Indonesia’s top tin miner, PT Timah, sees its 2012 refined tin production dropping around 21 percent to 30,000 tonnes as it adjusts to new regulations on ore concentrate, the company said on Thursday.
Earlier reports revealed that the rules and raids on illegal mines had reduced Timah’s output to 30 percent of its earlier production levels.
Timah produced a total of 38,132 tonnes of refined tin in 2011, but in the first nine months of 2012 had only produced 23,255 tonnes of the metal used in electronic goods, 18 percent less than during the same period last year, the company said on Thursday.
“Because of the new policy there is confusion here and there,” Timah corporate secretary Agung Nugroho told Reuters, adding Timah was no longer allowed to buy tin concentrate from contractors.
Tin concentrate production had dropped 14 percent year-on-year to 24,357 tonnes in the first nine months of 2012 as a result of adjustments to its mining operations, Timah said in a statement.
“The company has made adjustments to its mining operations that will impact raw material productivity in the short term,” the statement said, adding the adjustments were expected to increase productivity and sustainability in the longer term.
However, Timah expects 2013 refined tin production to increase based on the adjustments to its mining processes, Nugroho said, referring to modifications to its off-shore mining processes and enhancements to mineral processing technology.
In September, exports of refined tin from Indonesia, the world’s top exporter of the metal, were 89 percent higher than the 5,233.06 tonnes shipped in the same period last year.
According to the Indonesian Tin Association, the new regulations, which forbid Timah from buying ore from mining contractors, would cut this month’s exports in half.
“We’re expecting to see a fall in Timah’s production this year but not as much as what they’re talking about now,” said Peter Kettle, manager of statistics and market studies at ITRI, the organisation dedicated to supporting the tin industry, and which is largely funded by tin producers and smelters.
“Until very recently Timah was still talking about producing around 38,000 tonnes this year so this is quite a sudden change.
“Their customers and everyone else will want to know how quickly they think they can get things back to a more normal situation,” Kettle said.
Increasing production would depend on how quickly Timah could form new relationships with contractors it has been using for offshore mining and the small mines that account for the great majority of their inland production, he said.
But the reduction in Timah’s output would only have a minor effect on the market, Commerzbank base metals analyst Daniel Briesemann said.
“There currently seems to be ample supply. Take a look at the LME stockpiles for example,” Briesemann said, adding that London Metal Exchange tin stocks were close to 12,000 tonnes, enough to last up to six months.