Malaysia Smelting Corporation (MSC), in a bid to capitalise on forecast higher prices, is targeting raising mining output at its Rahman Hydraulic mine by 30% by the end of this calendar year.

Roughly US$ 2.4 million has been set aside to improve the company’s production to around 10 tonnes per day within the next two to three years. To begin with, however, CEO Patrick Yong is setting his sights on a more manageable goal. The company has already increased mine production from 8.4 tonnes per day to more than 9 tonnes per day since July 2018, simply by improving process efficiencies. Overall, production from the mine increased by 6% YoY during the 2018 financial year because of these changes.

To improve its mining output further, are looking to explore new sources of tin. Its 80%-owned subsidiary SL Tin Sdn Bhd. will begin mining at Sungai Lembing in Pahang this year, with commercial production expected shortly afterwards. Furthermore, MSC has leased two new areas of land to store and reprocessing tailings.

Our View: Mining contributed more than 70% of MSC’s profits during the 2018 financial year, but was down 27% YoY due to the appreciation of the ringgit against the US dollar, resulting in lower ringgit-denominated tin prices. However, the company is bullish on future uses of tin, and expects increased mine output to help generate greater profits. As well as the increased production coming from new mining leases, existing tailings will be moved to the new tailings facilities, potentially expanding the available resource at the Rahman Hydraulic mine.