Profit before tax at RM29.8 million in FY2014 was 13% lower
than that in FY2013, mainly attributable to higher mining
costs. In March 2014, RHT acquired an 80% interest in SL Tin
Sdn Bhd (“SL Tin”) a company which had secured a mining
lease of 267 hectares with prospective tin mineralisation
located near Sungei Lembing Town, Hulu Kuantan, in the
state of Pahang for a period of 15 years.
DISPOSAL OF INDONESIAN OPERATIONS AND
OTHER NON-TIN ASSETS
Following the divestment of Bemban Corporation Limited,
the holding company of PT Koba Tin, as well as PT MSC
Indonesia in June 2014, MSC has ceased all operations in
Indonesia. The de-consolidation of the assets and liabilities
after the disposals of its Indonesian subsidiaries has resulted
in some non-cash adjustments which have been classified
under discontinued operations. During the financial year
ended 31 December 2014, the Group carried out a review of
the recoverable amount of its investment in KM Resources
Inc (“KMR”) and recognised an impairment provision of
RM4.2 million. Currently, KMR is in the process of being
wound up.
ITRI TIN SUPPLY CHAIN INITIATIVE (ITSCI)
Significant efforts were expended by MSC during the year to
promote and expand the implementation of the iTSCi due
diligence scheme for the responsible sourcing of metals and
minerals in the Central African countries, at the upstream
end of its supply chain. The iTSCi scheme is backed by all
stakeholders and has been very successful in its agenda to
ensure traceability of tin and tantalum minerals, sourced
from the Democratic Republic of Congo (“DRC”) and
adjoining countries, to ensure that minerals sourced by
the tin smelting industry from Central African countries are
conflict free.
MSC continues to actively engage with all stakeholders
of the global tin industry to promote the concept of
sustainability in its business.
OUTLOOK
As the global commodity industry continued to
remain depressed in the current down cycle, the market
environment for tin will continue to be challenging.
Although the supply side in the global tin industry remains
a thorny and unpredictable issue as artisanal production
operations still constitute a high proportion of world tin
production, MSC will continue to focus on sustainable
improvements in its core operations. This is underpinned by
MSC’s efforts in 2014 to expand capacity at the Butterworth
smelting facility as well as in RHT where a comprehensive
exploration programme is on-going and designed to expand
its tin resource base.
MSC has been through many economic and commodity
cycles and this is a strong testament to its operational ability
to withstand the down cycle and position itself to reap the
benefit from the upswing.
For more information on Malaysia Smelting Corporation
Berhad, please visit
Aerial view of the Rahman Hydraulic
open pit tin mine
29
THE STRAITS TRADING COMPANY LIMITED ANNUAL REPORT 2014
