Timah plans to buy five mining firms

JAKARTA (JP): Publicly listed tin mining company PT Timah is trying to buy five ailing mining companies in Indonesia and overseas.

PT Timah president director Erry R. Hardjapamekas said yesterday the five firms mined gold, diamonds and coal in Indonesia, Australia, Malaysia and several other countries.

He refused to name the companies.

Erry said negotiations were underway and hoped to sign a deal with at least one of the companies this year.

"We are negotiating very, very carefully because the future of PT Timah will very much depend on the companies we are going to buy," Harry said after the firm's annual general meeting.

The firm has prepared Rp 150 billion (US$63 million) in equity and Rp 500 billion in loans for the purchases and its other expansion plans.

He said this money was initially for its plan to join in the development of the Busang gold mine in East Kalimantan, but the government opposed its approach.

"As company president I am, of course, disappointed. But it is not the end of the world," he said of the Busang situation.

Erry said the firm was exploring for gold in North Sumatra, West Kalimantan, Central Kalimantan, East Kalimantan and East Java.

He said the firm wanted to buy the companies because gold had a more stable price than tin, diamonds were more expensive than tin, while coal was the future main source of energy and also had a more stable price than tin.

Erry said the firm's shareholders agreed to distribute Rp 46.7 billion ($19.7 million) of its Rp 156.6 billion 1996 net profit in dividends. The rest would be used as reserve funds (Rp 106.8 billion) and for poverty alleviation programs (Rp 3.1 billion).

The dividend will be Rp 92.76 a share, a 41.34 percent rise on 1995's dividend.

The firm recorded a 16.4 percent increase in profit last year, from Rp 134.5 billion.

Last year's profit before tax and before "special post expenses" rose 33.74 percent to Rp 220 billion from Rp 164.5 billion in 1995.

"We have made profit in a streak of five years and 1996's profit is the highest in ten years," he said.

Last year, the company produced 40,337 tons of processed tin, 28,680 tons of which was branded Branka, 9,805 tons Mentok, 1,840 tons tin anode and the rest tin alloys.

The firm, which claims to be the world's most competitive tin miner, produces 20 percent of the world's tin and 96 percent of it is exported to the U.S, Europe and Asia. Its mines are in Bangka, Belitung, Karimun and the Kundur islands in southern Sumatra.

The tin price ranges from $5,800 to $6,200 a ton. (jsk)