Indonesian govt likely to end Koba Tin contract next year

JAKARTA: PT Koba Tin, Koba Tin is a joint venture company between Malaysian Smelting Corp Bhd, which owns 75 per cent stake, and Indonesia’s PT Timah (25 per cent), 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 given an indication 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 the competency in terms of the technology to become a decent tin producer,” Thamrin was quoted as saying by the English daily, The Jakarta Post, yesterday.

He said that since the publicly-listed PT Timah was already competent to manage tin mining on its own, it was best to give the task completely to the national company instead of extending the contract of PT Koba Tin, which is based in the Bangka Belitung province.

Meanwhile, the daily quoted Koba Tin’s corporate affairs director, Joni Abdul Rahman, as saying 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 was quoted as saying.

Koba Tin received its contract of work 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 set to expire in April 2003, but it was renewed in 2000 by then Energy and Mineral Resources Minister, Purnomo Yusgiantoro, for an additional 10 years of operation.

Data from the ministry showed that Koba Tin’s production had reached 22,180 metric tons in 2005.

However, in 2006, its production dropped to 8,250 metric tons and to 6,987 metric tons and 6,622 metric tons in 2007 and 2008 respectively.

Production rose to 7,336 metric tons in 2009 but declined to 6,616 metric tons in 2010, the lowest in the last six years, the report said.