Indonesia poised to be world's top tin supplier

Indonesia poised to be world's top tin supplier

KUALA LUMPUR (Reuters): Indonesia could become the world's largest supplier of tin if dominant producer China retains its current output and Peru's production stabilizes, an executive with Malaysia's biggest tin smelter said yesterday.

"Indonesia has become one the world's lowest cost producers and has boosted its production significantly in recent years," Malaysia Smelting Corp Bhd commercial general manager Ong Kee Beng told Reuters in an interview.

He said Indonesia's top miner, PT Timah, had expanded aggressively in recent years and planned further growth.

"If all these plans are realized, Indonesia could overtake China to become the biggest tin producer in the world," he said.

"We shop all around for tin and we know what we're talking about," he said.

Ong told a tin conference in Ipoh on Thursday that Indonesia, like China, would have "the ability to cause an oversupply of metal and disrupt the market" if it became top tin producer.

Indonesia produced 52,000 tons of tin in 1997, just under China's 54,000 tons. Ong said Indonesian output was projected to reach 65,000 tons by 2007 while China's was expected to stabilize at 55,000.

"Much of China's production is still shrouded in mystery and reliable statistics are difficult to obtain, but its tin exports have been a big destabilization factor in the market," Ong told the conference.

China joined the Association of Tin Producing Countries in 1994, but backed out when it could not keep exports within the grouping's quota.

In the case of Peru, Ong said its main miner, Minsur, operates "probably the single biggest mine in the world".

"Its (Peru's) production is expected to rise but at a slower pace for the next 10 years and is expected to stabilize at around 38,000 tons per year," Ong told the conference.

Brazil and Bolivia, two other major tin producers, have seen a slowdown since last year, with output stabilizing at 20,000 and 14,000 tons respectively since 1996, said Ong.

He said other than the mines, the United States' Defense Logistics Agency also had about 11,000 tons of mostly old tin in its stock which it could sell at a discount.

Ong said global production was expected to climb steadily to 226,000 tons by 2007 from 203,000 projected for 1998.

He said the largest users of tin were expected to remain Asians.

China, besides being the largest producer, was also the largest tin consumer in Asia and may overtake United States as the world's biggest user of the metal over the next two decades, he said.

He told the conference that world consumption of tin was expected to grow at a compounded rate of 2.5 percent a year over the next decade, with tinplate being the main product of the metal, taking up 30 percent of production.