JAKARTA (TheInsiderStories) - Tins miner, PT Timah Tbk (IDX: TINS), optimistic that the construction of new smelter in Bangka Belitong Island, South Sumatera, would be completed at the end of 2021, said the management last week. The Rp1.2 trillion (US$83.33 million) project construct by PT Wijaya Karya Tbk (IDX: WIKA) and Sydney-based Outotec Pty. Ltd.
The CEO Riza Pahlevi explained, the new smelter will have capacity production 40,000 tones of crude tin or 35,000 tones of ingot per year. To support this year’ business expansion, the unit of PT Indonesia Asahan Aluminium (MIND ID), prepared funds of Rp1.95 trillion. In 2021, the company targeting to produce more than 50,000 tones of tin.
Beside set up the downstream projects, Timah also have plans to refinance the company’ debts. The issuer has short-term debt around Rp4.74 trillion will mature in the next 12 months. The company considered to propose shareholder loans worth of $100 million to the parent.
Previously, finance director, Wibisono, said the loans its expecting have one year tenure with an interest target less than 2.5 percent per annum. The loan will be used to replace part of the working capital loans denominated in US Dollar. This year, the producer targeting the production volume more than 50,000 tones and the sales volume to be around 92 percent of the capacity production or equivalent to 46,000 tones.
In 2021, he said, the growth of world refined tin consumption is estimating to increase by 3.6 percent or around 353,900 tones compared to consumption of 341,600 tones in 2020. He is optimistic that the metal industry, especially tin, will improve inline with global trend prices.
In the first nine months of 2020, the unit of PT Indonesia Asahan Aluminium (MIND ID) recorded a larger loss of Rp255.15 billion due to higher production costs. The operating income dropping 18.42 percent to Rp11.87 trillion in annual basis. The net loss rose 45 percent from the same period of last year amounting to Rp175.78 billion.
Recently, Timah is exploring a loan facility amounting to $100 million from its MIND ID to refinances the company’ bank loans and for working capital. Finance director, Wibisono, reported that his party has proposed the coupon rate of the loan below 2.5 percent with one year of tenure.
As early November, the miner has get bank loans Rp6.6 trillion. Of that amount, the foreign debt reached $126 million. Now, the issuer has withdrawn a loan of around $30 million for the expansion of the Ausmelt furnace smelter. This project is assisted by the Finnish export finance agency, Finnvera, along with MUFG Bank and Indonesia Eximbank.
During 2020, Timah temporarily suspended a number of projects, like the smelter project in Nigeria, Africa, due to the COVID-19 pandemic. The producer planned to invest billions of dollars in the Nigerian minerals and mining sector and has signed a joint venture agreement with Topwide Ventures Ltd., to explore, mining, processing and refining, transportation, sales and marketing of tin and mineral derivatives that exist in the continent.
The management also decided not to continued the buy back shares program was scheduled on March 16 to June 16. Earlier, the company prepared Rp100 billion for the program helped by PT Danareksa Sekuritas.
In 2020, Timah still posted a net loss Rp340.59 billion, better than the loss in the previous year Rp611.28 billion. The decline in commodity prices also hit the miner’ income that fell by 21.33 percent to Rp15.21 trillion a year ago of Rp19.34 trillion.
US$1: Rp14,400
Written by Editorial Staff, Email: theinsiderstories@gmail.com
