JunSen Loh's comment on MSC. All Comments

JunSen Loh
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[Humbled Investor]

My pleasure to be invited to attend MSC Investor Briefing today @ 10 March 2021

Overall, Dato Patrick Yong and his CFO are both very knowledgeable and experienced in tin business.

Here are what I gathered:

Mining:

1. With the mining lease extension and the use of new technology, RHT has increased its production from 2,200 MT/year to 3,500 MT/year and is aiming to reach 4,500 MT/year of tin ores annually.
2. Rare earth elements have been identified but remained unextracted in the existing tin mines They are mainly light rare earth which do not contain radioactive materials. Out of 14 rare earth identified, only 4 or 5 rare earth elements are worthy of commercial extraction.
3. In FY2020, without the tin mines closure, Management was expecting the tin mine output to be about 2,600MT/year in FY2020 (Actual: 2,350 MT/year).
4. Management predicts with 11 MT/day (current mining output), the tin mining output in FY2021 will see a significant growth with total mine output to be about 4,000 MT/year.
5. Cost of mining/tonnes is about USD2k – 3k per tonnes.
6. There are almost 7,000 tonnes of tin intermediate (tin that has not finished smelting that is left inside the tin ore at intermediate stage, that was accumulated over the years) waiting to be extracted again, using Butterworth smelter to smelt the residue (additional income here). In general, tin intermediate yields less tin than tin ore.

Smelting:

1. Pulau Indah plant operating costs will be 30% lesser than the Butterworth smelter.
2. Management emphasized that there is no delay in Pulau Indah plant. The plant was commissioned over a year ago at 25% capacity, but it has now increased to 50%.
3. Pulau Indah plant is expected to run at 100% capacity by the end of 2021, not including the maintenance downtime of course.
4. CFO reiterate that there is some misunderstanding between tin smelting capacity (40,000 MT/year) and refined tin output (22,000 MT/year). Tin ore that is being smelted only contain an average of 60-65% of pure tin metal. If you worked out the math, they are currently running at a high utilization rate (almost 100%).
5. When the smelting process gradually relocate from Butterworth plant to Pulau Indah plant, Butterworth smelter will be concentrating in smelting the tin intermediate (which is wholly belongs to MSC) while Pulau Indah smelter will focus on smelting tin ore (including tin import).

Others:

1. Indonesia despite being the top 2 refined tin producers in the world, the tin resources in Indonesia only contributed about 7% of global tin resources as of 2019. It is a possibility that Indonesia tin resources will be run out very soon. (production > resources).
2. Tin resources in China on the other hand, contributed the highest percentage at 38% of global tin resources. However, China’s tin has poorer purity as compared to Malaysia’s tin with only 45% of tin metal found in the tin ores while Malaysia has higher percentage at 65%-75%.

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Violet Tan
Thanks for your info
1 Like · 2 months · translate