MSCB seeks recourse over termination of tin contract

KUALA LUMPUR: Malaysia Smelting Corp Bhd (MSCB) intends to seek recourse with the Indonesian government on the termination of PT Koba Tin’s contract of working (CoW) on the Bangka Belitung Islands.

MSCB holds a 75% stake in PT Koba Tin, with the rest being held by PT Timah Tbk.

MSCB in a statement yesterday said the recourse might include an appeal process for the reinstatement and extension of the CoW in the regencies of Bangka Tengah and Bangka Selatan.

“PT Koba Tin will also consider other avenues to safeguard its interest,” it added in the statement.

On Wednesday, PT Koba Tin had received the decision of the Indonesian Minister of Energy and Mineral Resources to end the CoW, retrospectively from Aug 31.

MSCB said the company had made full impairment on its investment in PT Koba Tin due to the expiry of the CoW after March 31.

It had stated in the unaudited half-year financial statement ended June 30, 2013, that aside from the ongoing care and maintenance expenses incurred by PT Koba Tin, the company did not expect the non-extension of the CoW to materially affect its operating performance for the financial year ending Dec 31, 2013.

Meanwhile, according to Indonesian news agency Antara, the termination of PT Koba Tin’s CoW was because the company had been suffering losses.

Last year, the company recorded a loss of US$40.9mil (RM131.8mil).

It said the management of the mining area would be temporarily handed over to stateowned company, PT Timah.

PT Koba Tin’s contract was first signed on Oct 16, 1971, and later extended several times until March 31, 2013. – Bernama