The department has prepared a draft amendment that will reduce the royalty, its director general, Anusorn Nuangpolmak, said yesterday. The draft has been examined by the Council of State and the next step is Cabinet approval.

"Reducing the royalty fee will help the private sector gain better returns and spur more investment," Anusorn said.

The royalty on tin concessions is set at a progressive rate that rises if tin prices do. The ceiling is 20 per cent of annual revenues.

Anusorn said that the surge in tin prices from US$8,000 (Bt278,000) per tonne last year to about $15,000 now would also spur private investment in tin mines. He claimed that many tin mines had been shut because prices had fallen, and the royalty rate was too high.

Anusorn said there was still potential for tin mining on islands off the coast of Phang Nga. Last year, tin kept the top spot in terms of ore exports, with Bt6 billion of sales abroad. Ore exports totalled Bt39.5 billion.

An official at the Industry Ministry said Sea Minerals, an 87.3-per-cent-owned subsidiary of Tongkah Harbour, was preparing to invest in a tin mine after recently receiving a concession but was waiting for the royalty to be reduced.

Sea Minerals has a tin-mining concession for 50,000 rai of land about 30 kilometres off the coast of Phang Nga. The company suspended mining in 2005, saying royalties here were higher than in neighbouring countries.

Watcharapong Thongrung

The Nation