Tambang Timah's net profit rises 350%

JAKARTA (JP): The net profits of publicly listed mining firm PT Tambang Timah rose by more than 350 percent to Rp 454.9 billion (US$60.65 million) in the first nine months of this year, up from Rp 100.6 billion over the same period last year, the company said in a statement released on Thursday.

The company said that its sales increased by 243 percent to Rp 1.58 trillion in the third quarter of this year alone.

Tin production increased by 4.8 percent to 32,225 tons during the first nine months of this year, up from 30,763 tons over the same period last year, the company said.

Although world tin prices are stronger than those for other base metals, average prices declined by 2.5 percent in the first nine months of this year to US$5,586 per ton. The average price over the corresponding period last year was $5,727 per ton, the statement said.

"But lower tin prices were compensated for by a favorable U.S. dollar-rupiah exchange rate resulting in higher sales revenues," the statement said.

The company generates most of its revenue in American dollars while most of its production costs are quoted in rupiah.

The statement said that total tin concentrate production for the period surged by 3.8 percent to 32,712 tons, up from 33,942 tons in the same period of last year.

Company president Erry Riyana Hardjapamekas said on Thursday that the recent strengthening of the rupiah toward the Rp 7,000 level against the U.S. dollar would not affect the company's profitability.

The company's tin output is expected to reach 40,000 tons this year on the back of bright prospects facing the country's mining industry, Erry told journalists on the sidelines of an Indonesia Forum business conference.

He also said that the company was currently negotiating the purchase of a 23 percent stake in PT Kaltim Prima Coal (KPC), the country's largest coal mining firm.

"We have not arrived at a price yet, but hopefully negotiations will be concluded in April next year," he told the media on the sidelines of a seminar here on Thursday.

KPC, which operates Indonesia's largest coal mine in Sangatta, East Kalimantan, is a joint venture between the U.K.-based British Petroleum Co. and Rio Tinto PLC.

The company, which started production in 1992, is required to divest up to 51 percent of its shares to Indonesian corporations after the first five years of production.

The company is obliged to divest a 15 percent stake in the first year of its operations followed by an 8 percent stake in the second year.

Tin mining firm PT Tambang Timah is among state-owned companies earmarked for privatization under a government initiative to generate US$1.5 billion in the current fiscal year.

Tambang Timah shares are listed on both the Jakarta Stock Exchange (JSX) and the London Sock Exchange. (jsk/aly)