Muhamad Al Azhari
Volatility in global commodity prices has yet to affect the balance sheet of state miners Timah and Aneka Tambang, but it has begun to hurt International Nickel Indonesia, a privately owned company that is the country’s largest nickel producer.
Timah, the world’s largest integrated tin miner, still booked an 82 percent year-on-year increase in its nine-month net income, despite weathering a price slump in the third quarter.
The state-owned company notched up Rp 860 billion ($97 million) in net income from January to September 2011. It attributed the strong earnings to a nine-month increase in tin prices on the London Metal Exchange.
“This situation has occurred due to economic crisis in Europe, which has weakened the purchasing power of consumers, especially those based in Europe,” Timah said in a statement.
Timah’s sales margin on tin fell to $3,166 per ton in the third quarter from $5,141 per ton in the second quarter. However, its sales margin rose 113 percent in the nine-month year-on-year calculation.
Timah’s sales margin was $4,895 per ton in January to September this year, up from $2,288 per ton in the same period in 2010. It said the average price of global refined tin was $27,754 per ton. That compares to a record of $33,255 per ton in the first half of this year.
Timah has joined 14 smaller-scale tin producers in Indonesia in stopping exports of the commodity until the end of the year in an attempt to lift falling prices.
Another state-owned company, nickel and gold miner Aneka Tambang (Antam), also booked healthy earnings.
Its net income hit Rp 1.56 trillion in nine months of 2011, up 64 percent from the same period a year ago.
It attributed the strong performance to the increase in sales volume of ferronickel and gold, as well as rising prices.
Sales in ferronickel, Antam’s main source of revenue, were up 37 percent in the first nine months of 2011 from the same period of 2010. Antam made 73 percent of its sales to overseas buyers.
Antam is also building a $450 million chemical-grade alumina refinery in Tayan, West Kalimantan. The company said that construction of the project had reached 34 percent completion by end of September.
The company has a loan facility with the Japan Bank for International Cooperation and a number of other Japanese lenders for the project.
Antam is also preparing to break ground on its $1.6 billion ferronickel smelting plant in East Halmahera, North Maluku.
The privately owned nickel miner, International Nickel Indonesia, which is the country’s largest nickel producer by volume, reported a decrease in net income to $320 million in the first nine month of 2011 from $329 million in the same period a year earlier.
INI cited lower nickel prices in the third quarter as a reason for the drop.
The company recorded an average realized price of nickel of $17,735 per ton during the third quarter of 2011 compared to $19,895 per ton in the second quarter of 2011.
Net sales were $290 million for the three months ended September, a decrease of 26 percent compared to $393 million in the second quarter the year.