Following 50 – 60% increases in refined tin production and sales in the first half of this year, Indonesia’s state-controlled producer PT Timah will cut output in the second half.
Refined tin production in January-June 2007 rose by 54% year-on-year to 32,567 tonnes, while sales were up 60% to 30,456 tonnes. “In the first semester we boosted tin production, as a result supplies of tin slag are increasing. So we have to balance the production in the second half,” President Director Wachid Usman told reporters at a presentation to investors today, according to Reuters.
Full year production is likely to be between 48,000 tonnes and 56,000 tonnes, depending on market conditions. The production rate will drop if the company treats more low-grade slags (stocks of which had risen to 16,375 tonnes contained tin at end-June) rather than high grade concentrates. Sales may also be constrained by an informal quota system which is currently being formulated.
“The energy and mineral resources ministry along with tin producers are formulating an export quota to maintain prices,” Usman said at the briefing, according to Bloomberg News. The arrangement would be an agreement between companies, not a codified ruling from the government, he said, without giving fuller details.
Higher prices and sales gave Timah’s financial results a huge boost in the first half of the year, with net profit rising to 780.8 billion rupiah (US$83 million) from only 23.9 billion rupiah in the same period of last year.
