timah reduces tin production

Interesting to note their average production cost is at least $12,000t. So why would they bother ?
Also halting investment .




Timah reduces production



Release date: 24 Oct 2008



Indonesia’s PT Timah may produce about 45,000 tonnes this year, Corporate Secretary Abrun Abubakar told Bloomberg on Wednesday. Average production costs are at least $12,000/tonne, which would indicate the “normal price” for tin would be around $15,000, he said. The new 2008 output estimate is 23% lower than the record production of 58,325 tonnes produced last year.

Last week President Director Wahid Usman told Dow Jones that the company would temporarily halt investment projects. “When prices are low like now, in the coming months we will only maintain operations without thinking about investment.” Usman said focus would be on just meeting already established end user contracts. 25% of PT Timah's production is sold to traders and the rest to end users. Given lower output forecast this year and next, the amount of tin sold to traders will decrease, he said. But supplying end users will not be a problem, he added, because the company has between 7,000 tons and 9,000 tons of stocks.