JAKARTA (Reuters) - Indonesia’s stop-start tin exports are set to continue beyond next month, industry officials said, with miners struggling to adapt to a second wave of export rules in as many months.
Indonesia, the world’s top exporter of the solder material, introduced new rules for shipments from Aug. 1, which resulted in no shipments throughout August as companies awaited export approval from the central government.
With around nine companies having since been granted clearance, the industry is now facing a second wave of rules with all tin exporters requiring “clean and clear” (CnC) certification from Nov. 1.
Any further impediment to the flow of the base metal could provide support to benchmark prices which are currently trading at $15,385 a tonne and have eased 21 percent this year.
“If miners aren’t mining properly, they won’t get CnC certification,” said Agung Nugroho, corporate secretary at the country’s top tin miner PT Timah, adding that many firms are ramping up exports ahead of the November deadline.
PT Timah had already achieved CnC clearance for more than half of its concession areas and expected to complete the remainder before Nov. 1, Nugroho said.
Jabin Sufianto, president of the Indonesian Association of Tin Exporters (AETI) said “not a lot” of his members had received CnC approval but did not elaborate further.
Unlike PT Timah, many of Indonesia’s tin miners will fail to get CnC clearance, said Nugroho, adding that exports would be about 2,000-3,000 tonnes in November, compared with around 80,000 tonnes for the whole of 2014.
Weak benchmark prices and the new export rules will reduce Indonesia’s 2015 tin exports to 60,000-65,000 tonnes added Nugroho, with PT Timah’s exporting 26,000-28,000 tonnes.
PT Timah has stopped spot sales and is now only making “small quantity” contracted sale shipments until prices rise to about $17,000 per tonne, said Nugroho, reiterating his earlier comments.
In order to get CnC certification, tin producers must prove to either provincial or the central government that its mining activities do not encroach into other mining concession areas, that it uses environmentally friend and sustainable mining practices, and that no taxes and royalties are outstanding.
The new rules by the central government are another move to crack down on environmental damage and smuggling, and to enforce payment of royalties and taxes on shipments.
The Southeast Asian country is concerned about the scale of illegal tin mining and smuggling, while green groups and electronics firms have expressed worries over the environmental damage it can cause.
Editing by Michael Perry
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