Indonesia seeking increase in tin export quota

Indonesia seeking increase in tin export quota

JAKARTA (JP): The state tin mining company PT Tambang Timah is
expecting to double its net profit to over Rp 40 billion
(US$18.26 million) this year and is seeking an increase in the
country's annual tin export quota for 1996 to 35,000 tons.

"The jump in our after-tax profit this year is mainly due to
the world's robust market and an improvement of our efficiency
following the company's restructuring program, which began in
1989," the company's president, Erry Riana Hardjapamekas, told
reporters on Saturday.

He said that the company's unaudited before-tax profit during
the first 11 months of this year reached Rp 80 billion.

"We are optimistic that our net profit will be higher than the
originally projected Rp 40 billion," he added.

Erry said that tin prices on the world market, which reached
$5,900 per ton over the weekend, are estimated to average at
$5,500 this year, as compared to last year's $5,000 average.

"We expect tin prices to average at $5,600 per ton next year,"
he said.

In the latter part of the 1980s, tin prices dropped from over
$12,000 per ton to $4,000 per tons, inflicting a deficit of Rp
25.61 billion at Tambang Timah in 1990.

Erry said the current robust market, which is partly prompted
by a recovery in the economy of developed countries, is predicted
to continue until the end of this decade due to increasing
demand.

Demand for tin in Asia is likely to grow by eight percent
annually, as compared to an average growth of only two percent
throughout the world, he said.

Erry also said his company, which exports about 95 percent of
its output, plans to increase its sales on the domestic market to
six percent.

He said that under the restructuring program, the company has
reduced the number of employees to approximately 6,500 this year
from 23,000 in the 1980s.

The program has helped increase the company's efficiency by 25
percent and the company can reduce its production costs from over
$6,500 per ton to less than $5,000, he said.

Quota

Erry said the company, which now produces four brands of tin
ingots -- Banka low-lead tin, Banka tin, Mentok tin and Koba tin
-- plans to seek an increase in Indonesia's annual export quota
to around 35,000 tons per year, beginning in 1996, from the
30,500 tons at present.

"Indonesia is expected to submit a proposal to the Association
of Tin Producing Countries next year," he said.

The association groups Australia, Bolivia, Indonesia,
Malaysia, Nigeria, Thailand and Zaire.

The executive said that the company has expanded its tin
smelting capacity to 45,000 tons per year, following the
installation of a new kiln, thereby making Indonesia the second
biggest tin producer in the world after Brazil.

Besides Tambang Timah, tin is also produced by private
companies in Indonesia.

But in the case of low-lead tin, Indonesia, with an annual
production capacity of 900 tons, is the biggest in the world,
Erry said.

He said Tambang Timah sells 50 percent of its production to
Asian countries, 25 percent to Europe, 20 percent to North
America and five percent on the domestic market.

The company is now in a position to sell shares to the public
next year. (fhp)