SUNGAI LIAT, Feb. 5 -- Indonesian police have shut a tin smelter on the tin-rich island of Bangka, accusing it of illegal mining, and are questioning two smelter officials, police said on Thursday.
The step comes a day after Indonesia's PT Timah <TINS.JK>, the world's largest integrated tin miner, said it expected tin prices this year to climb more than 20 percent to reach $20,000 a tonne as demand recovers.
Police seized 40 tonnes of tin ingots and 62.79 tonnes of tin ore from the Bangka smelter's warehouse, equivalent to 0.5 percent of Indonesian trade officials' estimates of December tin exports of 8,508 tonnes, which nearly doubled from a year ago.
A smelter official was not immediately available to comment.
The crackdown could reduce tin supply from small smelters in Bangka-Belitung islands, Indonesia's main tin islands, after a combination of wet weather and police operations had reduced the supply of tin ore to small smelters there.
Police shut a tin smelter owned by CV Makmur Jaya on Thursday morning on suspicion of illegally processing tin ore obtained from outside the firm's mining area, Norman Widjajadi, head of Bangka police, told reporters.
"We suspect the smelter obtained the tin ore illegally," Widjajadi said. "We are questioning two managers from the smelter."
There were no details of the smelter's production capacity but CV Makmur Jaya is one of 31 smelters with permits to export the metal, which is widely used for food packaging and soldering of electronic products.