With roots dating back to 1887 as the smelting operations arm of The Straits Trading Company Limited (STC), Malaysia Smelting Corporation Berhad (MSC) of today enjoys an unsurpassed global reputation as the world’s leading custom smelter and is renowned as one of the world’s largest integrated producers of tin metal.

Not one to rest on its laurels, the Group has embarked on a vigorous diversification strategy in 2007 which is intended for the Company to transform itself once again - this time from a single commodity business focused on tin to a well establised resources organisation in the metals and mineral resources sector based in the Asia-Pacific region with a global outlook and worldwide network of capabilities.

With the Group’s core expertise and solid foundation of over a century of smelting excellence to its credit, the Group’s smelting facility in Butterworth operates one of the most cost efficient smelting plants in the world converting primary, secondary and often complex tin bearing ores into high purity tin metal for industrial application. The plant has a production capacity of approximately 35,000 tonnes of refined tin a year. MSC Straits refined tin brand which is registered at London Metal Exchange (LME) and Kuala Lumpur Tin Market (KLTM) is accepted worldwide and has purity ranging from the standard Grade A (99.85% Sn) to the premium grade electrolytic tin (99.99% Sn).

The Group’s Indonesian operations are primarily undertaken through its three subsidiaries - 75% owned PT Koba Tin, wholly owned PT MSC Indonesia and 60% owned PT Tenaga Anugerah. PT Koba Tin operates two dredges and gravel-pump mining units in rich alluvial grounds within an area of 41,680 hectares under a contract of work agreement with the Government of Republic of Indonesia. PT Koba Tin has its own smelter with a production capacity of 25,000 tonnes of refined tin a year and produces the premium grade Koba brand (99.9% Sn) which is also widely consumed as a premier brand with superior quality.

PT MSC Indonesia is the Group’s vehicle undertaking major exploratory programmes to search for new on-shore tin deposits in Indonesia under production sharing agreements with local Indonesian counterparts. PT MSC Indonesia has entered into various exploration and production sharing agreements covering a total prospective area of approximately 16,000 hectares in Indonesia.

PT Tenaga Anugerah has secured production sharing rights in offshore tin mining areas in Indonesia. Production is expected to commence during the middle of 2008.

The Group has also gained a foothold in the Australian tin mining industry with its 40% equity interest in Australian Oriental Minerals NL (AOM). AOM is currently undertaking exploration and development of prospective and potential tin mining areas in Australia.

In November 2004, MSC acquired Rahman Hydraulic Tin Sdn. Bhd. (RHT), Malaysia’s long established and largest operating open-pit eluvial tin mine. Extensive exploration works and improvements of milling/concentrator circuit and recovery operations have been undertaken since the takeover, and today RHT is a sustainable and significant tin producer in Malaysia.

In the downstream sector, the Group has a 40% equity interest in Redring Solder (M) Sdn Bhd. Redring Solder’s principal activities are the manufacture and sale of both the tin lead and lead free solder products for jointing and semi-conductor applications in the electrical and electronic industries.

In October 2007, MSC entered into a joint venture agreement with Guangxi Guilin Jinwei Realty Co. Ltd and Vertex Metals incorporation of Taiwan to enable it to own and operate a tin smelting plant in the Guangxi province. The Company’s stake in this joint venture is 40%. The smelting plant is located in Linqui, Guangxi and is expected to have a targeted annual production capacity of 10,000 tonnes of refined tin and tin based products, including tin
chemicals and is projected to commence operations in the second quarter of 2008.

OTHER METALS AND MINERALS
Three core metals and minerals - gold, coal and nickel - have been identified to be added to MSC’s portfolio and a three pronged strategy for its diversification plans has been adopted. These are:

• Strategic investment as a cornerstone investor with board representation
• Life-of-mine investments with controlling interest and potentials for furtherexpansion through organic growth and acquisitions
• Portfolio investments in resource equities

Barely six months’ into the adoption of the diversification strategy, the Group managed to make significant stride by its strategic entries into both nickel and gold sectors.

Nickel
In December 2007, MSC acquired a strategic interest in a nickel development project in Vietnam through the subscription of 12.8% shares in the Canadian listed Asian Mineral Resources Limited (AMR) with provision to increase is shareholding further up to 18.96%. AMR’s nickel project offers high grade massive sulphide nickel deposit which is being developed to become low cost nickel producer with a short lead time to production and is expected to commence in early 2009.

Gold
In March 2008, MSC chalked up another historic milestone following its strategic entry into the gold sector with the acruisition of 18.9% interest in Beaconsfield Gold NL, a company listed on the Australian Securities Exchange. Beaconsfield is a mid-tier gold producer operating a high grade underground gold mine in Tasmania, Australia.

MSC will continue to focus its growth strategy on its core business through strategic acquisitions and organic growth where its core expertise, skills and capabilities can add value and make a difference particularly in increasing operating efficiencies, innovating products and services and forging global commercial and marketing networks to ensure its continued leadership position in the tin industry. Whilst the core tin business shall provide stable earnings, the MSC Group shall continue to broaden its earnings base in the global metals and mineral resources sector, working strategically and synergistically with its parent company, The Straits Trading Company Limited.