Tin export moratorium sinks as conflict mars industrial union

Opening the floodgates: In this photo that was taken on June 28, miners separate sand from tin ore in the Sungai Liat area, Bangka. The ban on spot exports of tin from Indonesia has been breached this month due to conflict inside Indonesia Tin Association. BloombergThe Indonesian Tin Association (ITA) has buckled under maneuvers to destabilize the growing alliance between producers, as shown by the infighting between members, ousted association executive chairman Rudi Irawan says.

Hidayat Arsani, the president of the association, said on Saturday that 25 of the 28 members within the association agreed to remove Rudi.

The news came after reports that certain members of the association defied a pact to halt tin exports in order to re-energize sagging global prices.

However, Rudi refuted the news of his dismissal, saying that the association had not directly informed him of the decision. Instead, he is questioning the power play behind his removal.

Rudi questioned the mechanism for his dismissal as the association had yet to form clear statutes, which would also cover dismissals, within the association.

“How can they dismiss me when there are no statutes?” he said, adding that he had not overstepped his mandate as he would consult with the association’s members before making a decision on how to respond.

Hidayat reportedly said that Rudi was dismissed for acting and making statements not condoned by the association. Rudi refuted the accusation, saying he always included association members in all decisions.

Rudi suspected that his dismissal was part of a campaign by people who were resistant to a strong
association.

“These are parties that would suffer if the association is solid,” he said, adding that the people included “fund managers”.

Rudi declined to name those who would feel threatened by a stronger association, or if those who made the move to oust him were the same members who broke the agreement on the moratorium on tin exports.

Association members previously decided to halt spot shipments of metal from Oct. 1 to Dec. 31 in an effort to push global prices back to US$25,000 per metric ton by depleting stocks at warehouses monitored by the London Metal Exchange (LME).

Indonesia, with an export volume of 92,487 tons last year, is the second-largest tin producer after China.

According to Bloomberg reports, on Dec.13, tin volume was at its lowest level since April 2009 with 11,580 tons. Inventories rose slightly to 12,200 tons as of Dec.16.

Refined-tin shipments fell to 2,202 in November from 5,442 tons in the previous month, trade ministry data revealed. Shipments were 8,986 tons a year earlier.

Meanwhile, Abrun Abubakar , the corporate secretary of the Indonesia’s largest tin producer PT Timah, said that he could not comment on the dispute within the association as there were no precise rules of how the association was supposed to work.

“There is no mechanism of becoming a member or resigning,” he said.

Commenting on the alleged breach on tin exports for the spot market, Abrun said the export ban had failed to boost tin prices.

“It seems that agreement on the export ban is ineffective because tin prices remain low. Tin producers need funds for their operations,” Abrun said in a text message to The Jakarta Post.

He said that PT Timah would continue to halt exports on the spot market due to the low price.

“No matter whether there is agreement on the export ban on the spot market or not, we will continue to halt exports as long as the price is low,” Abrun said. (rcf)