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Tin Mining Prospects Bullish Since Price Hit All-Time High On Oct 14
 
News From : DagangHalal.com (1/11/2010)

KUALA LUMPUR: The country's languishing tin mining sector has come under the spotlight lately after the price of the commodity hit an all-time high of US$26,900 per tonne on Oct 14.

The prospects for the industry, which contributed about RM2bil to the country's gross domestic product annually, now appeared bullish mainly driven by the consistent consumption globally.

Malaysian Chamber of Mines executive director Muhamad Nor Muhamad said the global consumption for tin was quite consistent although it was hard to predict the future trend of its prices.

"In fact, many brokers and dealers are of the view that the current high tin prices are not reflecting the actual market fundamentals. Prices could have been lifted by speculative buying and the tightness of supply from China and Indonesia due to poor weather conditions," he told StarBiz.

Given the current uptrend in tin prices, the share price of the country's sole tin company Malaysia Smelting Corp Bhd (MSC) reached its highest level this year at RM5.11 on Oct 15, up 34.5% from RM3.80 on Jan 4.

Its subsidiary, Rahman Hydraulic Tin Sdn Bhd, is to date the largest producer of tin-in-concentrate, accounting for about two-thirds of the country's total production.

Last year, a 30-year mining concession was awarded to Rahman Hydraulic for prospecting tin ore and other minerals in a newly identified 14,000ha at Pengkalen Hulu, near Ipoh. The Perak state government stands to receive a 5% royalty from the tin ore and minerals to be extracted.

MSC in September had proposed a secondary listing of its shares on the Singapore stock exchange.

Ho Wah Genting Bhd which is involved in mining activities also saw its share price surging by 55% to 31 sen on Oct 29 from 20 sen at the start of the year. Recently, its unit HWG Tin Mining Sdn Bhd was awarded a 10-year mining lease in 2008 to mine tin and other minerals on a 202ha in Pengkalan Hulu with a potential for a further 202ha as work on the initial area progresses.

According to the Companies Commission of Malaysia, HWG Tin Mining is 51% owned by Ho Wah Genting, 35% by Jiwa Seribu Sdn Bhd, 10% by Majuperak Holdings Bhd and 4% by Multi Prolific Sdn Bhd.

A check by StarBiz revealed that the Perak royalty directly owns a 35% stake in HWG Tin Ming through Jiwa Seribu Sdn Bhd,which is a 100% wholly owned subsidiary of Ras Sdn Bhd.

Ho Wah Genting managing director William Teo told StarBiz the company was set to become a resource-based company as its tin-mining operations would start production by early next year.

The tin mine now has been a hive of activity since its Chinese partner, Nanning Guangxi, transported its equipment to the mine's site in Grik, Perak two weeks ago and began rock blasting on targeted areas.

He said the company was targeting to produce 1,800 tonnes in 2011 and would double the capacity in 2012.

"We have spent RM10mil to get Nanning Guangxi to start the commissioning of our plant.

"In Malaysia, tin miners have previously used the palong method. China is the world's largest tin producer and it has the most advanced technology. We are using the hard rock tin-mining blasting method for our Grik mine," said Teo.

In another development, he said, the company would maintain its existing wire and cable business.

"The business sentiment has picked up and we have return to the black for the current financial year ending Dec 31.

For six months to June 30, the company recorded a net profit of RM4.6mil from a previous loss of RM11.01mil. Revenue increased 67.26% to RM98.02mil.

The company also owns a 35% stake in Hong Kong-listed magnesium producer CVM Ltd, which has dolomite reserves of some 20 million tonnes in Perak. Dolomite is used to produce magnesium.

- The Star Online

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