Malaysia Smelting Corporation Berhad (MSC) has commenced construction of a RM10 million rotary furnace at its Rahman Hydraulic Tin (RHT) mine in Klian Intan, Perak. Targeted for completion by 3QFY26, the facility will process approximately 10 tonnes per day, enabling on-site conversion of tin ore into crude tin prior to refining at Pulau Indah.
Rotary Furnace: Operational Impact
The new furnace eliminates the need to transport raw ore over a distance of roughly 400km. Instead, MSC will move higher-value crude tin, reducing haulage volume, logistics costs, and overall transportation complexity while improving processing efficiency at source.
Strategic Rationale
MSC strengthens upstream integration by introducing on-site smelting, allowing better impurity management, shorter processing lead times, and enhanced operational flexibility. The initiative also enables the company to capture additional value within its mining segment, supporting margin expansion over time.
Scale & Limitations
Despite its benefits, the furnace’s annual capacity of about 3,600 tonnes remains small compared to MSC’s total smelting capacity of approximately 40,000 tonnes. The development primarily serves as a cost optimisation measure rather than a significant volume growth driver.
Outlook & Earnings
MSC expects improved cost efficiency and stronger operational resilience post-completion. However, earnings forecasts remain unchanged pending clearer visibility on cost savings and utilisation rates. Contributions are likely to be modest in the near term but margin-accretive over the medium term.
Valuation & Risks
A BUY call is maintained with a target price of RM2.37, based on 13x FY26F EPS of 18.2 sen. Key risks include tin price volatility, geopolitical disruptions, and supply chain uncertainties. Source: Apex Research
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