Reuters reported that when Mr Johan Jim Murod joined Indonesia's tin rush some 3 years ago and began his family run smelting business, prices of the industrial metal were about to go through the roof.
From 2009 until April last year, benchmark prices for tin mainly used in soldering for electronics more than tripled to a record high above USD 33,000 per tonne which meant hefty profits for the welter of smelters on the Bangka Belitung islands the world's largest tin producing region. Prices, however, came crashing down by mid 2011 and Murod's 6 smelters now process half as much ore as a year ago.
Many other facilities in the archipelago off Sumatra Island have closed down and squabbles have marred efforts to shore up prices through collective action, tarnishing the future of Indonesia's century’s old tin industry and its status as the world's top exporter of the metal.
Mr Murod said that "Profits are not so good right now because prices are low. Living standards and costs in Bangka are high, so miners can only live prosperously with USD 23,000 per tonne. A lot of miners have moved to other businesses and jobs."
Tin on the London Metal Exchange shed about 30% last year, falling to its lowest level in more than year at USD 17,000 per tonne in late September. Indonesia and China are the world's top tin producers but China consumes its output which makes the 96,000 or so tonnes of tin exported from the archipelago vital for global buyers and consumers.
But global economic uncertainty and the euro zone debt crisis have weighed on benchmark prices reducing demand for electronic products and the tin that goes into them.
In a bid to buoy his business, Mr Murod, whose private firm produces 15,000 tonnes of tin ingots per year have personally pleaded with his buyers in Singapore, Thailand, South Korea and Japan to give him higher prices.
He said that "We had a meeting in Singapore in December and told them that we have a problem and cannot produce. They said it is the European economic situation and not up to them."
He added that miners now don't mine production has dropped 50%. When comparing the Bangka output now to a year ago. The number of people jobless is increasing.
(Sourced from Reuters)
