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tate miner PT Aneka Tambang (Antam) announced Thursday the appointment of a consortium to help the company acquire loans to build a ferronickel smelter in East Halmahera, North Maluku.

Antam said in a press statement that the consortium comprised Bank Mandiri, Bank Rakyat Indonesia, Mandiri Sekuritas, Goldman Sachs, Deutsche Bank, Sumitomo Mitsui Banking Corporation and Standard Chartered Bank.

“The [appointment] of the financial arranger marks the execution of our strategy to augment the
company’s value. The project is among our strategic projects to become an international mining-based corporation with healthy growth and world-class standards,” Antam president director Alwin Syah Lubis said.

The consortium would assist the company to source US$1 billion to finance the planned smelter, the statement read. The total project cost is estimated at $1.6 billion, including $600 million for a 260-megawatt power plant.

Antam said that depending on market conditions, it could issue bonds to help finance the project.

The company plans to begin work on the project by year-end. The smelter is expected to begin commercial operations at the end of 2014, with a total production capacity of 27,000 tons of nickel contained in ferronickel per year.

In March, Dahlan Iskan, the president director of state electricity monopoly PT PLN, announced that PLN would build the power plant to supply electricity to the smelter.

He said PLN would fund the project internally and sign an electricity purchase deal with Antam in November so construction could begin in 2012.

PLN reported that the electricity project would consist of a 10x17-megawatt diesel power plant and a 3x30-megawatt coal-fired power plant.

The 2009 Mineral and Coal Mining Law states that starting from 2014, all mining companies operating in Indonesia would be banned from exporting raw products.

To comply with the regulation, Antam plans to set up the Halmahera smelter and three others, as well as upgrade an existing one.

The planned smelters are a chemical-grade alumina smelter in Tayan, West Kalimantan, with construction estimated to cost $50 million; a smelter-grade alumina plant in Mempawah, West Kalimantan, worth $1 billion; and a nickel pig iron factory in Mandiodo, Southeast Sulawesi, worth between $350 million and $400 million.

Antam’s existing ferronickel smelter in Pomala, Southeast Sulawesi, will be upgraded at a cost of $450 million to $500 million.

Antam’s produced ferronickel production reached 4,643 tons of nickel last year, a 20 percent increase from 2009, while gold production reached 745 kilograms, 9 percent higher than 2009.

The company’s ferronickel sales volume rose 60 percent to 7,287 tons last year, while gold sales decreased 45 percent to 1,544 kilograms.

In June, the company paid out Rp 673.4 billion (US$79.4 million) — 40 percent of 2010 total profits — from net profits last year in shareholder dividends.