Timah to revive Koba operations this year

JAKARTA. Indonesia’s biggest tin miner PT Timah hopes to revive the operation of the defunct PT Koba Tin’s tin mines and smelting facilities this year, after it gets the nod from the House of Representatives.

PT Timah president director Sukrisno said on Wednesday the firm was waiting for a tin mining permit from the Energy and Mineral Resources Ministry, which would be subject to approval from legislators.

“We can begin operations immediately as we can utilize existing facilities and infrastructure of the former Koba Tin. Our past experience will also help,” he told The Jakarta Post.

After the issuance of a special mining license (IUPK) by the ministry, PT Timah and its partner would soon validate tin ore reserves in the area, which would determine future output to be generated from the mill, Sukrisno added.

The tin output from the mill will be wholly exported as domestic tin consumption is still small, according to Sukrisno. He declined to elaborate on the details as it remained unclear when the license would be issued.

Last September, the government terminated the contract of work (CoW) of PT Koba Tin, a 75 percent stake in which was owned by the Malaysian Smelting Corporation (MSC) and the remaining 25 percent by PT Timah, after the firm had failed to boost production for years.

After the termination, PT Timah was requested to keep the assets, but was forbidden to run any production activities until a new permit was issued.

Late last year, it obtained a principal agreement to form a joint venture with local administrations in Bangka-Belitung province, South Bangka regency and Central Bangka regency.

PT Timah is slated to control 51 percent of shares in the new joint venture and will manage the mining site of PT Koba Tin covering 41,300-hectares in Indonesia’s biggest tin resource area of Bangka Island. 

Bangka Belitung Islands Governor Rustam Effendi said on Tuesday evening there were ongoing discussions between the local administrations as they still aspired to control a majority stake in the joint venture.

“We’re still negotiating. We’re offering 40 percent for PT Timah and we will hold 60 percent,” he told reporters. 

Rustam said the local administrations would control the stakes through regional state-owned enterprises (BUMD) with possible cooperation with private firms. 

However, Rustam declined to name the private firms seeking involvement in the joint venture. PT Timah has set its production target at 28,000 to 30,000 tons for 2014, around the same level reached last year.