PT Aneka Tambang (Antam) plans to expand its mineral resources business beyond nickel, which currently accounts for almost 90 percent of the company's revenues.

Depleting reserves at the company's existing nickel mines have prompted the company to look to other commodity sectors.

The company's latest data show that its nickel ore reserves and resources increased 8 percent to 394 million tons in 2007 from 364 million tons in 2006, with its proven and probable nickel reserves also up 8 percent in the period.

Antam's gold proven reserves and resources rose 5 percent to 3 million tons in 2007 from a year earlier, while bauxite declined 13 percent in the same period to 73 million tons.

The company has been left with little choice but to diversify.

To achieve that purpose, the company plans to initiate nine mining projects, according to president director Alwin Syah Loebis.

The projects will focus on iron ore and coal in addition to nickel, bauxite and gold.

Alwin said the company had begun the process of acquiring coal concessions to secure supply for its new power plants and for the company's business expansion into the coal sector.

Antam is also undertaking a project that could produce 300,000 tons per annum of sponge iron with a total investment of US$65 million. The iron will be supplied to PT Krakatau Steel, the country's largest steel maker.

To undertake these projects, Antam will partner a number of big mining companies, including the world's biggest miner BHP Billiton and Russia's biggest mining company Russal.

The company also seeks to expand its downstream business by establishing alumina and stainless steel processing plants.

"We want to be a firm that has an integrated mining service from upstream to downstream," Alwin said.

Antam is set to finalize a financial agreement with Japan-based lender the Japan Bank for International Cooperation to build a chemical grade alumina plant in Tayan, West Kalimantan.

The US$450-million plant is scheduled to start producing in 2012 with an initial output of 300,000 tons per year.

The acquisition of coal concessions is in part aimed at providing up to five million tons of coal for two power plants at the company's mining site in Pomalaa, Southeast Sulawesi, by 2012.

BNI Securities analyst Norico Gaman praised the company's plan to expand into the coal mining sector, saying it would help the company cut production costs and protect the company's profit margin from rising fuel costs.

"They also should think of massively expanding their gold and bauxite sectors, which has yet to be well-developed," he suggested. -- Ika Krismantari

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