Timah sees tin prices increasing this year
Thursday, June 6 2002 - 11:41 PM WIB
Timah president Thobrani Alwi said the ban on tin ore exports and joint measures by major tin producers to limit output should help boost sagging tin prices.
"We hope the price will reach the level (of $4,600 per ton) with these efforts," he said after a hearing with the House of Representatives Commission VIII for science, technology and the environment.
He acknowledged that the world's main tin producers -- Indonesia, China, Thailand and Brazil -- were seeking ways to prop up tin prices.
"We are cooperating with the other major tin producers to increase prices, because right now it is the traders not the producers who are controlling the price," Thobrani said.
Timah suffered a serious financial blow last year from a drop in tin prices.
According to the company, the price of tin stood at $5,213 per ton in the first quarter of last year, but fell to $4,984 in the second quarter, $4,066 in the third quarter and $3,827 in the fourth quarter.
These price levels could not offset Timah's operating costs of more than $4,000 per ton last year.
Timah's net profit suffered a drastic fall to Rp 32.3 billion ($3.6 million) last year from Rp 331.5 billion in 2000.
The company blamed illegal mining operations, which flooded the international market with tin ore, for the drop in tin prices. Timah asked the government to curb illegal mining on the islands of Bangka and Belitung.
The government responded, albeit belatedly. Earlier this year, the government issued a decree banning tin ore exports, effective as of June 1.
Timah has also undertaken several cost-cutting measures, including reducing work hours and halting uneconomical dredgers.
These measures allowed the company to reduce its operating costs to $3,998 per ton in the Jan-March period, from $4,409 in the fourth quarter of last year.
Timah expects to produce about 30,000 tons of tin this year. (*)