Timah, local govts seek to end illegal mining

Moch. N. Kurniawan, The Jakarta Post, Jakarta

Publicly-listed state tin mining firm PT Timah and local governments on Bangka and Belitung islands are studying measures to end the illegal mining activities on the islands that have been troubling the firm for years and brought it to the brink of bankruptcy.

Company spokesman Prasetyo B. Saksono said that, during meetings with the company's management, local government officials had expressed their commitment to end the illegal mining.

But the company would continue preparing "emergency plans" in case it and the local governments were unable to find a solution to the problem.

The emergency plans include cutting a forecast 3,750 jobs or about 70 percent of the company's 5,200 workforce and closing all of its inland operations.

"We will continue to watch the situation closely. If there's no improvement by January, we will have no other choice but to implement the plan to save the company," he told the Jakarta Post on Friday.

Timah recently blamed the illegal mining for a drop in the world tin price and a fall in its revenue.

Its profits fell 92 percent to Rp 25 billion ($2.4 million) in the first nine months of 2001, from Rp 296 billion in the same period last year.

The illegal mining had significantly depressed the world tin price due to the large amount of tin extracted by the illegal miners and sold at low prices.

At present, Prasetyo said, the company had suspended the operation of several high cost excavators.

Prasetyo said no agreement had been reached between Timah and the local governments but the latter had suggested that they would allow only Timah, PT Kobatin, a firm owned by the provincial administration, and several other private firms to continue operating on the islands.

"Thus, they (the local authorities) will limit illegal mining operations," he said.

In addition, Prasetyo said, the local governments suggested that they would review the bylaw, issued early this year, that allows companies to export tin despite not having mining concessions on the islands. This bylaw was blamed for the rise in illegal mining.

He also said Timah and other tin mining companies would help develop unlicensed miners operating in their respective areas.

According to Timah, there are 6,000 groups of illegal miners on the islands with a total output of 30,000 tons of contained tin per year compared with Timah's annual output of 40,000 tons.