TED Case Studies_ MALAYTIN_ Historical Tin Mining in Malaysia

8/18/2019 TED Case Studies_ MALAYTIN_ Historical Tin Mining in Malaysia

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3/3/2016 TED Case Studies: MALAYTIN: Historical Tin Mining in Malaysia

http://www1.american.edu/ted/tin.htm

TED Case Studies: Tin Mining In Malaysia -

Present And Future

Tin Mining In Malaysia

IDENTIFICATIONLEGAL CLUSTERSGEOGRAPHIC CLUSTERSTRADE CLUSTERSENVIRONMENT CLUSTERSOTHER FACTORS

I. Identification

1. The Issue

The tin mining industry was once a major contributor to theMalaysian economy. Indeed, Kuala Lumpur has its origin intin mining. In 1979, malaysia was producing almost 63,000tonnes, accounting for 31 percent of world output. It was theworld's leading producer and employed more than 41,000

people. By 1994, the country's production had fallen to 6,500tonnes, with only 3,000 people employed in the industry.Whilst, Malaysia's production fell by 90 percent over the last15 years, global output fell by only 20 percent. Today, thecountry hardly exports tin as production is used mostly for

the domestic electronic and tinplating industries. The collapse of the tin industry is due to exhaustion of tin deposits, the low tin prices and the high operating costs. But perhaps too much was done to protect itrather than to obselete the industry.

2. Description

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http://www1.american.edu/ted/tin.htm 2

A) History Of Tin Mining In MalaysiaTin mining is one of the oldest industries in Malaya. The tin mining started since 1820s in Malaysia afterthe arrival of Chinese immigrants. The Chinese immigrants settled in Perak and started tin mines. Their leader was the famous Chung Ah Qwee.Their arrival contributed to the needed labour and hence thegrowth of the tin mining industry. By 1872, there were about 40,000 miners in Malaysia, mostlyCantonese and Hakka. In Selangor, tin mining started in 1824. There were about 10,000 Chinese in thestate. The majority of them were Hakka. Kuala Lumpur, like Selangor was similarly developed by thehardworking miners.

Tin was the major pillars of the Malaysian economy. Tin occurs chiefly as alluvial deposits in thefoothills of the Peninsular on the western side. The most important area is the Kinta Valley, whichincludes the towns of Ipoh, Gopeng, Kampar and Batu Gajah in the State of Perak. In fact, alluvial tin ismined in a belt of country stretching from Kedah into the Kinta Valley and along the foothills of Perak,Selangor and Johore. This part of the tin belt and includes the capital of Malaysia, Kuala Lumpur, whichis the centre of another rich tin-mining area.

The expansion of tin mining began in the 1870s, with the commencement of pit-working of tin ladensands in valleys all the way down the West Coast region of the Peninsular. In the Western Peninsular,chaotic political conditions involving war arose between organized Chinese miners, Malay sultans, minor

rulers and villagers. This chaos was the formal precipitating cause of the British "forward movement" inthe Peninsular, which culminated in the establishment of colonial control over the main tin mining Malaystates in 1874. Stable political conditions then enabled a few large Chinese entrepreneurs to establishthemselves much more securely, recruited labor more readily and imported pumping machinery tofacilitate what was still essentially a manual industry, digging holes and extracting the ore by hand.

Growing industrial demand for tin, coupled with the discovery of large and rich tin deposits in Larut andKinta in the state of Perak in the early 19th century led to the disputes among the Malay rulers, largescale immigration of Chinese labour which in turn gave rise to Chinese investment, British interventionand domination and finally, injection of foreign, mainly British capital and technology into thePeninsular.

The British later directed Sir Andrew Clarke to develop a communication system, hence state roads wereconstructed between the principal mining towns. The big step into a modern system of communicationwas taken in 1885 when a 12.8km stretch of railway line was laid from Taiping, which was thedistribution centre for the Larut tin fields, and its port - Port Weld. The first trunk road in Peninsular Malaysia was routed through the main tin mining towns of Seremban, Kuala Lumpur, Ipoh and Taiping.Thus it can be seen that the pioneering work of developing Malaysia was carried out through tin mining.The main purpose of building the communication system was the transfer tin and other resourcesgathered from the states to ports, which will later be shipped back to the United Kingdom.

Tin which is the entrepot trade of the colony have been the source of the prosperity of its upper classesand the home investors and these ownership is shared primarily between the British and the Chinese withthe former holding the major share. Towards the end of the last century the British began breaking in onthe monopoly of tin by the Chinese and the trend has been increasingly toward British control. Before thewar, the British controlled only a quarter of the tin, but with the introduction of the colossal dredgingmachine after the war British production began to mount sharply until in 1929 which is more than half of the total. By 1931 it has risen to 65% of the total. The hand-worked open-cast in Chinese mines areunable to compete with the British dredges. Under the spur of competition the Chinese have madeconsiderable advance in merchandising their mines, but ther are lack of capital for the installation of dredges. From 1928 to 1933, the labor force engaged in tin mining was cut from 119,550 to 51,980. Thisdecline is due to the introduction of dredges. However, the labor force rose again to 64,183 in 1934.


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By 1883, Malaysia had become the largest tin producer in the world. By the end of the 19th century, itwas supplying about 55% of the world's tin compared with the 1992 about 30%.

B) Uses Of TinTin is an important commodity in international trade, but it does not naturally as a metal. Tin is used inhundreds of industrial processes throughout the world. Tin is widely used in many industries such as infood packaging,culinary equipment, electronics, tin chemicals, plumbing solders, engineering alloys,

pewter and bronze in music and the arts, dental amalgams, anti-corrosion and engineering coatings, wine

capsules and fire retardants.

Food packaging and culinary equipmentTin plate is the primary material for food canning and shares the beverage can market with alluminium. Itis also commonly used in bakeware and food storage containers such as biscuit tins, tea caddies etc. Untilthe advent of stainless steel, much food preparation machinery was tin plated to prevent corrosion andadulteration from the base metals and even today items such as copper pans and hand mincers are stillheavily tinned for the same reasons.

ElectronicsThe principal used of tin in electronics is in the used of solders for the joining of electronic components.

But there are many other varied uses in the general electronics field.

Tin chemicalsThe used of tin chemicals is as PVC stabilisers, but besides this they are used in a very wide range of applications, for example as polymerisation catalysts in silicone resins and polyurethane foammanufacture and in ceramic pigments.

Plumbing soldersPlumbing solders containing lead are being replaced by safe tin-silver (usually 96.5 percent tin /3.5

percent silver) or tin-copper(97 to 99 percent tin/ 1 to 3 percent copper) alloys, particularly for drinkingwater systems.

Engineering alloysTin's unique properties is used as an alloy with other metals make it a useful material for a wide range of engineering applications.

Pewter and bronze in music and the artsPewter (an alloy containing about 92 percent tin with small amounts of other metals added for strength)has long been known for its decorative apperance and ease of working as a craft metal. Tin bronzes(alloys of copper with 5-20 percent tin) are renowned for their use in art castings and as bell metals.

Dental amalgams

Dental amalgam contains about 13 percent tin by weight together with silver and mercury. More than7000 million dental fillings using this amalgam are implanted in the USA every year. Mercury-freealternative dental filling materials with double the amount of tin are under development.

Anti-corrosion and engineering coatingsTin and tin-alloy coatings are widely used in the manufacture of bearings and in many kinds of machinery and fabricated parts both for their anti-corrosion and lubricant properties.

Wine capsulesA tin coating acted as a barrier layer in traditional lead-based capsules to prevent contact between thelead and teh wine. Tin-lead capsules are now being replaced with other materials but the most prestigious


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and closest in feel to the traditional capsules, are made from almost pure tin.

Fire retardantsThe smoke suppression properties of tin in the form of zinc stannates make it a desirable replacement for fire retardant agents such as antimony trioxide.

Tin is important in the production of the common alloys bronze (tin and copper) and solder (tin and lead)Tin is also used as an alloy with titanium in the aerospace industry and as an ingredieent in some

insecticides. The United States imports more than one-fifth of the average annual world production of tinMost of the world's tin is produced by Malaysia, Brazil, Indonesia, Thailand, Bolivia and Australia.

C) The Malaysian Tin IndustryThe tin mining industry was once a major contributor to the national economy. In 1979, Malaysia was

producing almost 63,000 tonnes, accounting for 31 percent of world output. It was the world's leading producer and employed more than 40,000 people. By 1984, competition from new lower-cost mines inBrazil had already led to a sharp reduction in both Malaysian and Indonesian output, but the world pricewas sustained until October 1985, when it crashed by 50 percent. The Malaysian industry then shrank rapidly, surpassed in 1988 by Indonesia, which continued to support its mines with large subsidies.Malaysian production, however, has declined further and, for the first time, tin mining rates no mention

in the current national plan.

In 1993, the tin industry continued to be the depressing when the country suffered further contraction intin production, due to the low price of tin, depletion of economic reserves and continuing esclation of overhead costs. The average tin price level in 1993 which stood at RM13.09 per kg. is still far below-even costs of most Malaysian tin mines, even after the implementation of drastic cost cutting measuresand increased operating efficiency. The number of mines has also declined sharply from 852 units in1980 to 43 units as at the end of 1993 and expected to reduce further in 1994.

In 1993, the domestic production of tin also dropped dramatically. The total tin metal exports, whichincluded export of local tin and re-export of foreign tin, also dropped and the total export value of tin

metal in 1993 amounted to RM 488.9 million. The main export destinations in 1993 continued to beJapan , South Korea and Netherlands.

The Industrial Master Plan (IMP), launched by the Government in 1986, the Tin Industry (R&D) Boardhas been entrusted to promote the development of the dowmstream tin-based manufacturing industry inMalaysia. In this context, the Malaysian Tin Products Manufacturers' Association (MTPMA) was set upin early 1989 to promote and protect the interests of the dowmstream tin-based manufacturing sector inMalaysia.

Today, the tin of price has dropped to a low of approximately US$13-14 per kg compared to a high of

US$29 per kg during its heyday. This price is no longer economical for most mines to operate,contributing to the demise of the tin industry in Malaysia as a whole, with the exception of a fewrelatively low-cost operators. (Cheang,K.K (1998), "The Asia-Pacific's Energy and Mining Magazine",

May 1998, p.70-73)

At present, the tin-based manufacturing industry in Malaysia consists of three main product sectorsnamely solder, tinplate and pewter. Domestic consumption of locally refined tin metal increased from4,569 tonnes in 1992 to 5,196 tonnes in 1993. Despite some progress made in the local downstrean tin-

based manufacturing industry as reflected by the modest growth in the domestic tin metal consumption,the industry is at present still relatively small in terms of its contribution to the nation's manufacturingvalue-added activities. However, potential for the advancement of the industry is considerable, especially


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in the field of tin chemicals.

D) The International Tin Agreement

Of all commodities, tin is probably the one where conditions are most conducive to the success of acommodity agreement. There are relatively few major exporters, tin is important to all of them.

The bulk of the world's tin is produced by Malaysia, Indonesia, Thailand and Bolivia. The largest producer is Malaysia. The country most dependent on tin is Bolivia. The most important uses of tin are incans and in solder. Substitutes, such as plastics and aluminum, have become more andmore important forcontainers, while the resmelting of tin scrap has increased.

International attempts to regulate the tin market began back in the 1920s because of the depressed pricescaused by an oversupply of tin after World War I, the main producing firms established voluntary

production quotas. The members of the agreement accounted for about 90% of world output. Theagreement was successful in supporting prices, but this success induced expanded operations by "freeriders", tin producers who did not participate in the agreement even though they benefited from thehigher prices it brought about. (Christopher L.Gilbert, 'International Commodity Agreements')

Every five years, a new agreement came into being, with the most recent being the 1981 SixthInternational Tin Agreement, which included 22 producing and consuming nations. The agreement setfloor and ceiling prices and provided for a Council to oversee operations. There was a buffer stock (usually about 15% of world production), whose manager bought and sold tin to keep the world price

between the floor and ceiling. The Council also set export quotas and levied fines on members whoviolated them. The floor and ceiling prices had to be changed repeatedly and the buffer stock had beendepleted several times. Nonetheless, there was modest success in limiting price fluctuations.(Christopher

L.Gilbert, 'International Commodity Agreements')

In the early 1980s, the price of tin began a long downward slide. Consumers were tempted to substitute

for tin. Production expanded greatly in Brazil and China while Malaysia tin production is started todecline.

E) Methods of MiningMalaysia has used several types of mining methods in the tin mining industry. There are dredging, gravel

pump, open cast, dulang washing and underground mining.

Dredging is one of the more common method of tin mining. It can be applied on low-lying areas withalluvial tin deposits. A dredge is a like platform which floats on an artificial lake. Dredging can be usedto mine deposits found near the surface in areas prone to flooding. It is an efficient method of miningaluvial tin and is very expensive.

Gravel Pump is the most common method of extracting alluvial tin deposit in Malaysia. This methodinvolves spraying high-pressure jets of water on rocks containing tin ore and breaking them up. The tin-

bearing material is then washed dowm a depression called a sump. A pump brings the material up a palong, a gently sloping wooden structure which separates tin from other materials. The procedure of extracting tin is simple. As the tin-bearing materials flow down the palong, wooden bars across the

palong, called riffles traps the heavier iron ore, leaving the rest of the material to be dumped as tailings.


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Old mines in Malaysia are have been successfully converted into housing estates. Also with the growthof tourism, old mines are opened to allow tourist to get the taste of life in the olden days. Old minestherefore do not go to waste. Instead, they are given a new profitable use.

G) Collapse Of Tin Mining Industry In MalaysiaThe downfall of the tin industry is not just a result of the price drop, but also due to the escalating costsof energy, skilled manpower, environmental constraints and land availability in comparison with other

industries, which may get a higher priority for development over mining. Examples include theconstruction, electronics, manufacturing, information technology and agriculture. Tin have lost itsglamour within the last decade because tin is being tarnished easily compared to gold. Gold is fastregaining some of its glitter.

Collapse of tin mining industry is due to:

1) Falling in tin prices

2) In the food packaging industry, substitutes like aluminium, paper and plastic were used insteadof tin.

3) People's awareness of environmental problems led them to recycle tin scraps and this further reduced the demand of tin.

4) The rising cost of production.

5) Rising energy cost raised the cost of mining to make it less profitable.

6) High taxes were imposed on the amount of tin produced.

7) Little land set aside for mining.

8) Fewer areas were set aside for mining because of competition from profitable use of land.

The tin start decline in 1988 which is 4.9 percent decline of the output. However, the tin output grewabout 3.8 percent to 32,034 tonnes in 1989. Malaysia is still the world's largest producer of tin, but outputis unlikely to ever regain the 1980's level of 61,404 tonnes annually. In cooperation with other tin

producers, Malaysia agreed to limit its exports as part of a program to assist the market's recovery fromthe 1985 collapse of the International Tin Council. Higher tin prices and falling stocks may bring an earlyend to the restrictions. (http://www.abisnet.com/malaysia_1.htm#Mining)

3. Related CasesGEDDES: Canada Copper Mining

Mining In Papua (New Guinea)

Bolivia Gold Mining

Brazil Gold Mining and Environment

http://www.american.edu/projects/mandala/TED/bragold.htmhttp://www.american.edu/projects/mandala/TED/bolgold.htmhttp://www.american.edu/projects/mandala/TED/PAPUA.HTMhttp://www.american.edu/projects/mandala/TED/GEDDES.HTM


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4. Draft Author: Rebecca Lau Wuan Chin, July 1999

EMAIL ME

II. Legal Clusters

5. Discourse and Status:

Agreement and Complete

6. Forum and Scope:

Malaysia and Unilateral

7. Decision Breadth:

1 (British Empire)

8. Legal Standing:

Law

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: Asia

b. Geographic Site: East Asia

c. Geographic Impact: Malaysia

10. Sub-National Factors:

No

11. Type of Habitat:

Tropical

mailto:[email protected]


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IV. Trade Clusters

12. Type of Measure:

Regulatory standards - on import and export

13. Direct v. Indirect Impacts:

Direct

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: Yes

b. Indirectly Related to Product: No

c. Not Related to Product: No

d. Related to Process: Yes

15. Trade Product Identification:

Tin

16. Economic Data

TABLE : TIN STATISTICS OF MALAYSIA

Item 1970 1980 1989 1990 1991 1992 1993 1994

Tin (Tonnes) Iron Ore (Tonnes) Gold (raw) *(Grammes) Bauxite (Tonnes) Ilmenite (Tonnes) Copper Concentrates (Tonnes) Coal (Tonnes) Kaolin (Tonnes) Limestone (Tonnes) Silica Sand (Tonnes) Silver (Grammes)

73,795 4,420,083

161,023 1,121,318

219,095 1,202

n.a 3,274

n.a n.a

n.a

61,404 371,186

2,049,876 920,356 199,486 114,222

n.a 46,324

n.a 145,475

n.a

32,034 99,773

2,859,549 355,174 520,147 101,471 118,196 108,347

9,500,000 508,618

12,686,306

28,468 293,206

2,594,526 398,180 530,237 101,931

94,229 152,972

11,042,649 641,474

12,555,654

20,710 354,869

2,762,600 376,418 308,061

98,313 54,861

186,699 3,407,102

574,917 13,439,533

14,339 314,819

3,540,053 330,593

56,453 111,593

74,483 244,573

3,684,446 536,426

15,325,265

10,384 222,848

4,462,686 68,824 57,501

104,802 263,604 249,852

2,362,622 335,459

14,007,591

6,458 202,602

4,086,067 161,919

811 106,468 173,740 252,628

2,748,271 230,756

13,061,416

From the table, tin no longer plays an important in Malaysia's local produce. In 1970, tin was ranked 4thin productions but in 1994, it fell to an annual production of only 6,458 tonnes behind 7 other products.This significant drop meant that tin was no longer an important economy for Malaysia.


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Domestic production of tin dropped dramatically to 10,384 tonnes in 1993 as compared to 14,339 tonnesin 1992 and 20,710 tonnes in 1991, way below the post war peak of 73,795 tonnes in 1970.

TABLE : THE FLOW OF TIN MINING INDUSTRY IN MALAYSIA

Year

Production

(Tonnes)

Import

(Tonnes)

Export

Tonnes)

Average Price

(RM/kg.)

No.of

Mines Employment

1970 1975 1980 1989 1990 1991 1992 1993

1994

73,795 64,364 61,404 32,034 28,468 20,710 14,339 10,384

6,458

13,726 18,476 8,422

23,857 21,732 30,536 33,264 27,277

35,574

92,631 77,940 69,498 49,480 52,703 42,425 45,149 35,545

35,327

10.99 15.94 35.72 23.09 16.45 15.05 15.25 13.09

14.14

1,083 910 852 255 141 92 63 43

39

49,453 39,736 39,009 12,695 8,508 6,594 4,672 2,296

2,006

This table shows that the impact tin mining has on Malaysia's economy. In the 1970s, tin miningemployed 49,453 people in total but in 1994, that amount dropped to a mere 2,006 employees.Meanwhile, Malaysia also started importing more and more tin from other countries until finally in 1994,its import of tin exceeded its export of tin.

The year 1993 continued to be the depressing one for the tin industry when the country suffered further contraction in its tin production, due to the low price of tin, depletion of economic reserves andcontinuing esclation of overhead costs. The average tin price level in 1993 which stood at RM13.09 per kg. is still far below-even costs of most Malaysian tin mines, even after the implementation of drasticcost cutting measures and increased operating efficiency.Total tin metal exports, which included exportof local tin and re-export of foreign tin, dropped from 45,149 tonnes in 1992 to 35,545 tonnes in 1993.Total export value of tin metal in 1993 amounted to RM 488.9 million. The main export destinations in1993 continued to be Japan (8,288 tonnes), South Korea (4,627 tonnes) and Netherlands (4,285 tonnes).

(Tables quoted from : http://www.geocities.com/RainForest/8643/case.html)

17. Impact of Trade Restriction:

18. Industry Sector:

19. Exporters and Importers: Many countries

V. Environment Clusters


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20. Environmental Problem Type:

The main problems caused by tin mining are namely formation of wasteland, damage to naturaldrainage, pollution and the destruction of natural habitats.

i) Formation of Wasteland Mining oftens damages lands and creates wastelands. Wastelands are lands which are not able to support

crops, unstable to build industries, factories on, unsuitable for transport....in short, unuable.Mining affects the land during mining, large amounts of vegetations are removed to prevent obstacles totin mining machineries which may hinder work progress. Subsequently, soil erosion occurs and this leadsto the formation of large gaping holes in the groung. Rainwater fills up this hole and mining pools areformed. This mining pool contains large amounts of tailings left behind by alluvial mining which have

been completely leached of most plant nutrients. These pools are therefore unable to support any formsof living things and areas like this becomes barren.

ii) Flooding and Disruption to River FlowDisruption to river flow refers to how a river cannot continue its original flow because of obstacles alongthe way. This results in flooding in the area where it occurs.

When there is heavy rainfall at an abandoned mine, the tailings are washed into rivers together with therain. The rivers then become silted. This leads to flooding in river valleys downstream.In hilly areas, when the rain falls on great heaps of tailings, the hill slopes become unstable andlandslides occur. Because of this, large amounts of soil and rock fall into riverbeds, decreasing the river capacity and causing flooding.

iii) PollutionPollution caused by tin mining happens in two different ways :-

a) When tailings from tin mines are washed into a river, the river becomes polluted. The pollutionresults in the water being unpure and unsuitable for consuming purposes.

b) During the smelting of tin, fuels are burnt for heat energy, thus adding pollutants into theatmosphere.

iv) Destruction of Natural HabitatsPlant and animal habitats are often destroyed too. An example of this is how mangrove and coral habitatshave been damaged in parts of Malaysia, possibly as a result of tin mining near that area.

Land damaged by mining can be restored. The restoration work can be developed into different sections.

Firstly, gaping holes can be filled up completely with non-poisonous waste. If mining pools have alreadyformed, then they can be shallower and then converted to lakes or ponds for recreational purposes. Anexample of this is Clearwater Sanctuary Club in Perak, Malaysia which was converted from a former tinmine.

Secondly, the heap of mining waste must be levelled. Some of the non-poisonous soil is used to fill upgaping holes formed in the ground. However, soil which are poisonous must be treated with chemicals.This process known as Chemical Treatment treats the soil by adding acidic substances into the soil toneutralize the effect of alkaline on it.


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Thirdly, vegetation is replanted to protect the soil against wind and rain. Fertilizers are also added tofertilize the land for farming purposes.

21. Name, Type, and Diversity of Species

Name: N/A

Type: N/A

Diversity: N/A

22. Resource Impact and Effect: Regulatory

23. Urgency and Lifetime:

24. Substitutes:

VI. Other Factors

25. Culture:

26. Trans-Boundary Issues:

27. Rights:

28. Relevant Literature

http://www.geocities.com/RainForest/8643/history.htmlhttp://www.geocities.com/RainForest/8643/uses.htmlhttp://www.geocities.com/RainForest/8643/methods.htmlhttp://www.geocities.com/RainForest/8643/case.htmlhttp://www.geocities.com/RainForest/8643/hazards.htmlhttp://www.geocities.com/RainForest/8643/recover.htmlhttp://www.geocities.com/WallStreet/1369/Recreat.htmhttp://www.geocities.com/WallStreet/1369/Invest.htmhttp://www.cwsgolf.com.my/cws/history.htmlhttp://www.abisnet.com/malaysia_1.htm#Mininghttp://www.kpu.gov.my:1025/commodities/txmine.htmlhttp://www.unu.edu/hq/unupbooks/80893e/80893E04.htmhttp://www.unu.edu/hq/unupbooks/80893e/80893E03.htmhttp://www.suash.com/malaysia.htmlhttp://www.mining-journal.com/mj/MJ/16apr99.htmhttp://www.asiawind.com/pub/forum/fhakka/mhonarc/msg00835.html


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http://www.asiawind.com/pub/forum/fhakka/mhonarc/msg00836.htmlCheang,K.K (1998), "The Asia-Pacific's Energy and Mining Magazine", May 1998, p.70-73Christopher L.Gilbert, 'International Commodity Agreements

TED Case Studies_ MALAYTIN_ Historical Tin Mining in Malaysia

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