Timah estimates output to reach around 70,000 tonnes this year, said Alwin Albar, operational director at Timah.

The increase follows a change in regulations last year that allowed the company to acquire output from illegal miners within their concessions.

"We are actually trying to hit the brakes amid this sluggish tin market," Albar said in an interview in Pangkalpinang on Bangka Island.

Company data showed Timah produced 33,444 tonnes of refined tin in 2018.

He said activities at the company's Batu Besi mine in neighbouring Belitung island has now been cut to eight hours from a normally non-stop 24-hour operation.

Prices of tin in London has dropped to below $18,000 per tonne this month, down from one-year highs at $21,800 a tonne in February.

In 2018, Timah's average selling price was $20,205 per tonne.

Albar, who is also chairman of Indonesia's tin exporters association (AETI), declined to give company's price estimate for the rest of the year but said he saw the current downturn in global tin prices as short term.

He said electric vehicles would be a future demand boost.

"Tin is already being used in automotives, but the portion of use will be much larger in EVs, not to mention in the batteries," Albar said. "There will be jump in demand."

International Tin Association, said in a report in February, that lithium-ion batteries could grow to represent a significant new use of tin in 2025-2030.

In Indonesia, the government is pushing for development of plants for EVs and components to create a downstream industry for the country's mineral output such as nickel that can be processed into battery chemicals to be used in EVs.

Japanese automaker Toyota has committed to invest $2 billion in Indonesia over the next five years, part of which will be used to produce EVs, Industry Minister Airlangga Hartarto said.

A number of battery makers have also expressed an initial interest to build plants in Indonesia, a ministry official said.

Albar however said he has no timeline yet on when the company expects to start commercial rare earth production.

(Reporting by Fransiska Nangoy; editing by David Evans)

By Fransiska Nangoy