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Group Chief Executive Officer/Executive Director’s Report (cont’d)
and significant investments required to bring new sources of
supply to production.
In summary, our long term view is that the economic
fundamentals of the tin industry remain favourable from both
the supply and demand sides.
InteRnatIonal SmeltIng
BUSIneSS
The Group’s international smelting and marketing business
delivered another year of outstanding performance. Operating
results benefited from an increase in the refining capacity of
our Butterworth custom smelter, expansion in our international
marketing and commercial networks, and enhanced operating
efficiencies.
2011 2010
Production of tin metal (tonnes) 40,267 38,737
Profit before tax (RM million) 68.30 36.33
In 2011 we continued to receive the benefit of our supply chain
transformation and optimization efforts to unlock value from
our existing assets and core smelting business. The supply
chain transformation initiative focused on developing and
implementing responsible sourcing of tin concentrates and tin
bearing materials for our international tin smelting business.
The programme ensures transparency and traceability
along the supply chain particularly in the
Central African countries which provide an
important source of tin concentrates
for our Butterworth smelter. The
Government export ban
in the Democratic
Republic of
Congo (DRC) during the 1st quarter of 2011 due to potential
conflict minerals issues and the regulatory requirements for
export thereafter hampered any significant export of Central
African tin concentrates during the first half of 2011.
We actively participated in constructive engagement with
all stakeholders of the global tin industry including the ITRI,
United Nations, the OECD, ICGLR (international Conference
on Great Lakes Region), the US Government, EICC (Electronic
Industry CItizenship Coalition), other equally important
consumer groups, suppliers, various NGOs, and the various tin
concentrates producing countries particularly the DRC, Rwanda
and their surrounding countries within the Great Lakes Region
of Africa. We have also adopted the internationally accepted
iTSCi (International Tin Supply Chain Initiative) scheme which
has been created and spearheaded by ITRI in which MSC is a
founder member. The successful implementation of the iTSCi
scheme and the due diligence process in Katanga Province,
DRC and Rwanda during the second quarter of 2011 enabled
responsible sourcing of tin concentrates to the Butterworth
smelter from these areas. The iTSCi scheme is expected to be
progressively implemented in other tin producing regions of
DRC, namely the Provinces of Maniema, North and South Kivu
in 2012.
The asset optimization initiative focused on delivering
value from operational improvement. Under this agenda
the Butterworth smelter underwent a major upgrading and
comprehensive maintenance programme. Major improvement
works were undertaken in the gas handling and cooling system,
rotary furnaces, various overhead crane systems and refining
facilities. The substantial progress made in 2011 has led to an
increase in refining capacity as well as an overall improvement
in the smelting and refining efficiencies.
“... our long term view is that the economic
fundamentals of the tin industry remain favourable
from both the supply and demand sides.”
MALAYSIA SMELTING CORPORATION BERHAD (43072-A) • ANNUAL REPORT 2011 25