Police probe of Koba Tin's operations will end in 1Q
22 February 2007
Source: Hoovers
metalsplace.com
Malaysia Smelting Corp. (5916.KU), parent owner of embattled Indonesia tin producer PT Koba Tin, said in a statement Wednesday it hopes the police probe of Koba Tin's operations will be resolved within the first quarter and the company can resume exporting tin.
In its fourth quarter report released Wednesday, MSC said its first quarter earnings for 2007 have been "adversely affected" by the police clampdown on Koba Tin's operations, although it expects a satisfactory performance for the year.
MSC owns a 75% stake in Koba Tin, the second largest tin producer in Indonesia, with an annual output of about 24,000 metric tons. The company declared force majeure on Koba Tin's shipments on Feb. 12, after Indonesian police arrested three senior officials at Koba Tin and banned all shipments and deliveries.
Police allege the company collected tin ore from small-scale miners operating outside its contract work area. All small-scale mining operations within Koba Tin's contract of work have also been shutdown.
However, Koba Tin can still mine and smelt tin from its own operations, MSC said in Wednesday's statement.
MSC has maintained its innocence and offered to cooperate with police during the investigation. But on Wednesday it criticized the impact that the police action has had on the tin market.
"The declaration of force majeure and suspension of tin metal is very disruptive to the global tin market," MSC said in its financial report.
The Indonesian government's campaign to stamp out illegal mining has sent global tin prices soaring to record highs. Indonesia is the world's second largest producer of tin.
The three-month tin futures contract on the London Metal Exchange rose to almost $14,000 a metric ton Wednesday, up 21% from the start of the year. The contract was trading at $13,890/ton on Thursday, up $65 from the London afternoon kerb.
On Wednesday, Indonesia's trade ministry said seven Indonesian tin producers have submitted applications for an export license. The ministry is reviewing the applications and will be granting licenses Feb. 23 to those that meet new criteria.
No officials at MSC were able to confirm if Koba Tin has applied for an export license and an official at the trade ministry also declined to confirm if the company had done so.
PT Timah (TINS.JK), the largest tin producer in Indonesia, said Wednesday it has applied for an export license and expects to be granted a permit on Feb. 23. The company owns a 25% stake in Koba Tin. |
