Illegal tin mining hits Timah's finances<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Widespread illegal tin mining in Bangka island has caused
\nstate-owned tin miner PT Timah to suffer a potential loss of up
\nto US$ 26 million in the second half of this year.<\/p>\n
Timah president Erry Riyana Hardjapamekas revealed in Jakarta
\non Sunday evening that illegal tin mining had contributed to the
\nflooding of tin into the world market, and thus lowered tin
\nprices.<\/p>\n
Consequently, tin prices in the world market had declined to
\nUS$3,500 per ton now from over $5,000 last year.<\/p>\n
Meanwhile, Timah corporate secretary Prasetyo B. Saksono said
\non Monday that Timah's cost of production remained high, at
\n$4,300 per ton.<\/p>\n
That made it impossible for PT Timah to operate normally, as
\nit had sustained a deficit of around $5 million per month since
\nJuly.<\/p>\n
According to its unaudited financial report, Timah booked Rp
\n25 billion (about US$2.5 million) in net profit for the first
\nnine months of this year, 92 percent lower than the profit booked
\nin the same period of last year, which was Rp 296 billion.<\/p>\n
This sharp decrease in net profit was recorded against the
\nbackdrop of increasing tin production.<\/p>\n
The company's refined tin output increased by nine percent to
\n27,900 tons in the first nine months of this year, and tin-in-
\nconcentrate production was up by 20 percent to 34,384 tons.<\/p>\n
Because of the deficit recorded since July, Prasetyo said PT
\nTimah had been forced to cut the workload of its workforce.<\/p>\n
Of its 5,221 employees, 3,000 had to take alternate days off.
\nWorse still, about 1,440 dredger operators had to be sent home as
\nthe company had halted the operation of uneconomical or high cost
\ndredgers and inland mining.<\/p>\n
Timah has stopped the operation of 13 of the 20 dredgers it
\nnormally uses.<\/p>\n
The company, nevertheless, is still paying staff on the
\npayroll.<\/p>\n
All this calamity started with the implementation of regional
\nautonomy law, which allowed the Bangka Belitung provincial
\nadministration to license local companies to export tin.<\/p>\n
This prompted illegal mining on Bangka island.<\/p>\n
At present, there are 6,000 illegal mining operations,
\ninvolving 30,000 illegal miners, on Bangka. They have even mined
\n32 percent of Timah's former mines.<\/p>\n
Nevertheless, Timah claimed that it had reached an agreement
\nwith about 60 percent of those illegal miners to sell their tin
\nore output to Timah.<\/p>\n
It is part of Timah's strategy to prevent illegal tin from
\nentering the international market.<\/p>\n
Another move was to spearhead the establishment of the "team
\nof eleven", comprising representatives from Timah, PT Koba Tin,
\nlocal administrations, the customs office, the police and local
\nlegislative councils.<\/p>\n
The team, tasked to solve the problems related to illegal tin
\nmining and trading, decided that no companies would be allowed to
\nexport tin ore. This would serve as the first step in reducing
\nthe problem of the illegal tin trade.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/illegal-tin-mining-hits-timahs-finances-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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