Indonesia Timah sees tin output down by up to 10 pct

JAKARTA, Oct 30 (Reuters) - Tin output from Indonesia's PT Timah (TINS.JK), the world's biggest integrated tin miner, may be between 4-10 percent lower than initial targets due to falling prices, the company said on Thursday.

The firm may produce between 45,000-48,000 tonnes of refined tin this year, below the initial target of 50,000 tonnes, Abrun Abubakar, Timah's corporate secretary, said.

"Supply from onshore mining is tight because many miners that supply tin ore have stopped operating because of low tin prices," Abubakar said, adding that wet weather also has hampered mining activity.

The company also sources tin from small miners that are permitted to operate in its concessions.

Prices for the silvery, malleable metal, widely used in food packaging and to solder electronic products, have fallen 40 percent below an all-time high of $25,500 a tonne hit in May along with other metals due to concerns over a global recession.

On Thursday, tin for delivery in three months on the London Metal Exchange MSN3=LX cost $15,400 a tonne.

Last week, the governor of Bangka-Belitung islands, the main source for Indonesia's tin and which produces nearly a quarter of the world's tin, asked small tin miners to stop production temporarily until prices have recovered.

He also asked PT Timah and PT Koba Tin, 75 percent owned by Malaysian Smelting Corporation Bhd (MSCB.KL), to reduce output to a level required to meet contract agreements.

PT Timah and PT Koba Tin are the two largest tin producers on the island.

"We are sticking to our commitment with buyers. If we have a commitment, we will deliver the tin," Abubakar said, adding the company has contracts to sell 42,000 tonnes of refined tin this year.

Indonesia is the world's largest tin exporter after China became a net importer to meet domestic demand.

Tin exports from Indonesia have begun recovering in the past few months after slowing down following a government clampdown on illegal mining in October 2006 in the Bangka-Belitung islands.

Indonesia exported an estimated 75,535.05 tonnes of refined tin in the January-September period this year. There's no comparison for the same period last year, but Indonesia exported 78,744 tonnes of refined tin in 2007. (Reporting by Fitri Wulandari, editing by Sugita Katyal and Ben Tan)