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Jakarta Post

Timah to start mass production of rare earth in two years

  • Anggi M. Lubis and Raras Cahyafitri

    The Jakarta Post

Jakarta   /   Fri, October 23, 2015   /  05:57 pm

State-run tin producer PT Timah is on track to building a rare earth metal processing facility next year, with expectations that its first year of operations will increase the company'€™s revenue by around 50 percent.

Timah president director Sukrisno confirmed that the company'€™s rare earth mini plant, a pilot project launched earlier this year, had been a huge success and was ready for large-scale production.

The mini plant, located in Tanjung Ular Mentok, Bangka Belitung, has a capacity to produce 1.5 tons of rare earth minerals.

Timah, he said, would start the construction of a bigger rare earth processing facility next year that would take around 18 months to complete. The planned facility, he said, would be able to produce 500 tons of the minerals per annum.

'€œThe plant will be new and located next to the existing mini one,'€ he told reporters recently.

'€œWe expect the plant to begin operations in 2017.'€

Timah disbursed Rp 35 billion (US$2.56 million) for the mini plant, and Sukrisno said his company might have to allocate around Rp 300 to 400 billion for the bigger facility, which will pioneer rare-earth industry in the country.

Timah corporate secretary Agung Nugroho said the company would work with the National Atomic Energy Agency (Batan) to construct the plant, as the agency had the necessary technologies to produce the materials.

Agung said while investment for the project was relatively low, the minerals had high marketability and offered promising returns, considering that China reserved its rare earth production for its own use.

He added that Timah found the Japanese market particularly prospective, also citing world leading device maker Apple Inc. as potential buyers.

Agung said the company expected its top line to significantly surge thanks to the planned facility, and that a 50 percent increase from its current annual revenue was highly likely.

'€œThe value of the minerals is 10 times higher than tins and that is why we are quite ambitious in this project,'€ he said.

The rare earth facility might help salvage Timah'€™s financial performance, which has been suffering from falling commodity prices, rising costs and export restriction. The company saw its net profit slashed by around 98 percent from Rp 334.6 billion in the first half of last year, to Rp 5.02 billion in the corresponding period this year.

Rare earth comprises 17 minerals commonly used in the manufacturing of parts for hybrid cars, weapons, flat-screen TVs, cell phones, mercury-vapor lights and camera lenses.

China has about a third of the world'€™s rare-earth reserves but supplies about 90 percent of what is consumed. It has placed restrictions on exports, sparking concern among manufacturers from Japan to the US.

With China'€™s export restrictions, high-tech manufacturing countries have been looking for alternatives to reduce dependence on the East Asian country. reported a top minister saying that Apple wanted to invest in tin industries in Bangka-Belitung, with the top cell phone maker pursuing to source legally mining tin, a metal important for its device manufacturing.

President Joko '€œJokowi'€ Widodo, who is slated to begin his five-day working visit to the US on Monday, is scheduled to pay a visit to Apple headquarters in Cupertino, California, to meet with Apple CEO Tim Cook to discuss investment in Indonesia'€™s tin industries.

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