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MSC
to focus on mines
By Stephanie Phang
The Sun, 10th August 2004
MALAYSIA
Smelting Corporation Bhd, the world’s number three tin
producer, wants to invest in mines at home and abroad to secure
supplies of raw materials after a shortage pushed prices of
the metal used in cans and solder to a 15-year high.
“A
significant proportion of Malaysia Smelting’s profit
is likely to come from mining in the coming years,”
Chua Cheong Yong, group general manager for the Penang based
company’s commercial division, said in an interview.
Malaysia
Smelting, PT Timah, the world’s number one tin producer,
are rivals and are vying for mining assets as demand for the
metal outstrips supply.
The
world faces a shortfall of about 30,000 tonnes of tin this
year, Stephen Briggs, an analyst at Societe Generale in London,
said in a report last month.
Tin
futures in London rose to US$9,50 (RM36,670) a tones on May
27, the highest since July 1989. Though the price has fallen
to UD$8,800, it is more than double its September 2001 15-year
low of US$3,640.
The
average cost of mining tin worldwide is about US$5,000 US$5,500
a tonne, Chua said.
Malaysia
Smelting, operating since 1887, joined an Indonesian company
to explore for tin or on the Indonesian island of Bangka,
and is also looking for mines in nearby Singkep, off Sumatra,
and other areas in Indonesia, Chua said. It is also seeking
projects in Myanmar and Australia, he said.
The
company, which produces 13% of the world’s refined tin,
shut three of the five furnaces at Butterworth smelting plant
in Northern Peninsular Malaysia in 2002 as the supply of tin
concentrate dwindled. That year, it bought its first mine
a 75% stake in Indonesia’s PT Koba Tin.
It
is trying to buy a 25% stake in a company that is taking over
the mining assets of Malaysia’s Rahman Hydraulic Tin
Sdn Bhd, the country’s largest tin miner.
“We
believe that the prices of tin will be sustainable at this
sort of level over the next few years,” Chua said. “Maybe
not US$9,000, but maybe US$7,000.”
-
Bloomberg
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