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Ferronickel prices to rise 15 percent in 2010, Antam says
Given recovery in world demand, Indonesia’s state-owned mining company PT Aneka Tambang (Antam) expects average ferronickel prices to rise to at least US$15,000 per ton or higher by about 15 percent a year earlier
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iven recovery in world demand, Indonesia’s state-owned mining company PT Aneka Tambang (Antam) expects average ferronickel prices to rise to at least US$15,000 per ton or higher by about 15 percent a year earlier.
Antam’s president director Alwin Syah Loebis said that Antam’s average ferronickel price last year was
$13,000 per ton. “We expect it to improve this year,” he said last week.
Alwin quickly added that $15,000 per ton was a very modest estimate set by the company in its annual working plan.
“We set a very conservative figure. Actually, the ferronickel price has been above $23,000 per ton,” he said.
On Thursday last week, nickel on the London Metal Exchange gained as much as 0.8 percent rising to $25,185 a ton, the highest since May, 2008, Bloomberg reported.
Alwin refused to mention Antam’s revenue target for this year, but he said the company expected growth in revenue this year. “We are very optimistic this year,” he said.
Antam, which is the second biggest nickel producer in Southeast Asia after PT International Nickel Indonesia, expects to produce and sell more ferronickel this year.
The company plans to boost ferronickel production from 12,000 tons in 2009 to 18,500 tons in 2010.
As for the volume of ferronickel sales, the company expects to increase sales volume from 14,000 tons in 2009 to 19,000 tons in 2010.
The company booked net profit of Rp 604.3 billion in 2009, a decrease of 56 percent from a year earlier.
Antam’s sales revenue decreased by 9 percent to Rp 8.7 billion due to lower nickel prices and sales.
The revenue from ferronickel decreased in 2009 by 39 percent to Rp 2.15 billion.
In anticipation of the global economic crisis in 2009, Antam implemented an aggressive cost reduction program and including contract renegotiations to reduce costs.
“We were able to save more than Rp 220 billion from efficiency programs as well as contract renegotiation with suppliers,” Alwin said.
Antam also reported that the sales revenue from gold increased by 58 percent to Rp 4.31 trillion, making the commodity the biggest contributor to the company’s sales in 2009.
Antam said that gold demand and prices increased due to “decreased value of the US dollar and increased global insecurity”. Despite higher gold demand, Antam was unable to raise its gold production to take advantage of this given the constraints on underground gold mining at Pongkor mine.
Antam said it would increase its gold production from 2.6 tons in 2009 to 3 tons in 2010.
Antam’s total assets decreased by 3 percent during 2008 to Rp 9.94 trillion. In the same period, the company’s outstanding total liabilities also decreased by 18 percent to Rp 1.75 trillion.
