Timah, local govts seek to end illegal mining

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.