Illegal Mining Crackdown Boosts PT Timah's Production

The Indonesian government is actively cracking down on illegal mining activities, including at tin mining sites in Bangka Belitung. This has become a positive catalyst for tin production by PT Timah Tbk (TINS).

Illegal mining activity has long been one of the challenges for official producers, as it has kept a portion of tin supply outside the official supply chain.

The administration of President Prabowo Subianto has set a target to close around 1,000 illegal tin mines in Bangka Belitung. This is understandable, as illegal mining activity has been far larger, accounting for up to 80% of total tin production in Bangka Belitung. Meanwhile, the Indonesian Tin Exporters Association estimates that up to 12,000 tonnes of tin can be exported illegally each year.

The scale of illegal mining activity has been a problem for TINS. TINS management has previously cited competition with illegal miners as one of the factors suppressing production. TINS tin ore production in the first half of 2025 fell 32% year-on-year to 6,997 tonnes.

Going forward, the government’s crackdown on illegal mining will be one of the positive catalysts for TINS. When illegal activity is suppressed, ore supply that was previously in the informal channel has the opportunity to return to the official supply chain. This condition can open room for TINS to increase ore acquisition, production and sales volume.

The momentum of TINS production recovery was already visible in the first half of 2026. Tin ore production reached 12,232 tonnes Sn, up around 75% from 6,997 tonnes Sn in the first half of 2025. Tin metal production increased to 10,865 metric tonnes, while tin metal sales reached 10,984 metric tonnes, soaring around 85% from 5,933 metric tonnes.

The increase in volume also boosted financial performance. TINS revenue reached Rp10.42 trillion in the first half of 2026, up 147% from Rp4.22 trillion in the same period last year. Net profit soared around 805% to Rp2.71 trillion from Rp300 billion.

The realised profit has reached around 169% of TINS’s full-year 2026 net profit target of Rp1.61 trillion. The company’s performance was also supported by high tin prices. The average tin price on the London Metal Exchange (LME) in the first half of 2026 reached US$50,319 per metric tonne, up 56.7% from US$32,116 per metric tonne in the first half of 2025.

The improvement in fundamentals is reflected in TINS’s market capitalisation. In August 2025, the company’s market capitalisation was around Rp7.6 trillion. Meanwhile, in August 2026, TINS’s market capitalisation had reached around Rp28.75 trillion.

Pasar Dana co-founder Hans Kwee said that considering the growth in performance, global tin prices and the commitment to curbing illegal mining, he still recommends a Buy for TINS with a target price of Rp4,700 to Rp5,000 per share. TINS’s prospects are currently supported by the recovery in production and the potential normalisation of supply through the crackdown on illegal mining.

Furthermore, he assessed that TINS’s valuation will remain attractive. With a price-to-earnings ratio (PER) of around 4.49 times, TINS’s valuation is still relatively cheap compared to the company’s sales and net profit growth. TINS’s net profit margin reached around 26% and return on equity (ROE) around 51%.

From an industry perspective, he assessed that the outlook for global tin prices remains positive amid the potential supply shortage due to increasing demand from the semiconductor and artificial intelligence (AI) industries.