Stop crackdown on small tin miners: Indonesia industry

Indonesian police carrying out an environmental crackdown in the main tin producing region of Bangka island, should stop targeting small-scale miners as it is hindering domestic smelters' supplies, the Indonesian Tin Industry Association said.

Small-scale traditional tin miners in Indonesia, the world's top tin exporter, have slowed mining activity because they fear being raided by the police, who have been intensifying a crackdown on illegal miners for the past few months.

Small smelters in the island off Sumatra depend on traditional miners for between 70 and 80 percent of their ore supply.

"The police come and get the miners," said Johan Murod, general secretary at the association and director of Bangka-Belitung Timah Sejahtera, which groups five private tin smelters on Bangka island.

"It is because government regulation is not helping with the mining situation in Bangka island," he told Reuters this week.

The government brought in a new mining law in 2009 that restricts the operation of small-scale miners, who tend to operate in an undisciplined way, causing damage to the environment, and do not pay royalties.

A crackdown on illegal mining, tighter export regulations, declining onshore reserves and rain that had hindered production in Indonesia have helped drive the tin rally earlier this year.

"The government is not supporting the people for mining, they only support big companies," Murod added. "All mining causes environmental damage but after the mining, we (too) can make environmental improvements with the right regulation."

Bangka police follow up every complaint or report on illegal tin mining, which are made daily, and are committed to taking action against every mining violation, a spokesman said on Thursday.

Illegal small-scale miners who are caught by the police, are often not prosecuted, but instead shown mining areas that permit public mining, Bangka Belitung police spokesman Djoko Poernomo told Reuters.

"The police will continue to order prohibited activities or illegal activities which are against the law," he added. "This is not a seasonal action... many mining activities are being done at forbidden areas such as protected forest."

BANGKA OUTPUT TO SLIP
Earlier this week, Indonesia's trade ministry said the country's refined tin exports rose 4.5 percent in July from the same month last year but were down almost 15 percent from last month.

Tin output in Bangka island will be 70,000 tonnes this year, compared with 80,000 tonnes last year, Murod said, as weaker tin prices hit output.

At 1:59 a.m. EDT, benchmark tin on the London Metal Exchange was at $23,500 a tonne versus $22,745 at the close on Wednesday. Tin struck a record high above $33,000 in April.
"Right now the smelters are waiting and seeing and do not buy tin," said Murod, whose association was established in 2009. "Right now, people are not mining because nobody (smelters) buys the tin because the LME price drops.

"At the moment, the LME price is due to speculation and not the real price," added Murod, speaking from Bangka island.

Murod forecasts more tin to come onto the market toward the end of this month however, as suppliers cash in ahead of the Islamic festival of Eid al-Fitr at the end of August.
He said however, that small-scale tin miners could be forced to cease operations if prices fall below $20,900 a tonne.

Southeast Asia's largest economy expects to produce 90,000 tonnes of refined tin this year, up from 78,965 tonnes in 2010, on expectations of improved weather conditions.
Indonesia's dry season started in most areas around May-June, the Climatology, Meteorology, and Geophysics Agency has said. Source: Reuters