Asia Dive News : Indonesian divers discover hijacked tin shipment

Indonesian navy divers have discovered a shipload of refined tin worth $4.7 million that was hijacked by pirates late last month, and the owner - PT Koba Tin - is salvaging the cargo, officials said on Thursday 20th.

The vessel M.V. Prima Indah, which was carrying 660 tonnes of tin produced by Koba when it was attacked en route to Singapore, was spotted last week on the sea bed off Bangka, the Indonesian island where it began its journey.

Crew members were unharmed but the incident was the second tin seizure in Indonesian waters this year. On the same route in April, pirates hijacked a cargo of at least 575 tonnes, estimated to be worth about $4.6 million and since retrieved by its owner. "We don't understand why the pirates sank the ship. There are a lot of questions but we cannot speculate," said Noel Choong, who manages the International Maritime Bureau's Southeast Asian piracy reporting centre in Malaysia.

A Koba Tin official on Bangka, where most of Indonesia's tin is mined and smelted, confirmed the cargo had been discovered but declined to give more details.

Koba Tin is owned by Malaysia Smelting Corp. Bhd. <MSCB.KL> and is Indonesia's second-largest producer of the metal used in electronics and as a lead-free substitute in solder. State-run PT Timah <TINS.JK>, the country's top producer, has a 25 percent stake in Koba.

"The company is now in the process of salvaging the ship and the cargo," said Choong, adding it was unclear whether the cargo was damaged. The amount is equivalent to about a third of Koba's monthly output.

Security Risk
Indonesian waters are seen as a growing security risk, with the International Maritime Bureau saying nearly a third of 325 reported cases of piracy in 2004 took place there.

The Malacca Strait between Indonesia and Malaysia carries a quarter of global trade and nearly all oil imports for Japan, South Korea and China. There are fears the pirate-infested waterway could become a target for a terrorist attack.

Metal dealers said the motives behind the hijacking were unclear, as it happened when the price of tin was suffering from slow demand, an increase in supply from Indonesia and a sell-off by investment funds.

Tin <MSN3> was trading at $6,350/$6,425 a tonne for delivery in three months on the London Metal Exchange after falling on Wednesday to a 10-month low of $6,100 a tonne.

"Those pirates may have a buyer or they may have a way to sell the tin. This is the second attempt after the first one failed, but there must a be a reason why they sank the ship," said one industry source in Malaysia.

"It's not so easy to sink a ship," he added.

The stolen tin would probably have been destined for consumers in East Asia or Europe, dealers said.

"I don't think the pirates aimed to sell the tin to Malaysia, because people here will easily recognise the cargo. They may want to sell it to China or elsewhere," said another trader in Malaysia.

Dealers added the hijacked ship was discovered about 35 metres below sea level.

Source: Reuters