Timah sees refined tin output down up to 8 pct in 2011

Indonesia’s state-owned PT Timah, the world’s largest integrated tin miner, on

Wednesday estimated its refined tin production this year at between 37,000 and 40,000 
tonnes,  up to eight percent down on last year.

The forecast is likely to add to bullish sentiment on the metal after falling supply 

from Indonesia, the world’s top exporter, has been driving a rally in the past year 

in benchmark London tin prices to a fresh record high on Tuesday. 

The miner earlier this month said refined tin production in 2010 was 40,413 tonnes, 

which was down from 45,086 tonnes in 2009 as heavy rains hampered mining and 

easily recoverable onshore reserves are declining.    

"Excessive supply will not be good for maintaining the world’s tin price,” the company’s 

corporate secretary Abrun Abubakar told Reuters on Wednesday. “We will always control 

our production rate for reserve conservation purposes.”  

Indonesia, the world’s top tin exporter, will limit annual output to a maximum of 

100,000 tonnes if record high prices set off a scramble for the metal, a senior 

mining official said last month. 

Three-month tin on the London Metal Exchange soared to a record 

high of $32,799 a tonne on Tuesday as prospects of supply constraints from top 

exporter Indonesia attracted investors.            

Indonesia, which supplies nearly 30 percent of the world’s tin consumption, 

produced an estimated 105,000 tonnes in 2010. “We still cannot publish our 

2011 working programme, but output is estimated to be between 37,000 to 40,000 tonnes,”

Abubakar said.    

A Reuters survey published late in January showed analysts  expecting a deficit of 

15,000 tonnes in the tin market this year. The average of 24 forecasts showed the 

cash tin price would average $27,000 a tonne this year, and rise to

$27,419 next year.  

“The story for PT Timah is, even though they have production lower than 

previous years, they have benefited from the increasing tin price in the 

global market,” said Norico Gaman, head of research at PT BNI Securities.     

“With the tin price increasing more than 30 percent in 2010,

this benefits an improving net profit (outlook) for Timah.” 

Timah said this month it expects a 2011 net profit of around

1 trillion rupiah ($111.2 million), boosted by rising global tin

prices.  

Tin consultants ITRI last month estimated 2010 global tin

consumption at 360,300 tonnes, up 12.5 percent. 

Demand for the metal, used in electronics, plating and

lead-free solders, is seen rising in the coming years, while

analysts have for months forecast that Indonesian output will

fail to keep pace due to a lack of investment in mining.

In addition, a crackdown on illegal mining since 2006,

tighter export regulations, as well as declining onshore

reserves and rainy weather, have all hindered production in

Indonesia. Source: Reuters