Before 1890s, all mining operations in Kinta were financed by people in Penang, who advanced the tin-miners money with which to pay their coolies and smelt their ore. In return, the advancers were paid by the consignments of smelted tin-ore. But in 1890, a new development took place which entirely changed the system. In 1889, Mr. Muhlinghaus, a tin smelter from Singapore, set up the Straits Trading Company in Ipoh and several branches of it in Kinta, undertaking to buy the tin-ore direct and unsmelted from the tin miners in exchange for ready cash.
The initiative of Mr. Muhlinghaus brought immediate benefit to local producers, who were earlier depended on creditors to carry on their businesses. Moreover, the establishment of Straits Trading Company also solved the smelting problem of local towkays. In Kinta, the tin miners had been using ‘semut’ smelting furnace for years. This kind of furnace could only operate by using charcoal from valuable timbers. In 1888, the government had prohibited the use of ‘semut’ smelting furnace, as the government wanted to export the timbers. The problem of smelting without using the timbers gone as the Strait Trading Company ready to take the unsmelted tin-ore. The establishment of Strait Trading Company had contributed on growth of tin mining in Kinta and Ipoh itself.