The governor of Indonesia’s Bangka Belitung province announced late yesterday that the tin smelters which were closed down last October can apply for new operating licences immediately, subject to various conditions.
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The governor’s statement listed 10 terms and conditions that had to be met, covering legal, commercial, environmental and health and safety issues.
Among the conditions, re-licensed smelters were required to pay royalties before shipment, to buy tin ores only from legal sources and “to produce a minimum quality of 99,85% Sn tin ingots, and also to meet the standard international market requirements”.
It is expected that about eight of the twenty plus smelters that were in operation up to October 2006 will be re-licensed, although timing of the process is unclear.
The idled smelters were producing some 6,000 tonnes per month – about 20% of global supply – prior to the clampdown on illegal tin production driven by Indonesia’s national police force.
The big issues for the tin market in the short-term are the timing and scale of re-openings and the market impact of the new rules on metal quality. Previously about three-quarters of the smelters’ production was re-refined by overseas refiners in China, Malaysia, Singapore and Thailand and it is not clear whether the new rules will stop this.
