The Indonesian state-run tin company, PT Timah, has reported a fall in production, stocks and revenue in its 2016 first half financial report, despite a reduction in costs and rise in average tin prices during the period.
The company reported that its first half production of tin ore from mine operations fell 37% to 9,107 tonnes compared to the same period of 2015, with onshore mining output falling 68% to 1,831 tonnes and offshore production falling 15% to 7,277 tonnes. Refined tin production was also down on H1 2015, falling 33% to 9,520 tonnes, with sales down 17% to 11,682 tonnes. Total inventory also fell significantly with stocks of tin ore down 44% to 1,693 tonnes, while refined tin stocks fell 46% to 3,976 tonnes. Slag inventory remained broadly static at 8,064 tonnes.
With regards to financial performance, Timah reported H1 losses of Rp 32.82 billion (~US$ 2.4 million) with revenues falling 12% to Rp 2.82 trillion (~US$ 212 million) compared to H1 2015. However, cost of revenues also fell by 14% to Rp 2.54 trillion (~US$ 191 million) and financial performance in Q2 2016 was reported to be an improvement on Q1. The company’s share price also rose 45% during the first half of the year to Rp 700 per share, largely in response to the rise in the tin price over the period.
ITRI View: Operations were seriously disrupted by extreme monsoon weather conditions in the first quarter, while sales were restricted by delays in obtaining a new six-month export permit. Total mine and refined tin output in the second half of the year is therefore expected to rise. The company’s latest production estimate for 2016 is between 24,000 and 27,000 tonnes, although production is anticipated to recover to 30,000 tonnes in 2017 as a result of the addition of new tin mining vessels.
