Tin Council Considering a New Plan to Resolve Crisis

Officials of governments belonging to the International Tin Council are to consider new proposals today for resolving the 10-week-old crisis in the world’s tin markets.

Officials who have already seen the proposals, formulated before Christmas, said Monday that they call for a new company to be established to take over the tin council’s tin stocks and liabilities.

The crisis in the tin market occurred in October when the council ran out of the money needed to support the price of the metal on international markets.

Tin trading has been suspended on the London Metal Exchange since the council suspended its operations last Oct. 24. Exchange Chairman Jacques Lion has said trading will be suspended at least until Jan. 13.

The tin council owes about $1.23 billion to 16 international banks and other financial institutions, as well as to the brokers who were contracted to buy tin in the market on the tin council’s behalf.

The council’s banker and broker creditors devised the latest proposals for resolving the crisis.

The proposed new company would have risk capital of about $386 million, of which tin council governments would be asked to contribute about $286 million by the end of June, with the remainder coming from brokers and bankers.

The new company would also be financed by a bridging loan, part of which would be guaranteed by the British government, tin council delegates said.

Under the proposals, the new company would buy the tin council’s tin stocks--expected to total 85,000 metric tons at the end of this month once outstanding commitments are met--and then sell them gradually over a three-year period.

Unidentified banking sources said Monday that sponsors of the plan are anxious to avoid the precipitate fall in the price of tin that an uncontrolled release of council tin would cause.

The proposals will also be considered by a full meeting of the International Tin Council when it resumes talks Jan. 14.

The council’s member governments include most of the world’s biggest tin producers, such as Malaysia, Indonesia and Thailand. The biggest consumer member is the European Common Market.

The United States is not a member of the council.