Indonesia court finds Koba Tin's head not guilty

SUNGAILIAT, Indonesia, June 19 (Reuters) - An Indonesian court has found the head of PT Koba Tin, the country's second-biggest tin smelter, not guilty of illegal mining in a protected forest, court and company officials said on Friday.

Kamardin Md Top, president director of Koba Tin, was detained in mid-February after an investigation by the forestry ministry into the company's mining activities in the Bangka-Belitung islands, Indonesia's main source of tin.

He was alleged to be responsible for damage to tens of hectares of conservation area in Central Bangka regency, due to the operation of a tin dredge.

"Charges against the defendant were unfounded. Permits for operation of the tin dredge were legal," Tjahjono, the head of the Sungailiat court, about 80 km (50 miles) from Pangkal Pinang, the provincial capital, told reporters after the trial late on Thursday.

Malaysian Smelting Corp Bhd (MSCB.KL), which owns 75 percent of Koba Tin, said in a statement in February that the company's tin dredge had ceased operations in that area in October 2002 because reserves had been exhausted.

The company also said Indonesia's forestry ministry only issued a declaration regarding designation of forest areas covering about 657,510 hectares in the province on Oct. 1, 2004, which included part of the Koba Tin mining areas.

Raja Ulung Padang, the head of Sungailiat district attorney office, said his office will appeal to the higher court.

The prosecutors had demanded a jail sentence of five years and a fine of 100 million rupiah ($9,760).

Darmansjah, Koba Tin's spokesman, confirmed that Kamardin has been cleared of all charges.

This was the third case of alleged illegal mining involving Koba Tin. In August 2007, three directors, including president director Anuar Sidek, were cleared of charges of illegal mining on the Bangka-Belitung islands.

In early 2008, the police closed the company's warehouse and smelting operations for several weeks due to investigations into alleged illegal mining.

A series of investigations by the authorities in the Bangka-Belitung islands, source of nearly a quarter of the world's tin, had disrupted supply in early 2007 and 2008.

Indonesia's state-owned PT Timah Tbk (TINS.JK), the world's largest integrated tin miner, owns 25 percent of Koba Tin. ($1=10245 Rupiah) (Reporting by Dwi Sadmoko in Sungailiat and Fitri Wulandari in Jakarta, editing by Sara Webb)