pSingapore, March 11: Indonesia's mines and energy minister has dismissed talk that the gov

Singapore, March 11: Indonesia's mines and energy minister has dismissed talk that the government may impose a quota on tin exports, but said the world's second-largest tin producer after China is determined to end illegal mining.

''There's no quota,'' Purnomo Yusgiantoro told Reuters late on Saturday while on a visit to Singapore.

The market has been rife with talk that Indonesia was considering export quotas to keep tin prices above $12,000 a tonne following a crackdown last year on illegal mining and smelting on the producing island of Bangka, off Sumatra.

Tin has almost quadrupled from a record low of $3,600 in 2002, when persistent Indonesian sales triggered global market oversupply and prevented tin from catching up with a boom in base metals.

''There's a decline in supply because some output did come from illegal mining. We hope everything will be done in a legal fashion in the future,'' said Yusgiantoro.

''Prices have improved to $12,000-$13,000. I think this is good enough. We hope prices will stabilise and we can push up production in the future. Therefore, the government can collect more revenues,'' he said.

Tin hit a contract high of $13,950 a tonne on the London Metal Exchange on Feb. 22, mainly due to concerns over supply from Indonesia.

Small smelters surfaced on Bangka after Jakarta banned exports of tin ore in 2002 to stop illegal mining that pressured prices and damaged the environment.

The smelters competed with PT Timah , the world's largest integrated tin miner, and PT Koba Tin.Koba is 25 percent-owned by PT Timah, with the rest held by Malaysia Smelting Corp. .

Unregulated mining of tin -- used in electronics, plating, chemicals and lead-free soldering -- has pockmarked the island of Bangka. In October, police closed smelters who were operating without paying royalties.

Koba Arrests:

Yusgiantoro said there was no plan to close Koba Tin despite the arrest of three directors, including President Director Anuar Sidek, amid allegations of illegal tin ore sourcing and mining.

''I believe production should go on as usual. We have to uphold the presumption of innocence,'' he said. ''Even if the court decides Koba is guilty, we have to see whether (this) is committed by individuals or is a corporate crime.'' Malaysian Smelting has denied its Indonesian unit obtained tin ore illegally. Koba Tin has suspended tin shipments following police investigations.

Jakarta has issued strict rules for tin exports, including the verification of the source of tin ore by government appointed surveyors, checks on the purity of ingots and proof of royalty payments.

Reuters