Indonesia’s state-controlled tin producer PT Timah reported a 42% rise in net income to Rp 1,112 billion (US$120 million) in the first half of 2008. Total net sales rose by 3% to Rp 4,203 billion (US$ 453 million), of which 91% was accounted for by refined tin and 9% came from coal. Timah recorded a big jump in the average realized price for tin to $21,916/tonne in January-June (compared to US$14,234/tonne in the first half of last year) and this more than offset a 31% fall in the volume of refined metal sales to 20,954 tonnes.
The fall in sales was in line with much lower levels of refined tin production (down 29% year-on-year to 22,992 tonnes) and an even bigger drop in tin-in-concentrate output (down 43% to 23,646 tonnes). Tin-in-concentrate production includes purchases from small mines, and the year-on-year comparisons reflect that fact that for most of the first half of last year Timah had no competition in ore purchases from independent smelters. The reactivation of some of the larger private smelters from the second quarter of 2007 onwards – plus large increases in fuel prices – has resulted in much higher production costs. These were reported at $12,968/tonne in the second quarter of 2008, 61% higher than in the same period of 2007.
Timah has reacted to changing market conditions by boosting its offshore mine production and expanding its smelting capacity, enabling it to start catching up on the treatment of large stocks of concentrate and slag. First half offshore production of tin-in-concentrate rose by 51% to 6,391 tonnes, or 27% of total mine production.
