Small Indonesia smelters may resume work by end-Jan

By Dwi Sadmoko

PANGKAL PINANG, Indonesia, Jan 9 (Reuters) - Some small smelters in the Indonesian islands that produce a quarter of the world's tin will resume work by month-end, after a three-month halt caused by rain-hit operations and low metal prices.

A drop in tin prices had cut margins for small smelters and prompted the governor of Indonesia's province of Bangka-Belitung to order small tin smelters to temporarily stop production last October.

Although the governor allowed them to resume operation in December, in a bid to protect the livelihood of local miners, some smelters have yet to begin work.

"We have not started operation yet," Ismiyardi, commissioner of PT Bangka-Belitung Timah Sejahtera, a consortium of 9 small smelters, said on Friday.

"We are still cautious because tin prices are still fluctuating and it will affect our production cost."

The wet season crippled operations because miners could not collect ore, squeezing raw material supplies, he said, adding that the consortium planned to produce 2,700 tonnes of refined tin when it resumed operations by the end of January.

The price of tin, used in food packaging and soldering of electronic components, has fallen 55 percent from an all-time high of $25,500 a tonne hit last May as global economic weakness chews into industrial activity.

On Thursday, the price of the silvery, malleable metal stood at $11,400 a tonne on the London Metal Exchange.