JAKARTA (TheInsiderStories) – The world’ second-largest tin producer, PT Timah Tbk (IDX: TINS), plans to cut its capacity production up to 30 percent a month amid the coronavirus outbreak, said the CEO today (03/18). Earlier, the state-owned miners targets tin production to grow 5 percent from last year 65,000 metric tons (MT).
“Amid the coronavirus conditions many companies have stopped production and this has an impact on the demand and prices,” said Riza Pahlevi in a written statement.
Tin prices on the London Metal Exchange started the year trading at US$17,125/MT, and moved in an upward trend until Jan. 20, when the virus outbreak took over news headlines. Now the tin price around $15,400 a MT, a lowest since start the year.
According to him, the low price was triggered by the temporary halt in the production of electronic goods, smart-phones, and other tin-based technologies. He hopes that tin prices will soon improve.
In this year, the miner has budgeted capital expenditure up to Rp2 trillion ($133.33 million), mostly for exploration projects in Africa and in Indonesia. Currently, Timah is managing environmental permits in Nigeria to build a tin processing facility and is exploring Tanzania.
The company also plans to build two smelters with total investment around $100million. First smelter has been build since 2018 is Ausmelt with an investment of $80 million and is expected to be operate in 2021. The miner hopes to produce 45,000 MT tins from the smelter.
Timah’ finance director, Emil Ermindra explained, the company will meet the investment to build this smelter from bank loans and bond issuance. In July 2019, the company issued bonds worth of Rp1.3 trillion. The company also plans to build a smelter in Nigeria as part of the company’ expansion and secure new tin ore reserves.
He revealed, his party has established cooperation with partners in Nigeria, exploring the potential of tin and exploring the area that will be used as a smelter. The tin ore company has signed a Joint Venture Agreement (JV) with Topwide Ventures Limited to explore and manage the exploration, mining, processing and refining, transportation, sales and marketing of tin and mineral derivatives that exist in the African Continent.
“The smelter in Nigeria will have a capacity of around 5,000 Mt with an investment of around $20 million,” he concluded.
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