Indonesian state tin producer, , has agreed to a deal for the design and delivery of a new tin with Finnish firm, Outotec, based on their Furnace technology.

The delivery of the furnace is expected to take two years, with completion targeted by 2020. The new equipment will represent an upgrade from the reverberatory furnaces currently in use at PT ’s Muntok facility on the island of Bangka. The current has an annual production capacity of 42,000 tonnes, while the new furnace will have a capacity of 45,000 tonnes. The Ausmelt process is less energy intensive, less polluting and capable of processing lower grade ores more efficiently.

PT TIMAH had previously indicated it was willing to invest up to 500 billion Rupiah (~US$35 million) in the project. The company is concerned that offshore tin are becoming depleted in Indonesia and that a more efficient smelting process is required that is capable of competitively processing lower grade ore from primary onshore tin deposits, which it plans to develop in the future.

Our view: As the world’s third-largest tin producer currently, PT TIMAH’s adoption of Top Submerged Lance (TSL) technology is logical to ensure it maintains global competitiveness compared with other major tin producers. There has been a notable trend towards the use of TSL furnaces in recent years. The Bolivian state smelter, , worked with Outotec to commission its Ausmelt furnace in 2015. Ausmelt furnaces are also already in use in Peru and , while the Smelting Corporation is in the process of converting an existing lead ISASMELT TSL furnace for tin smelting. There has been a corresponding shift away from the use of traditional reverberatory furnaces; Chinese regulation is mandating the phasing out of the technology by 2020 as part of its drive to improve environmental standards.