Indonesia’s largest tin miner, PT Timah, has been asked by the government to take over the operations of Malaysian-led joint venture, PT Koba Tin, when its contract expires in 2013, an official at the state-owned firm said.
Indonesia, the world’s biggest exporter of refined tin, announced a series of new mining rules this year that include limiting foreign ownership in mines to no more than 49 percent after 10 years of production.
Unlisted Koba Tin, which is also involved in the processing, smelting and marketing of tin, operates under Indonesia’s previous contract of work (CoW) licensing system and has a total area of 41 680 hectares (102 993 acres) in the Bangka-Belitung islands, the country’s main tin producing region.
“(The) government confirmed that there is no extension for Koba Tin and it’s a request from the government that PT Timah has to be ready for that take over,” Timah’s corporate secretary, Agung Nugroho, told Reuters in an email. “But there is no agreement at all at the moment.”
Nugroho declined to elaborate.
Koba Tin, a joint venture 75 percent held by Malaysia Smelting Corporation and 25 percent by PT Timah, was not immediately available for comment.
Last month, a spokesman at Koba Tin said in a statement that its CoW was due to expire on March 31, 2013, but that the company had submitted an application for a ten-year extension and was awaiting a response from the Indonesian government.
Malaysia Smelting Corporation has said it would reduce its equity interest in Koba Tin to 30 percent, with the remaining 70 percent being Indonesian owned.
Earlier this year, demonstrators blocked Koba Tin’s exports due to a pay dispute.
According to their website, Timah currently has tin mining rights for 522 460 hectares in and around Bangka-Belitung.
Indonesia’s total 2011 exports of tin, mainly used in soldering for electronics, rose almost 4 percent to 96,019.76 tonnes and currently stand at about 56,000 tonnes for the year to date.
Koba Tin was the 11th biggest refined tin producer in 2010 at 6,644 tonnes.