A senior government official told the Jakarta Post that the contract of work under which PT Koba Tin operates is unlikely to be extended beyond the current expiry date of 31 March 2013. Energy and Mineral Resources Ministry’s minerals and coal director general, Thamrin Sihite, said the government would not extend the Bangka Belitung province-based company’s contract.
“I think we do not have to renew the contract because PT Timah currently has the competency in terms of the technology to become a decent tin producer,” he said, noting that PT Timah was already competent to manage tin mining on their own, it was best to give the task completely to the national company instead of extending the contract of PT Koba Tin. PT Timah currently has a 25% stake in the company, with Malaysia Smelting Corporation holding the balance of its equity. However MSC this year announced plans to divest the majority of its shareholding to an Indonesian group, Optima Synergy Resources, subject to a contract extension being obtained.
Koba Tin’s corporate affairs director, Joni Abdul Rahman, said 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,” he said. The company produced 6,332 tonnes of refined tin last year, well below its capacity of some 25,000 tpy, and is currently loss-making.
