Indonesia police arrest Koba Tin official

PANGKAL PINANG, Indonesia, Feb 16 (Reuters) - Indonesian police have arrested a PT Koba Tin official and a former employee over an alleged illegal mining case in Bangka-Belitung island, Indonesia's key tin source, local police said on Saturday.

The investigation has stopped smelting and export activities at Koba Tin, the second-biggest tin miner and producer in Indonesia.

Central Bangka police arrested the company's manager who was responsible for receiving tin ore and a former employee late on Friday, Djuhandani Rahardjo, chief of Central Bangka police, told Reuters.

"Police found evidence of their involvement in illegal mining by the firm. They facilitated illegal miners to sell tin sands to the firm (PT Koba Tin)," Rahardjo said. "They knew tin ore sold to Koba Tin came from a mining area that does not belong to the firm."

The company was not immediately available for comment.

A crackdown on illegal mining in Bangka island in October 2006 forced dozens of small smelters to cease business, raising concerns about supplies and helping ignite a tin price rally.

Indonesian police said on Friday they would team up with Malaysian police and Interpol to arrest PT Koba Tin Managing Director Kamarddin M.D., a Malaysian national, who might have left the country, after failing to respond to two summons.

Last month, police closed down Koba Tin's warehouse and smelting operation.

This is the second case of alleged illegal mining involving Koba Tin after three directors, including president director Anuar Sidek, were cleared in August 2007 of charges of illegal mining on Bangka-Belitung.