Indonesian Government Likely to End Koba Tin Contract Next Year

JAKARTA, July 16 (Bernama) -- PT Koba Tin, a joint venture company between Malaysian Smelting Corp Bhd and Indonesia's PT Timah, is unlikely to get a renewal of its mining contract when it expires in April 2013. Energy and Mineral Resources' minerals and coal director-general, Thamrin Sihite, has indicated that the government may not extend its contract. "I think we do not have to renew the [Koba Tin] contract because PT Timah currently has competency in terms of technology to become a decent tin producer," Thamrin was quoted as saying by The Jakarta Post on Monday. The Malaysian company has a 75 per cent stake while the Indonesian company 25 per cent in the joint venture. Thamrin said that since the publicly-listed PT Timah was already competent to manage tin mining on its own, it would be best to give the task to the national company instead of extending the contract of PT Koba Tin, which is based in the Bangka Belitung province. The daily also quoted Koba Tin's corporate affairs director, Joni Abdul Rahman, as saying that the company's board of directors had yet to receive any official letter from the government regarding the existing contract. "We do not know whether the statement was official or not [...] our current position is to discuss it internally," Joni said. Koba Tin received its work contract in 1971 with a focus on tin mining on Bangka Island, then a part of the South Sumatera province. Its total mining area covers 41,680 hectares in the south-eastern part of the island. The contract was due to expire in April 2003 but was renewed in 2000 by then Energy and Mineral Resources Minister Purnomo Yusgiantoro for an additional 10 years. Data from the ministry showed that Koba Tin's production had reached 22,180 metric tonnes in 2005. However, production in 2006 fell to 8,250 metric tonnes and to 6,987 and 6,622 metric tonnes in 2007 and 2008 respectively. Production rose to 7,336 metric tonnes in 2009 but declined to 6,616 tonnes in 2010, the lowest in the last six years. -- BERNAMA