Following initial reports last Thursday, interviews with senior Indonesian officials today have confirmed that most – if not all – independent smelters in Bangka-Belitung province have stopped production. Furthermore the governor of the province has also asked the two major producers, PT Timah and PT Koba Tin to trim production “to a level required to meet contract agreements”, according to a Reuters report.
Governor Eko Maulana Ali told Reuters that production cuts were needed to restore prices to an “acceptable” level of $14 – 15,000/tonne. "A global recession has caused tin prices to fluctuate to an intolerable minimum level which has weakened tin trade and mining activity in the islands. We have asked legal tin smelters and miners to stop operating for a certain period or until prices are profitable," he said, adding idle tin mining activity may slow the province’s economic growth, raising unemployment and poverty rates.
"We support the governor’s policy," said Kamardin Md Top, Koba Tin’s president director, "because tin prices have fallen below the cost of production. But it won’t have much impact on us because our production is already very low." Kamardin told Reuters that Koba Tin’s output this year would be around 7,500 tonnes, or just half of its initial target of 15,000 tonnes, and below 2007 production of 8,000 tonnes.
Meanwhile Bloomberg reported that the PT Bangka Belitung Timah Sejahtera consortium of private smelters, a group set up in 2007, agreed to stop output last night. The seven smelters in the consortium produce 3,000 – 4,000 tpm of tin.
