Government set to ban tin ore exports

Moch. N. Kurniawan, The Jakarta Post, Jakarta

The government is to issue a ruling next week to ban the export of tin concentrate in a bid to curb illegal mining, a move which could stop state-owned tin mining company PT Timah from going to the wall, a senior official said on Wednesday.

The director general of geology and mineral resources at the Ministry of Energy and Mineral Resources, Wimpy S. Tjetjep, said the Ministry of Industry and Trade had promised to revise the existing Ministerial Decree No. 146/1999 which permitted the export of tin concentrate.

"The Ministry of Industry and Trade has agreed to ban such activities. I predict (the decree) will be issued on January 15," he told reporters.

Wimpy said the new decree would turn tin into a strategic commodity whose trade would consequently be supervised by the Ministry of Industry and Trade.

He said that the government would only allow the export of tin metal.

He expected the new ruling would bring to an end the activities of illegal miners, especially in the Bangka-Belitung islands, who only produced concentrates.

Meanwhile, Director General for Foreign Trade Sudar S.A declined to say when the new decree would be issued.

"It could be issued before or after Jan. 15. All the relevant parties will hold further talks prior to the issuance of the decree," he told The Jakarta Post.

Timah has reportedly blamed illegal tin miners, who have flooded the world tin market with tin concentrate, for causing the current plunge in the price of the commodity and sending the company into near bankruptcy.

It said that tin prices on the world market had declined to US$3,500 per ton as of December last year from over $5,000 in 2000, while Timah's production costs stood at $4,300 per ton.

Timah booked Rp 25 billion (about US$2.5 million) in unaudited net profit for the first nine months of this year, 92 percent lower than the Rp 296 billion profit booked in the same period of last year.

The firm has had to take cost cutting measures to cope with the problem, including reducing working hours and halting the operation of uneconomical dredgers.

At present, there are 6,000 illegal mining operations involving 30,000 unauthorized miners on Bangka, and they have already encroached on 32 percent of Timah's former mines.