Indonesia’s PT Timah reported a 29% rise in consolidated sales and a more than doubling of net income to Rp 689 billion (US$79 million) in the first half of 2011, despite a fall in tin sales volumes. Refined tin sales by the state-controlled company in January-June fell by 12% year-on-year to 17,457 tonnes, despite a marginal rise in mine production (including purchases of ore) to 17,701 tonnes of tin-in-concentrate. Sales last year were boosted by a run-down in stocks of concentrates and slags.
There were contrasting trends in mine production in the first half of this year. Offshore production fell by 9% to 8,255 tonnes, while supply from onshore mines (including small mines operating within Timah’s mining areas) rose by 11% to 9,446 tonnes of tin-in-concentrate. Last year offshore operations accounted for more than a half of Timah’s mine production for the first time since 1997, following a major expansion of dredging capacity in recent years by both the company itself and contractors working for it. Further investment in offshore capacity is continuing, with construction of a new type of deep water bucket wheel dredge underway. Refined tin production in the first half fell by 5% to 18,455 tonnes.
Strong tin prices, peaking at over $33,000/tonne during Q2, boosted margins, which averaged US$5,865/tonne in the first half. Average production costs in the period were reported at $22,136/tonne, up 57% on the same period of last year.
Timah forecasts its average realised price for refined tin will be around $24,000/tonne this year, a senior official told Dow Jones. The company has secured contract sales totalling 26,000 tonnes for the year, “and there’s no indication that buyers will cancel the contracts, unlike during the crisis in 2008,” Corporate Secretary Abrun Abubakar said.