PT Timah, the world's second largest tin producer, has allocated up to Rp 2 trillion (US$216 billion) to acquire several mining companies, an official said Monday.
President director Wachid Usman told reporters Monday the company was in talks to buy mining companies in East Kalimantan, South Kalimantan and South Sulawesi to increase its coal reserves to 50 million tons this year.
Timah's exploration is centered in the Bangka waters, Kundur waters and TebrongBelitung, Riau. The company also owns a mining company in Singkep, Riau.
Corporate secretary Abrun Abubakar said the investments had yet to be finalized, "it all depends on the reserves these mining companies have, to see if the acquisitions would be able to fill this year's reserve target."
In addition to producing tin, Timah owns two coal companies; PT Tanjung Alam Jaya and coal trading company PT Timah Investasi Mineral.
"The reserves in Tanjung Alam have decreased to nine million tons... This year we want to gain 50 million tons in coal reserves, so we want this acquisition plan completed as soon as possible," Abrun said.
Timah plans to fund the acquisitions though a Rp 4 trillion standby loan involving five local banks.
Timah posted a net profit of Rp 487.3 billion in the first quarter of 2008, a 55 percent increase compared to Rp 314.3 billion in the same period last year.
Abrun said the company's full year income could surpass Rp 10.48 trillion, assuming its tin production reached 60,000 tons with a selling price of Rp 19,000 per ton.
Last year, Timah produced 58,927 tons of the metal, and posted a record Rp 1.8 trillion net profit on high prices of the commodity.
"We also plan to build at least three new factories worth Rp 437.5 billion," he said. (anw)
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