October 08, 2008

Timah update on CAPEX and acquisition plans

Senior executives of Indonesia’s state controlled tin company PT Timah told reporters on Monday that the company plans capital spending of IDR 4 trillion (USD 432 million) in the next three years and will also invest a further IDR 2 trillion in acquiring three coal operations. The company is currently finalizing a loan package of IDR 4 trillion with four local banks to fund the program.

Mr Wachid Usman president of PT Timah told AFX that “This years capital spending of IDR 1.4 trillion (USD 151 million) includes the purchase or construction of seven small cutter suction dredges and one large bucket ladder dredge. Timah currently operates 14 large dredges. Going forward, we will boost our exploration in offshore areas as a large portion of our tin reserves are located in offshore areas. A new detailed survey of the company’s reserves is currently being carried out by an independent consultancy, with results due to be announced shortly.”

Mr Usman told Bloomberg that “Meanwhile the company’s inland production has been adversely affected by competition from independent smelters, 16 of which now have export licenses. More licenses led to more collectors, who sometimes also operate to buy ores in our mining areas.”

The coal assets on which Timah is currently conducting due diligence are located in South Sumatra and Kalimantan. Acquisitions could be completed in the next few months, boosting the company’s coal reserves to 50 million tonnes and annual coal production capacity to some 5 million tonnes.

(Sourced from ITRI.co.uk)