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