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 is proving to be a positive catalyst for tin production by PT Timah Tbk (TINS). Illegal mining activities have long been a challenge for official producers, keeping a portion of the tin supply outside the formal supply chain. The administration of President Prabowo Subianto has targeted the closure of around 1,000 illegal tin mines in Bangka Belitung. These illegal activities have historically been far larger, accounting for up to 80% of total tin production in the region. The Indonesian Tin Exporters Association estimates that up to 12,000 tonnes of tin could be exported illegally each year. The scale of illegal mining has been a problem for TINS. The company’s management previously cited competition with illegal miners as a factor suppressing production. TINS’s tin ore production in the first half of 2025 fell 32% year-on-year to 6,997 tonnes. The government’s crackdown on illegal mining will serve as a positive catalyst for TINS. As illegal activity is suppressed, ore supply that was previously in informal channels has the opportunity to re-enter the official supply chain. This opens the door for TINS to increase ore acquisition, production, and sales volume. The momentum of TINS’s production recovery was already visible in the first half of 2026. Tin ore production reached 12,232 tonnes, an increase of about 75% from 6,997 tonnes 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 about 85% from 5,933 metric tonnes. The increase in volume also boosted financial performance. TINS’s 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 skyrocketed by approximately 805% to Rp2.71 trillion from Rp300 billion. This realised profit has already reached about 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. This fundamental improvement is reflected in TINS’s market capitalisation. In August 2025, the company’s market cap was around Rp7.6 trillion. By August 2026, TINS’s market capitalisation had reached approximately Rp28.75 trillion. Pasar Dana co-founder Hans Kwee stated that considering the performance growth, global tin prices, and the commitment to curbing illegal mining, he maintains a Buy recommendation for TINS with a target price of Rp4,700 to Rp5,000 per share. TINS’s prospects are currently supported by production recovery and the potential for supply normalisation through the illegal mining crackdown. He further assessed that TINS’s valuation remains attractive. With a price-to-earnings ratio (PER) of around 4.49 times, the 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) was around 51%. From an industry perspective, he believes the outlook for global tin prices remains positive amid a potential supply deficit driven by increasing demand from the semiconductor and artificial intelligence (AI) industries.