Malaysia Smelting Corporation has announced that it has agreed to sell up to 30% of its majority shareholding in Indonesia’s PT Koba Tin to a local group. MSC currently controls 75% of Koba, with the balance held by PT Timah. On completion of the deal, Oberthur Investment Limited would own up to 22.5% of Koba in exchange for a cash consideration of up to US$9.0 million. In a statement to the Kuala Lumpur stock exchange MSC described Oberthur as a Seychelles registered investment holding company owned by an Indonesian based group principally involved in tin, minerals and resource development.
MSC acquired its stake in Koba from Iluka Corporation in 2002. Last year Koba produced 7,109 tonnes of refined tin and made a net profit of US$3.26 million. Production in 2009 is targeted at just over 9,000 tonnes, although the company’s smelting capacity is some 25,000 tpy.
The proceeds of the sale will be used by MSC for working capital purposes and/or to reduce short-term borrowings. In its statement the company said that the strategic alliance with the new local partners “is hoped to revitalize PT Koba’s operations through additional tin production from small-scale mining and maximizing utilization of PT Koba’s smelting capacity”.
