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Oil Report

UPDATE 2-Indonesia's Timah sees tin prices rising over 20 pct

 * Tin prices seen at $20,000/T in 2010 as demand picks up
 * Timah expects tin sales to reach up to 50,000 T in 2010
 * Timah seeks to buy coal mines with 50 mln T reserves
 
 (Adds details)
 JAKARTA, Feb 3 (Reuters) - Indonesia's PT Timah TINS.JK,
the world's largest integrated tin miner, expects tin prices
this year to climb by over 20 percent to reach $20,000 a tonne
as demand recovers, its president director said on Wednesday.
 The miner also expects sales of refined tin to edge up to
50,000 tonnes this year, from around 49,000 tonnes estimated for
2009, Wachid Usman said.
 "We see the market situation is improving this year as
demand is picking up," Usman told reporters.
 Tin for three-month delivery MSN3 on the London Metal
Exchange settled at $16,450 a tonne on Tuesday, down about 2
percent so far this year.
 Prices for the metal, widely used in food packaging and for
soldering electronic products, rose about 58 percent in 2009.
 Usman said the firm is in a due diligence process for coal
mines in Kalimantan in Indonesia's Borneo island, as it looks
for acquisitions.
 "We seek coal mines with reserves at about 50 million
tonnes," he said.
 The firm wants to buy new coal mines because of its falling
reserves. It currently produces between 1-1.5 million tonnes of
coal a year, but reserves are expected to run out within the
next three years.
 Timah's new tin chemical factory in Cilegon, West Java,
which has the capacity to produce 10,000 tonnes tin chemical,
will start production in May 2010, Usman said.
 "All production from the factory will be exported, mainly to
Asian markets such as Japan and South Korea, because they are
industrial countries," he said.
 Timah expanded into coal mining and developing higher-priced
tin products such as tin chemicals and tin solders in order to
diversify its business interests as protection against lower tin
prices.
  (Reporting by Fitri Wulandari and Andreas Ismar; Writing by
Gde Anugrah Arka; Editing by Sara Webb and Amanda Cooper)



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