Koba Tin Contract of Work expired End-March, awaits Indonesian decision
(The Insider Stories) — The contract of work for PT Koba Tin, 75% owned by Kuala Lumpur-listed Malaysia Smelting Corporation (SMELT), has expired on March 31, the parent company said in a statement dated April 2.
MSC said that the Indonesian government is still evaluating its request to extend the contract. In the meantime Koba Tin can continue to operate in the country during an evaluation period of up to three months.
Koba Tin, in which Indonesian tin miner Timah (TINS) owns a 25% stake, is seeking to extend the contract by 10 years and has made several presentations to the Indonesian government, MSC said.
Failure in securing extension would resulted in a loss of 150 million ringgit ($49 million) to Koba Tin, said MSC, adding that it has fully provisioned the potential burden in 2012.
Koba Tin, located on the tin-producing island of Bangka, southeast of Sumatra, has an annual capacity of 25,000 metric tons of refined tin. Like many tin producers, production in the past two years have been lower due to sluggish global prices.
A slew of Indonesian government officials have signalled reluctance to extend Koba Tin’s contract of work, saying efforts to improve its reserves are lacking.
