JAKARTA (TheInsiderStories) – Indonesia`s state-owned tin company PT Timah Tbk (IDX: TINS) will build a tin smelter in Nigeria as part of the company’s expansion and secure new tin ore reserves. In 2017 the company has said to invest billions of US dollars in the Nigerian minerals and mining sector.
Timah’s Director for Business Development and Commerce, Trenggono Sutioso said on Friday (16/03) 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 new JV will soon complete the process early and followed by building factories this year. The JV company’s future is aimed to optimize the mining concession area of 16,000 hectares, and is targeted to have an early stage production capacity of up to 5,000 metric ton ingots per year.
President Director of Timah M. Riza Pahlevi Tabrani said Nigeria has the potential to become a global producer of tin given its ample deposits and a long history of global tin mining. He expects Timah to become a world-class mining company through the expansion to Nigeria.
According to the Ministry’s calculation, the holding company concept will strengthen the financial capacity of the mining holding with Rp106 trillion (US$7.85 billion) in assets, originating from Rp24 trillion in liability and Rp82 in equity.
It also expects the assets to increase to Rp270 trillion as of the end of 2019. The SOEs Ministry has instructed the mining holding company to acquire the shares of PTFI as a subsidiary of the mining holding company.
The mining holding company has become a key strategy for the acquisition of 41.64 per cent of PTFI shares – to confirm the Indonesian government as the majority shareholder of 51 per cent – at a cost of $5.8 billion without mine reserves or $15.9 billion with mine reserves, located in Grasberg, Papua.
According to Fajar Harry Sampurno, Deputy for Mining, Strategic industries and Media at the State Own Enterprises Ministry, in short-term, the new holding will immediately make several corporate actions like the development of Smelter Grade Alumina Refinery project in Menpawah, West Kalimantan, East Halmahera Ferronickel Plant Development Project, and the development of Steam Electricity Power Plant in every factories of mined products.
Timah is looking to produce 2 million tonnes (MT) of tin by 2021 in order to remain the world`s second-largest tin ore producer.The company`s tin ingot production reached 31 MT of tin in 2017, with 60 per cent of it derived from offshore mining.