Timah Q1 net profit plunges to Rp. 1 billion

State tin miner PT Timah Tbk, the world's largest integrated tin miner, on Tuesday reported its first quarter net profit plunged 99 percent year-on-year due to ailing tin prices and a slump in sales.

The state-owned company said its profit sank to around one billion rupiah ($127,500) and sales fell nearly 33 percent to 241.71 billion rupiah.

The staggering loss comes despite a cost reduction programme that slashed the firm's production costs by 34 percent to 288.7 billion rupiah in the same period.

"The average tin price received by the company was 23 percent lower compared to the first quarter of last year from $5,213 per tonne to $4,010 per tonne," the statement read.

Timah said it sold 5,861 tonnes of refined tins in the first quarter, down from 6,744 tonnes in the same period last year.

The poor results are unlikely to come as a much of a shock as the firm late last year warned it might only be able to hang on for several more months amid spiralling world prices and the impact of rampant illegal mining.

In an interview with Reuters earlier this month Timah said it was sticking to an original target of producing 34,400 tonnes of tin in 2002 from 38,081 tonnes last year, despite a recent recovery in global prices.

Global tin prices have wallowed at historic lows over the past year but bounced back to five-month highs earlier this month amid moves by some major world producers to cut output. Rising hopes that an expected global economic upturn would trigger a recovery in the electronics sector, a heavy user of tin, have also helped prices.

In a move aimed at reducing illegal mining -- which had been dragging down tin prices by flooding supply -- Indonesia's trade and industry minister last week issued a long-awaited decree to ban exports of tin ore and concentrates starting next month. (*)