Malaysia Smelting Corp expects Indonesian ops to be profitable by H2
Malaysia Smelting Corp Bhd (MSC) expects its Indonesian operations to be in the black by the second half of this year after its restructuring, said group CEO Datuk Seri Dr Mohd Ajib Anuar.
“We are positioning PT Koba Tin (in Indonesia) to earn reasonable margins, to provide stability in earnings margin. In the light of low tin prices (currently at $23,000/tonne), we are in a turnaround situation to resize Koba Tin and reduce cost structure.
“We are looking at how to expand volume of Koba Tin. We plan to turn around its operations to positive territory in the second half of this year,” he told reporters at MSC’s financial year 2011 results briefing yesterday.
Ajib said MSC is still profitable even at low tin prices due to fixed margin and low cost curve at its Rahman Hydraulic Tin in Perak but its Indonesian operations could affect its performance, therefore it needs to manage costs.
He said its revamp comes in two stages – selling down its equity in its Indonesian operations from 75 percent to 37.5 percent and applying for extension of its Koba Tin concession (expiring in March 2013) for another 10 years.
He added that it will increase production at Koba Tin via small-scale mining while adopting proper mining practices and subsequently lower costs.
“Koba Tin is now moving into competitively higher grade areas to secure better margins on lower tin prices,” he said.
Over here, Ajib said MSC is continuing efforts to identify potential mineralised areas to meet demand, which is expected to grow about 2 percent per year. He said there is a deficit of 12,000 tonnes in tin supply this year and 100,000 tonnes over the next five years.
“Rahman is a mining platform to expand our tin business in Malaysia and in future, some parts of Thailand,” he said.
On its 14ha of land in Butterworth, Penang, Ajib said it does not have plans for the land yet and will look at options in the next three to four years.
“For now, we are focusing on the tin business in Malaysia, Indonesia and DR Congo,” he said.
http://www.thesundaily.my/news/338072
Category: Malaysia
