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tate-owned mining firm PT Aneka Tambang (ANTM) may kick off construction of a ferronickel smelter later this year in East Halmahera, North Maluku, as the commodity'€™s global prices are improving.

Work on the US$1.6 billion smelter would begin sooner than previously expected, driven by a recent upward trend in global nickel prices, Antam president director Tato Miraza said on Tuesday.

The firm earlier aimed to kick off the project '€” which is set to produce 27,000 tons of ferronickel each year '€” next year, because of a prolonged drop in nickel prices resulting from sluggish worldwide demand.

'€œWe are discussing who we will team up with to build the smelter [...] We must seek a financing partner that suits our strategic partner,'€ Tato said after a meeting with Industry Minister MS Hidayat at the Industry Ministry.

Tato declined to elaborate about the partner.

The firm has already secured $650 million in syndicated loans from four banks: the country'€™s biggest lender by assets, PT Bank Mandiri (BMRI); PT Bank Rakyat Indonesia (BBRI); and foreign lenders Standard Chartered Bank and Sumitomo Mitsui Banking Corporation Ltd.

Antam will spend between 25 percent to 30 percent of the total investment on the early stage of the smelter'€™s development this year '€” apart from the $75 million it has used to build supporting infrastructure, including a jetty, since last year, Tato said.

The firm may spend another $200 million on increasing the smelter'€™s initial capacity to 40,000 tons per year, he added.

Antam, a mining firm with diversified outputs covering nickel, gold, bauxite and coal, is working on several multi-year expansion projects.

Among the projects are two refineries that will process bauxite into smelter grade alumina (SGA) in Tayan and Mempawah, West Kalimantan, as well as another ferronickel smelter in Pomalaa, Southeast Sulawesi.

Antam corporate secretary Tri Hartono said that the firm would commence the operation of its chemical grade alumina refinery in Tayan later this month.

The $490 million Tayan refinery was commissioned in October last year, he added.

'€œWe expect output to reach between 125,000 tons and 130,000 tons of alumina throughout this year as we begin commercial operations,'€ Tri said, adding that the capacity would be increased to 300,000 tons the following year.

Antam is drafting a joint venture agreement (JVA) for its Mempawah project, which is expected to kick off next year, according to Tato.

Investment for the Mempawah project is estimated to reach around $1.4 billion to $1.5 billion, with a production capacity of 1.2 million tons of alumina.

In addition, the firm is expecting to being operating its $573 million ferronickel smelter in Pomalaa by July or August next year, Tato said.

At present, the construction of the Pomalaa smelter has been 40 percent completed, he said.

Antam'€™s shares traded on the Indonesia Stock Exchange (IDX) at Rp 1,105 each (about 10 cents), down 1.78 percent from the previous day.