Tin Miners in Indonesia Stop Output on Raid Concern, Arsani Says

Small-scale traditional tin miners in Bangka Belitung province, Indonesia’s main producing area, have stopped excavating ore since the end of May because of concern the police will raid their operations, said Hidayat Arsani, president of the Indonesian Tin Mining Association.

“The situation is not conducive for the Bangka economy,” Arsani said in a phone interview from the provincial capital Pangkalpinang today. “Small miners are the main suppliers of ores to the independent smelters. If the stoppage is prolonged, we may have to idle capacity.” The move hasn’t had any impact on production so far as smelters have stockpiles and can source ore from their own mines, said Arsani.

The halt adds to concern that supplies from Indonesia, the world’s largest exporter, will fall this year as the country imposes tighter purity rules starting next month. The independent smelters represented 67 percent of supplies from the country in 2012, according to the Trade Ministry. A drop in production may help stem a 10 percent decline in tin prices on the London Metal Exchange this year.

About 2,000 miners rallied in front of the office of PT Timah, the country’s biggest producer, in Pangkalpinang today, said Hendra Apollo, a protest coordinator. That followed a demonstration by 1,500 Timah workers on May 22 against illegal mining, said Agung Nugroho, the company’s corporate secretary.

Exports Drop

The company has reported findings on unauthorized mining within its concession to the authority, Nugroho said by phone. The police will follow procedures and there won’t be any repressive action, said Indra, provincial spokesman.

Tin for three-month delivery advanced 0.7 percent to $20,999 a metric ton on the LME today. Shipments from Indonesia dropped 16 percent to 7,853 tons in April from a month earlier, the steepest decline in five months, according to government data. The smelters cut output because of slump in prices.

Exports may fall 19 percent to 80,000 tons this year as the country imposes higher purity limits, according to the median of 12 estimates in a Bloomberg survey in April. The new rules increase the tin content of cargoes and reduce lead and cadmium levels.

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