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tate-run tin miner PT Timah announced Tuesday that it was planning to merge its two subsidiaries, PT Timah Investasi Mineral and PT Timah Eksplomin, this year to boost efficiency amid a slump in global commodity prices.

The company expects to file the proposal at a general shareholders meeting scheduled for Nov. 28. If all goes as planned, the merger will be effective on Dec. 1 this year, Timah president director Sukrisno said.

'€œThis merger will generate a positive outcome for Timah'€™s performance since, through the merger, the company will become more focused on its business,'€ Sukrisno told The Jakarta Post.

Sukrisno said that the main purpose of the merger was to increase the company'€™s efficiency, adding that the strategy was in line with its long-term plans to develop the businesses.

Timah corporate secretary Agung Nugroho said better efficiency would be achieved to generate more profits in the long term thanks to the expected synergy between the two firms.

Agung added with the corporate action would help the company reach this year'€™s tin ore production target of between 26,000 and 30,000 tons, even though global commodity prices have not shown any positive trends.

Timah controls 99.9 percent of shares in Timah Investasi Mineral, while the latter owns a 100 percent stake in Timah Eksplomin.

Tin prices retreated 13 percent on the London Metal Exchange this year, the biggest loser on the bourse, as supplies increased even after Indonesia, the biggest shipper, tightened rules on exports in a campaign to boost the prices. Tin traded at US$19,000 per ton on Oct. 16, the lowest since July 2013 and the price has changed little since then. Analysts predict the glut will persist through 2016.

According to Agung, the merger is a step in the company'€™s action completed in April this year to merge with PT Tambang Timah, another subsidiary that also focuses on tin mining.

Timah'€™s tin ore production reached 14,352 tons during the first half of the year, increasing from 10,187 tons from the same period last year. The company also produced 10,807 million tons during the January-to-June period this year, an increase from 9,613 million tons in the same period last year.

However, the company'€™s sales of refined tin decreased to 9,661 million tons in the first half of this year, from 10,951 million tons in the same period last year.

The average sales price for the company'€™s tin production reached $23,193 per ton as of June, slightly increased from $22,882 per ton in the same period last year.

In the first half of this year, production and sales allowed the company to book Rp 2.75 trillion in total revenues, a 7.69 percent increase from Rp 2.55 trillion in the first half of last year.

The growth of total revenues allowed the company to post Rp 202.75 billion in net profits, a jump of 47.86 percent from Rp 137.12 billion in the same period last year.

In order to meet the high global demand for rare earth metals, the company is currently constructing a Rp 20 billion facility in the Tanjung Ular Industrial Complex in Bangka Belitung.

In Its financial statement, the company also said it would start to produce 50 kilograms of hydroxides per day in the first quarter next year, selling it at the average price of $230 per kilogram.

The production will be mainly exported to European and East Asian countries, such as Japan and South Korea, to supply the needs of electronics manufacturers, it said.

Shares of Timah closed at Rp 1,120 apiece on Tuesday, a 0.44 percent decrease from Rp 1,125 a day earlier.

According to its website, Timah Investasi Mineral was established in 1996 with the goal of developing business in the non-tin mining sector, mainly in coal mining, while Timah Eksplomin, established in 1998, manages mineral exploration as well as advanced research. (gda)