JAKARTA, Feb 7 (Reuters) - Indonesia's state-owned PT Timah , the world's largest integrated tin miner, said on Monday that refined tin production fell 10 percent last year, although profits more than doubled due to soaring global prices.
The miner's refined tin production in 2010 was 40,413 tonnes, down from 45,086 tonnes in 2009. It posted 802.4 billion rupiah ($89.2 million) in 2010 net profit, more than double its 313.8 billion rupiah ($34.9 million) the previous year.
"The higher net profit was due to higher tin prices," Timah President-Director Wachid Usman told reporters. The firm declined to give production forecasts for 2011.
Timah in December forecast 2010 production at 40,000 tonnes, down from an earlier projection of 45,000-50,000 tonnes after heavy rains hampered mining.
Its refined tin sales in 2010 fell 18 percent to 40,302 tonnes, down from sales of 49,240 tonnes of refined tin in 2009.
The miner also said it expects a 2011 net profit of around 1 trillion rupiah ($111.2 million).
Tin prices have tracked copper to fresh record highs this month, supported by supply shortages from top producer Indonesia.
On Friday, benchmark tin on the London Metal Exchange closed up $655 at $31,200, off an earlier record peak of $31,300.
"The higher tin prices have enticed other miners to come out and start to mine more tin," said an analyst on Timah, who declined to be identified as his firm had not authorised him to speak to the media. "Secondly the weather last year has been playing havoc with the mining.
"Timah's production will probably stay around the level it is," he added. "Timah are looking for the higher premium material ... They aren't focused on spitting out as much tin as possible."
Indonesia, the world's top tin exporter, will limit annual output to a maximum of 100,000 tonnes if record high prices set off a scramble for the metal, a senior mining official said late last month.
"The price is expected to continue increasing this year and will reach its peak by 2014," Usman added. Timah sees 2011 tin prices to be between $25,000-$30,000 a tonne.
A Reuters survey published late in January showed analysts expecting a deficit of 15,000 tonnes in the tin market this year.
The average of 24 forecasts showed the cash tin price would average $27,000 a tonne this year, and rise to $27,419 next year.
Indonesia, which supplies nearly 30 percent of the world's tin consumption, produced an estimated 105,000 tonnes in 2010.
Tin consultants ITRI last month estimated 2010 global tin consumption at 360,300 tonnes, up 12.5 percent.
Demand for the metal, used in electronics, plating and lead-free solders, is seen rising in the coming years, while analysts have for months forecast that Indonesian output will fail to keep pace due to a lack of investment in mining.
In addition, a crackdown on illegal mining since 2006, tighter export regulations, declining onshore reserves and rainy weather have all hindered production in Indonesia.
Usman said the company expected to spend 1.2 trillion rupiah ($133,444,537.114) in investment in 2011.
"They will need to invest more to secure their raw material supplies -- dredges will be the natural choice," the analyst said. "In the total amount that needs to be spent, it's very low." ($1=8,992.500 Indonesian rupiah)