrani said, acknowledging the company's efforts to cut costs have resulted in financial constraints.

With depleting resources and uncertain direction of tin prices, Timah has made a fallback plan to mine coal as a new core business.

Timah has eyed coal operations mostly in Kalimantan, Thobrani said, but added such plan is still in an early stage. (*)