Govt to build tin smelter in Bangka to boost output<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
In a bid to boost the country's domestic tin production and
\nbetter control the problem of widespread illegal mining in the
\nBangka Belitung islands, the government plans to collaborate with
\na number of players in the sector to develop a new smelter in the
\narea.<\/p>\n
The Ministry of Energy and Mineral Resources' Director General
\nof Geology and Mineral Resources Simon Sembiring said on Monday
\nthe Bangka Belitung provincial administration would form a joint
\nventure with state tin producer PT Timah and local company PT
\nKobatin to build the smelter.<\/p>\n
\"The smelter is needed to process tin production in Bangka
\nBelitung,\" said Sembiring.<\/p>\n
At present, much of the illegally-mined tin is exported, which
\nin turn reduces the domestic tin supply.<\/p>\n
According to Sembiring, the existing facilities in the tin-
\nrich province can only process 80,000 tons of tin per year, while
\nproduction, including that from unauthorized mining as well as
\nfrom Timah, stood at 110,000 tons a year.<\/p>\n
The rapid expansion of illegal mining on the islands started
\nwith the rolling out of regional autonomy, which allowed the
\nBangka Belitung provincial administration to issue licenses to
\nlocal companies to export tin, despite the central government's
\nban on the export of unprocessed tin.<\/p>\n
According to the ministry, the illegal mining industry on
\nBangka island employs an estimated 17,000 miners, and supplies
\nabout half of the country's annual tin output.<\/p>\n
Bangka island, situated off the coast of Sumatra, has the
\nworld's largest tin deposits with some 420,000 tons of proven
\nreserves, not including those located offshore.<\/p>\n
Timah, the world's largest integrated tin miner, which
\noperates mines on the island, has claimed that illegal tin mining
\nand trading over the past six years have inflicted potential
\nlosses on the company of at least Rp 500 billion (US$52.6
\nmillion).<\/p>\n
The company had to lower its production output to about 40,000
\ntons last year from 45,906 tons a year earlier due to a lack of
\nraw material caused by illegal tin mining on Bangka island.<\/p>\n
Metal prices, including those for nickel for stainless steel
\nand tin for electrical and automotive products have soared since
\n2003, driven by the high demand for these commodities arising
\nfrom rapid economic growth in China.<\/p>\n
Tin prices last year averaged $8,842 per ton, 76 percent
\nhigher than the average price of $4,817 a ton in 2003. At its
\npeak, tin was trading at $10,100 a ton in 2004.<\/p>\n
According to Bloomberg, tin for delivery in three months was
\ntraded at $8,040 a ton on the London Metal Exchange on Monday.<\/p>",
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