Tin production in Indonesia is forecast to grow this year, but the national tin reserves are likely to deplete in the next three years caused by rampant illegal mining and no discoveries of new reserves.
Based on historical figures and assuming that there will be no regulatory changes that affect the industry, the Indonesian Tin Exporters Association (AETI) predicts that tin production could reach 72,000 tons this year, up from 63,519 tons last year.
“As you can see we are only in the first half of the year, but our production has reached 42,463 tons,” AETI chairman Jabin Sufianto said during the Indonesia Tin Conference & Exhibition (ITCE) 2017 in Nusa Dua, Bali, on Monday.
Indonesia, as the largest tin exporter in the world, had previously seen tin production dwindle from 2012 to 2016 as a result of sluggish commodity prices and a string of government measures to curb excessive tin mining.
Jabin stressed that the tin production might be impacted this year if the government issued regulations that could hinder production.
One of the regulations that might inhibit production is the moratorium on tin-mining licenses by Bangka Belitung Governor Erzaldi Rosman Djohan recently, aimed at easing the sector’s environmental impact.
The local administration has underlined that it will not issue new mining licenses nor extend existing permits during the moratorium, as it is currently drafting regulations to push environmentally friendly mining methods.
Bangka Belitung is Indonesia’s largest tin-producing province and has brought the country into the position as the world’s second-largest tin producer after China.
However, a crisis in tin reserves is predicted to arise by 2020 regarding the fact that until now Indonesia has yet to find any new tin reserves.
Meanwhile, the mineral resource is facing a challenge because many tin sites, especially in Bangka Belitung islands, have seen massive illegal mining as well as illegal exports, which have eroded the reserves much faster.
“The more tin mined by unconventional miners, the faster tin reserves will decline,” Rudy Irawan, CEO of consultant and investment firm Stania Prima Group said in his presentation during the tin conference.
According to an International Tin Research Institute (ITRI) report in 2013, unconventional mining accounted for more than 50 percent of the national tin production. Most of this was located on shore.
Indonesia’s tin reserves stood at 800,000 to 900,000 tons, just below China with 1,100,000 tons, according to the data from the 2017 United States Geological Survey (USGS) minerals information.
Quoting a study from Widyatmiko in 2012, Rudy said tin reserves in Bangka Belitung would be drained by 2020, assuming that tin production reached an average of 60,000 tons per year.
“However, if the tin production is about 30,000 tons per year, the tin reserves could last until 2033,” he said.
The tin reserves will also be affected by supply and demand.
At present, some countries such as Myanmar and Vietnam are slowly emerging to become tin producers, following in the footsteps of China and Indonesia.
With the additional supply from Myanmar and Vietnam, the tin price will fall, which could suppress mining activities at Bangka Belitung.
“Meanwhile, the high demand from consumers will cause tin reserves to run out faster,” Rudy said
Source: Winny Tang / The Jakarta Post
30 August 2017