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Antam seeks $169m loan to finance alumina project
State mining firm PT Aneka Tambang (Antam) is seeking US$169 million bank loans to finance its chemical grade alumina project in Tayan, West Kalimantan, the company's president director has said
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tate mining firm PT Aneka Tambang (Antam) is seeking US$169 million bank loans to finance its chemical grade alumina project in Tayan, West Kalimantan, the company's president director has said.
"We have been in talks with JBIC *Japan Bank for International Corporation* and several commercial banks," Antam's president director Alwin Syah Loebis said last week.
The project aims at processing bauxite to alumina. Antam and its partners, Japanese companies Showa Denko and Marubeni Corp, have formed joint venture company PT Indonesia Chemical Alumina (PT ICA) to manage the project. Antam holds a 65 percent participating interest in PT ICA, while Showa Denko and Marubeni hold the remaining 35 percent.
The project needs as much as $400 million in investment. As Antam holds a 65 percent stake in the project, the company must contribute as much as 65 percent of the needed amount or $260 million.
Alwin confirmed that, up to 65 percent of the $260 million or $169 million would be financed by Antam through bank loans. "We expect to complete the financing process this year," he said.
PT ICA has selected a consortium of the Wika Group comprising PT Wijaya Karya, Tsukishima Kikai Co. Ltd. and PT Nusea to undertake the engineering, procurement, and construction (EPC) contract for the project.
"The construction is expected to start at the beginning of next year," Alwin said. Antam expects the project to begin commercial operations in 2014.
Aside from the alumina project, Antam is also preparing another bauxite processing facility in Mempawah, also in West Kalimantan. This project requires up to $900 million in investment. Antam will team up with China's Hangzhou Jinjiang Group. "We expect to sign the agreement soon," Alwin said.
He added that the two bauxite projects were part of Antam's effort to comply with the regulations under the new mining law ordering mining companies to refine ore before exporting it by 2014 at the latest.
"We expect that, by the time that producing raw ore is prohibited in 2014, we can start producing alumina from West Kalimantan," Alwin said.
Despite the two bauxite projects, Antam's main commodity production is still focused on nickel and gold. The company plans to boost its ferronickel production from 12,000 tons in 2009 to 18,500 tons in 2010. Antam also said it would increase its gold production from 2.6 tons in 2009 to 3 tons in 2010.
The Indonesian government holds 65 percent of Antam shares, while private investors hold the remaining 35 percent.
The company booked net profits of Rp 604.3 billion in 2009 and has agreed to pay as much as 40 percent of its net profits as dividends for its shareholders.
