Indonesian state tin company PT Timah today reported big increases in production and profits in 2014. Mine production of tin-in-concentrate rose by 23% year-on-year to 32,319 tonnes, while refined tin production grew by 16% to 27,550 tonnes. Net profit rose to Rp 638 billion (US$48 million). Company spokesman Renny Hutagalung attributed the improved financial performance both to higher tin sales (up by 16% to 26,907 tonnes) and efficiency improvements resulting in lower production costs.
As annual tin sales were less than refined metal production, which in turn was lower than mine production, stocks of both metal and raw materials have continued to rise. At the end of last year refined tin stocks amounted to 5,097 tonnes, with total contained tin stocks (including tin-in-concentrate and slags) reported at 17,560 tonnes. Although this represented a reduction of some 800 tonnes compared to the end of the previous quarter, it was up by 6,343 tonnes or 36% compared to the end of 2013.
In a statement announcing the results, the company said that “our Board of Directors is optimistic that the tin industry is still a promising business, supported by the more conducive regulations and, of course, all stakeholders.” However it also enumerated four pillars of its business strategy which all involved diversification rather than investment in its core tin mining activities.
ITRI View: PT Timah has benefitted from the new export regulations forcing tin sales through the ICDX exchange since September 2013 and increased activity by customs and other authorities, resulting in reduced competition for feed from independent smelters. It is notable that over three-quarters of the increase in its mine production last year came from onshore operations: mainly small-scale miners on Timah mining leases who may have previously sold their production to private ore buyers.
