PETALING JAYA: Riding on the current record-high tin prices, Malaysia Smelting Corp Bhd (MSC) plans to acquire more mining leases around the existing tin mines under its subsidiary, Rahman Hydraulic Tin Sdn Bhd (RHT).
According to executive director and group CEO Datuk Patrick Yong, the global integrated tin producer this year will focus on expanding its mining operation, which is its main profit contributor at the moment.
He told StarBiz that additional capex has been approved for a new processing plant that can provide additional capacity for new mineral extractions and secondary tin processing from MSC’s tailings stockpile.
“This is also expected to bring our mining output from 10 tonnes a day to 14 tonnes a day within the next few years.
“Modernisation using integrated head material processing equipment will enhance production volume as in situ partial ore processing can be enabled, thus reducing the cost of internal transportation of barren material from the mining pit to the processing plants,” added Yong.
Yong noted that the high tin price contributed directly and significantly to the profits of MSC’s mining segment.
“Even the tailings that were left unprocessed in the past, are now valuable feed for secondary extraction.
“Past data have linked the profitability of MSC directly to the tin price, showing a better than linear co-relation, hence we are highly optimistic that the growing demand for tin will only push the performance of MSC higher,” he added.
Yong said the group’s new smelting plant in Pulau Indah near Klang, Selangor has added significant capacity to the smelting capacity and is already being used to smelt ore from tolling customers.
MSC’s old smelting plant in Butterworth, Penang is also used to recover 6,000 tonnes of tin metal trapped in the intermediates accumulated over the years.
“This is a welcome bonus to MSC as the trapped tin has been fully costed in our books,” explained Yong.
Upon full commissioning of the Pulau Indah plant, he said the group will be able to completely retire the old inefficient Butterworth plant.
Yong also described that MSC as most fortunate to perform above expectations in 2021 following the record-high tin prices.
“This has boosted the group’s mining activity income significantly.
“Tin price, which has doubled also boosted profits when we recovered a portion of the trapped tin in the intermediates that accumulated over the past years,” he said.
Yong also does not expect the price of tin to retreat as much in 2022.
He expects that “demand from the electronic sector and electric mobility tipping the supply-demand balance positively for us.
“As MSC continues to retrieve the tin in our huge stockpile of tin bearing intermediates, the good financial performance is expected to flow through over the next couple of years.”
The main challenge faced by the MSC group last year was mostly due to the shutdown by the authorities during the full movement control order.
“Our smelting plant in particular was closed for a few months.
“Then our mines in RHT also faced a period of closure resulting in zero ore production for a couple of months. Externally, disruption in shipping logistics and closure of mines overseas have also impacted supply of ore to our smelter,” he said.
However, these challenges are now over, Yong said, adding that the return to normalcy has enabled mining in RHT to recover and importation of ore for smelting is almost back to pre-Covid days.
He said MSC has well utilised the recovery period to catch up on the backlog in toll-smelting and also to complete commissioning the new smelter in Pulau Indah.
On whether the rally in tin price is sustainable, Yong said “In my opinion, the long term demand for tin has no other direction to grow but northwards.”
The Covid-19 pandemic and the Ukraine-Russian conflict will also come to pass and will only delay, but not stop the march of the zero emission vehicles, where tin will play its role in this energy conversion metamorphosis.
Hence, the price of tin will find a point of equilibrium within the supply and demand balance in due course and will be very unlikely to find any significant decline, he added.