Malaysia looks deeper into offshore tin mining

Malaysia looks deeper into offshore tin mining

KUALA LUMPUR (Reuters): Malaysia may revive plans to mine tin from its seabed as good tin ore on land becomes harder to find, an industry body said on Friday.

Once the world's largest tin miner, now producing a fraction of global supply, Malaysia is striving to retain its output of the metal and offshore mining may be the option to pursue, the Malaysian Chamber of Mines (MCM) said.

"There is a chance that you may see, during this year, the opening of an offshore mining project," Muhammad Muhammad Nor, executive secretary of the MCM, told Reuters in an interview.

He said offshore mining, common in Thailand and Indonesia, was something Malaysia has been mulling for years after tin deposits were found off the coast of Lumut in northern Perak, the country's top mining state.

But the idea never took off as every prospector wanted a monopoly on the deposits, he said.

Muhammad said Perak has now identified a party it could lease offshore mining rights to and that group was in talks with Indonesia's P.T. Timah Tbk to acquire expertise. Timah is the world's largest integrated tin producer.

Muhammad said traces of tin ore had also been found off the coast of the southwestern Malacca state, which like Perak, is along the Strait of Malacca.

Other offshore locations believed to contain tin are on the South China Sea facing the southern Johor and eastern Terengganu states, he said.

But the start of offshore mining will depend on the quantity of tin on the seabed and whether it can be extracted without undue environmental effects.

"It's a question of economics," Muhammad said.

"They have done the studies but it's very difficult to say whether there are enough deposits and how long they will remain in one place," he said, adding that movement of sand varied greatly in water.

Malaysia's tin production for 2000 has not been officially tallied but Muhammad estimated the figure at around 6,500 tons compared to 7,340 tons in 1999.

The fall was due to the closure of one of the two tin mining dredges in the country for several months last year, he said.

Local tin prices averaged 20,470 ringgit ($5,386) a ton compared to 20,200 ringgit in 1999. Friday's closing price for spot tin on the Kuala Lumpur Tin Market was $5,005 a ton.

Both production and prices may get a boost in the current year , partly due to a global shift towards using more tin in solder compounds, Muhammad said.