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ubliclylisted tin miner PT Timah plans to allocate at least US$100 million to build two new bucket wheel dredgers (BWDs) as part of the company’s program to increase tin ore production from offshore mining.

Timah corporate secretary Abrun Abubakar said that the company was preparing a detailed engineering design for the BWD.

“We will soon open the bidding for the design works to interested parties, both local and foreign BWD producers,” Abrun told The Jakarta Post over the telephone on Monday.

According to Abrun, Timah currently has no BWD. He said that Timah expected that the tender process would be completed this year as the company expected the two BWD to be ready for operation in 2014.

Besides investing in new BWD, Timah is also carrying out modifications on one of its 11 bucket ladder dredgers (BLD). Only seven out of its 11 BLDs are in operation. A BWD dredger uses new technology that enables it to carry out mining activities at a depth of up to 70 meters. The BWD ship’s dredging capacity is two times higher than that of BLDs.

“The modification needs about Rp 180 billion [$20.16 million]. This is a new technology and we hope to be able to try the modified BLD in the second half of this year. If the modification succeeds and performs well, we will continue to modify other BLDs,” Abrun said.

Timah is also planning to have five more cutter-suction dredgers.

“We are performing feasibility studies of the plan. We need to be sure of our tin reserves, because it will be useless if we have more cutter-suction dredgers but we don’t know where they will operate,” Abrun said.

According to a file available in its recent public presentation, Timah had 1.03 million tons of tin resources and 394,583 tons of tin reserves in 2010. The proven tin reserves are estimated to be available for mining for up to the next 20 or 30 years.

Abrun revealed that Timah, which already has 10 cutter-suction dredgers, would rely on its subsidiary PT Dok & Perkapalan Air Kantung to build the dredgers.

According to Abrun, Timah will require about Rp 30 billion to 35 billion for each cutting-suction dredger.

All spending for dredgers will come from Timah’s capital expenditure. Abrun said that the company had not decided the exact amount of its capital expenditure for 2012. Timah president director Wachid Usman said recently said that the expenditure would be around Rp 2 trillion.

The company needs more dredgers to support production from marine mining. Wachid said that his company planned to focus more on marine tin mining in anticipation of the decline in land-based mining.

“There are various issues, including illegal tin mining that is destroying Timah’s reserves, which are overlapping the utilization of lands, giving rise to a long process to get permission for mining in forest areas,” Wachid said.

Timah estimated that tin production reached 33,000 metric tons in 2011. The company aims to boost production to between 40,000 42,000 metric tons this year, according to Abrun.

“We expect more tin from marine mining this year,” he said. (rcf)