Timah to cut output in order to boost price

PT Timah Tbk, the world's biggest integrated tin producer, will cut its output by between 30 and 40 percent in the second half of the year compared with the first half’s output in a bid to maintain the price of the commodity at high level.

 

“In the first semester we boosted tin production, as a result supplies of tin slag are increasing. So we have to balance the production in the second half," President Director Wachid Usman said on Thursday.

 

The company, which produced 44,000 tons of tin last year, made 32,567 tons in the first six months of 2007, according to figures it released today. According to Wachid, the country’s total tin exports may reach 80,000 tons this year, less than the forecast of 90,000 tons made by several officials earlier.

 

He said the plan to lower the output came in line with the effort by the government and the country’s tin producers to formulate a quota system in order to keep tin prices at high level.

 

“The Ministry of Energy and Mineral Resources along with tin producers are formulating an export quota to maintain prices,'' Wachid said.

 

The arrangement would be an agreement between companies, not a codified ruling from the government, he said, without giving fuller details.

 

Tin prices significantly increased in the first half of the year following the government’s efforts to crack down on tin illegal mining in Bangka and Belitung Islands , the country’s centers of tin production. The price however declined in the past two weeks after subprime credit crisis hit the United States . (Denny)