Indonesia’s state-controlled tin producer PT Timah reported a 5% fall in net profit last year, as a fall in sales volumes, higher production costs and higher tax payments offset the positive impact of higher world tin prices. Timah also attributed the decline in its sales to the moratorium on tin exports from Bangka Belitung province in the final quarter of last year, when prices fell below its production costs.
The company’s net profits in 2011 were Rp 896.78 billion (US$97 million), a 5.4% decline from Rp 947.94 billion in 2010. Timah sold 33,971 tonnes of refined tin in 2011, a 16% drop from 40,507 tonnes in 2010. Refined tin production was 38,132 tonnes, 6% lower compared to 40,412 tonnes in 2010, the fall being attributed to lower sales in the second half of the year.
Tin-in-concentrate production was marginally lower than the previous year, at 37,486 tonnes, with an 11% rise in ore from onshore mining (mainly sourced from small mines operating within the company’s leases) offsetting a 10% fall in offshore production. Offshore mining accounted for 49% of production last year, down from 54% in 2010. Average delivered costs per tonne last year were reported at $22,266/tonne, giving Timah an average margin of $4,447/tonne.
In a statement commenting on its strategic plan, the company said that it would focus on improving sales margins by “pushing more added value product sales, decreasing contract sales and concentrating marketing effort to the end user customer”. One specific target is to have 70% of sales in the form of higher grade (99.9% to 99.99%) tin. Meanwhile offshore production is to be supported by more investment in large new technology bucket wheel deep water dredges, as well as mobile smaller cutter suction dredges.
