T

he country'€™s largest tin miner, PT Timah (TINS), is setting aside Rp 1.4 trillion (US$144 million) of its internal funds for its spending budget this year as the company plans to acquire two coal mines in South Sumatra and East Kalimantan provinces, and expand its operations to Myanmar.

About 30 percent or Rp 420 billion of the budget would be allocated for its routine operations, while the rest would be used to finance its expansion and development projects, according to Timah president director Sukrisno.

 '€œFunds for the budget will come from our own cash. We also have plans to release some of our assets to generate funds. Just in case we need more, we already have several standby loans that we can use,'€ he said in Jakarta on Thursday.

Sales of the assets, such as land and buildings, are scheduled to take place in the second half of this year and are estimated to generate Rp 1 trillion. As of December 2012, Timah had Rp 670.41 billion in cash and cash equivalents.

This year, the state-owned Timah is looking to seal acquisition deals for two brownfield coal mines in East Kalimantan and South Sumatra, with 40 million metric tons and 60 million tons of coal reserves, respectively. At the moment, Timah has one coal mine in Banjar, South Kalimantan, with an annual production volume of 1 million tons.

After the acquisitions, the company'€™s annual coal production volume will increase to 4 million tons as each new mine will be able to produce 1.5 million tons per year. Sukrisno declined to reveal the acquisition costs, saying the process was ongoing and that Timah expected it to be completed very soon.

For its expansion to Myanmar, Timah has secured a 10,000-hectare tin concession area in Pubyien-Tamok, Tanihary, Myanmar. It will establish two subsidiaries to operate the tin mine and to market the tin products, and it plans to build a smelter in the country.

Timah was currently selecting future partners to form the subsidiaries as they would not be allowed to operate as 100-percent foreign-owned firms, according to Sukrisno.

'€œWe have received a list of potential partners from the Indonesian Embassy in Myanmar and have found two suitable candidates. We are going to send a team there soon to conduct studies,'€ he said, adding that Timah would hold majority ownership in the subsidiaries.

Timah is allocating $18 million of the spending budget for the development of the concession area and Rp 70 billion to Rp 80 billion for the smelter.

This year will also see Timah, a publicly listed company, begin the development of an industrial zone in Tanjung Ular, Bangka regency, Bangka Belitung Islands province. In the first phase, Timah would work on a 100-hectare area while awaiting an additional 500 hectares of land as promised by the Bangka regent, according to Sukrisno.

In 2013, Timah hopes to maintain a production volume of 30,000 tons of tin, around the same volume as last year.

Meanwhile, during an annual shareholders'€™ meeting in Jakarta on Thursday, Timah'€™s shareholders approved a Rp 215.79 billion dividend payment proposal, in which each shareholder will receive Rp 42.87 for every share they have.

The proposal is 51.9 percent lower than the previous year due to lower profits. In 2012, Timah saw its net profits fall 52 percent to Rp 431.57 billion and revenues decrease 10.6 percent to Rp 7.82 trillion from 2011. It attributed the lower results to the falling tin price.

Timah'€™s shares closed at Rp 1,380 apiece on Thursday, unchanged from the day before.