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Indonesia small tin smelters still shut even as prices rise

PANGKALPINANG, Indonesia, Nov 10 Small smelters in Indonesia's tin-producing Bangka-Belitung islands will stick with their plan to remain shut until January although prices have recovered from lows, the province's governor said on Monday.

Eko Maulana Ali, the governor of Bangka-Belitung islands, which produce nearly a quarter of the world's tin, urged small smelters to halt operations in October until tumbling prices rose to an acceptable level of $14,000-$15,000 a tonne.

Although prices have recovered to those levels in the past week, the smelters of Bangka-Belitung will remain shut until they feel prices have stabilised.
Prices of the silvery, malleable metal -- widely used in food packaging and to solder electronic products -- recovered to $15,050/$15,250 a tonne on Monday from $10,300 a tonne hit on Oct. 24, their lowest since January 2007.

Tin is about 40 percent below an all-time high of $25,500 a tonne hit in May, having slid along with the rest of industrial metals on concern that global economic weakness will slow demand.

"We want to see if prices tend to stabilise or go down. The smelters are ready to remain shut until prices are more predictable," Ali told Reuters.

He said the provincial government is awaiting a decree from the energy ministry which will set a maximum national tin production figure.

"We will regulate how much production is acceptable to support prices once the ministry issues the regulation," he said.

About 40 percent of the island's workforce is in tin mining.

Small smelters proliferated in the islands after Indonesia banned tin ore exports in 2002 to curb illegal mining.
Tin exports slowed following a government clampdown on illegal mining in October 2006 in the islands and the introduction of strict tin export rules.

Indonesia's refined tin exports are estimated to have fallen 67 percent in October to 4,439.39 tonnes -- the lowest since December 2007 -- from the same period last year as low tin prices forced small smelters to shut.
There are 19 smelters that are allowed to export the metal, including PT Timah Tbk, the world's largest integrated tin miner, and PT Koba Tin, which is 75-percent owned by Malaysian Smelting Corp.

Indonesia, the world's second largest tin producer after China, exported a total of 78,744 tonnes of refined tin in 2007, down 35 percent from 121,172 tonnes in 2006, data from statistics agency show.