Timah sets aside Rp 700 billion for capital expenditure

State-owned tin mining company PT Timah will set aside about Rp 700 billion (1US$= Rp 11,320) from its budget for capital expenditure (capex) this year, down by 50 percent from Rp 1.4 trillion in 2008.

PT Timah?s president director Wachid Usman said in Jakarta on Wednesday that the cut in the capex was part of the company?s efficiency programs to cope with the sharp drop in tin prices in the world market.

The larger parts of the capex funds will be used for its planned tin chemical plant as well as buying more dredges for off-shore mining, he said.

But Timah has delayed some projects this year as demand for tin used in food packaging and soldering of electronic components has fallen, he added.

Meanwhile, the company?s corporate secretary Abrun Abubakar said that the total amount of the 2009 capex could reach Rp 900 billion if the amount included those carried over from 2008.

Except the ongoing projects such as the construction of tin solder and tin chemical plants, the development of offshore mining technology, the building of a large dredging ship and the construction of an asphalt factory in Buton, Southeast Sulawesi, all other expansion plans would be temporarily stopped, he said.

Abrun said that with the sharp decline in the tin demand in the world, the company had no plan to increase the production this year. In 2008, the company?s tin metal production dropped by about 16 percent to 49,029 tons from 58,325 tons in 2007. Total sales also fell by 20 percent to 46,438 tons from 57,897 tons in 2007, he said.

?This year, the company's tin production may be unchanged from 2008,? he said. (Bernard)