Malaysia Smelting Corporation reported yesterday that its first quarter pre-tax profit jumped to M$25.5 million from M$10.1 million in the same period of 2007, as a result “high tin prices and contributions from Indonesian subsidiary, PT Koba Tin”. However profits were well down on the M$77.8 million realised in the previous quarter, following the closure of Koba’s smelter between January 29 and March 14 and the continuing prohibition small-scale mining in the company’s contract of work area. The production restrictions relate to an investigation by local police into alleged illegal mining by two sub-contactors.
The group’s Indonesian 75%-owned subsidiary contributed M$14.9 million to first quarter pre-tax profits. In a statement to the Malaysian stock exchange the company said that “the management of PT Koba Tin is currently working with the relevant authorities at the District, Provincial and Central Government levels to resolve the allegations against the two of PT Koba Tin’s appointed sub-contractors. The Board is hopeful that this issue would be resolved as soon as possible so that PT Koba Tin could resume its small scale mining operations.”
The company also said that a provisional agreement announced last August to merge its holding in Koba with other Indonesian tin assets controlled by local group Metal Resources Capital Limited (MERC) had lapsed at the end of March.
