Indonesia scraps Koba Tin's mining permit, company may appeal

SINGAPORE, Sept 26 (Reuters) - Malaysia Smelting Corp Bhd , the world's second-biggest tin producer, said the Indonesian government had decided against renewing a permit held by its subsidiary PT Koba Tin to operate a tin mine.

The government, after a review of the concession, decided not to renew the permit, effective retrospectively from Aug. 31, Malaysia Smelting said in a stock market filing on Thursday.

Before launching the review, government officials had previously said that state-run PT Timah should take over the concession in the Bangka-Belitung islands off the east coast of Sumatra island.

Malaysia Smelting, which is listed in Kuala Lumpur and Singapore, said Koba Tin intended to "seek recourse" with the Indonesian government, which may include an appeal for the reinstatement and extension of the permit.

The company also said it would consider other means to safeguard its interests.

Malaysia Smelting Chief Executive Mohammad Ajib Anuar said last week it could seek international arbitration if the government refused to extend its permit.

He added that uncertainty over the permit and rampant illegal mining on the concession had sent Koba Tin's output down by 70 percent to 1,901 tonnes last year. (Reporting by Eveline Danubrata; editing by Jane Baird)