Senior executives of Indonesia’s state-controlled tin company PT Timah told reporters on Monday that the company plans capital spending of Rp 4 trillion (US$ 432 million) in the next three years and will also invest a further Rp 2 trillion in acquiring three coal operations. The company is currently finalizing a loan package of Rp 4 trillion with four local banks to fund the programme.
This years capital spending of Rp1.4 trillion (US$151 million) includes the purchase or construction of seven small cutter suction dredges and one large bucket ladder dredge. Timah currently operates 14 large dredges. Company president Wachid Usman told AFX "Going forward, we will boost our exploration in offshore areas as a large portion of our tin reserves are located in offshore areas". A new detailed survey of the company’s reserves is currently being carried out by an independent consultancy, with results due to be announced shortly.
Meanwhile the company’s inland production has been adversely affected by competition from independent smelters, 16 of which now have export licences. “More licences led to more collectors, who sometimes also operate to buy ores in our mining areas,” Usman told Bloomberg.
The coal assets on which Timah is currently conducting due diligence are located in South Sumatra and Kalimantan. Acquisitions could be completed in the next few months, boosting the company’s coal reserves to 50 million tonnes and annual coal production capacity to some 5 million tonnes.
