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August 21, 2008

Yunnan Tin to cut output, suspends smelters in Singapore
China's main tin producer Yunnan Tin will slash production by about 3,000 tonnes in total in July-August due to repairs at plants in China, reported Reuters.

Separately, its joint venture company, Singapore Tin Industries Pte Ltd, suspended its smelter in the city state for a month due to management issues, which it hopes to resolve soon.

"There are internal issues which will be resolved soon. We are reorganising. We don't have any problems with getting raw materials," company director Petrus Tjandra was quoted as telling Reuters.

Tjandra declined to elaborate on the nature of the management issues but said the company had also shut its smelter on Indonesia's main producing island of Bangka, which it jointly owns with local firm PT Bangka Global Mandiri Internasional.

The Indonesian JV produces 15,000 tonnes of tin a year.

"We are negotiating with shareholders. I can't tell you more. It's internal problems which we will resolve soon," said Tjandra, adding that monthly exports from Singapore remained steady at around 500 tonnes.

Singapore Tin Industries, which has an installed capacity of 36,000 tonnes a year, is a joint venture between Yunnan Tin and local tin firm KJP International Pte. Ltd.

Yunnan Tin plans to produce 60,000-70,000 tonnes of refined tin this year but repair works were expected to cut output.

"Prices of raw materials such as ores and coal are high. Therefore, we want to do repairs in July and August," a company director told Reuters from Yunnan province.

Tin miners in China have struggled with low-grade ores in past few years after decades of mining and a lack of new discoveries, reducing supply and supporting ore prices.

The Yunnan Tin director said the firm had not decided whether to resume full operations after repairs are completed in September as demand for tin had declined in China.

China, the world's top producer of tin which is used in packaging and soldering industries, produced 8,394 tonnes of refined tin in July, down 34 percent from June. It mined 4,600 tonnes of tin in July, down 16 percent.

In the first seven months of this year, refined tin output fell 13 percent to 73,290 tonnes. Local mines dug 20 percent less metal, producing 31,200 tonnes.

STI's output has also been limited by supply constraints from its main supplier, Indonesia, which was affected by stricter export rules following a crackdown on illegal mining in Bangka on October 2006.

Tin MSN3 hit an all-time high of $25,500 a tonne on the London Metal Exchange in mid-May, powered by speculative buying on supply worries from main producers China and Indonesia as well as low inventories.

China and Indonesia account for more than 70 percent of world mine output. Indonesia is the second-largest producer.

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