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tate-run diversified miner Aneka Tambang (Antam) is allotting around Rp 2 trillion (US$144.2 million) for capital expenditure (capex) this year to finance its three priority projects, a senior official says, with a sum of the fund to come from the firm'€™s recent equity issuance.

The publicly listed company'€™s finance director, Dimas Wikan Pramudhito, said that this year'€™s capex would mostly be used for the miner'€™s three main projects: the smelter grade alumina (SGA) plant project in Mempawah, West Kalimantan; anode slime project and the ferronickel smelter project in East Halmahera, North Maluku.

'€œPart of the money will come from our rights issue, exclusively to finance the ferronickel smelter. We are currently looking for a third partner for the SGA project and it will determine the financing scheme for the project,'€ he told reporters.

'€œDepending on our needs, we will probably be looking for loans.'€

The company expenditure last year stood at around $200 million.

Antam generated Rp 5.37 trillion late last year from issuing 14.12 billion of new shares, part of the state-capital injection allotted by the State-Owned Enterprises Ministry for strategic infrastructure investments of state-run firms.

Proceeds from the equity offering will be used for Halmahera'€™s ferronickel smelter, which is expected to cost the company about $1.6 billion.

The smelter is designed to produce 27,000-30,000 tons of nickel in ferronickel (TNi), divided into two stages. The first stage of the smelter, as previously reported, is slated to finish construction in 2018, while the second stage was put on hold until the company secured sufficient financing.

Dimas said that for this year, only around Rp 400 billion from the rights issue proceeds would be used as capex, while the remainder of the funds would be gradually spent in the next year and the subsequent year.

Besides the Halmahera smelter, Dimas said that Antam would also prepare around $40 million in capital to finance construction of a facility in Gresik, East Java, that would turn anode slime into gold, which was expected to boost the firm'€™s gold production.

The third project to absorb this year'€™s capex was the SGA plant, which was expected to require $1.7 billion in investment and have an annual production capacity of 1.2 million metric tons of alumina. Antam is working with state-owned aluminum maker Indonesia Asahan Aluminium (Inalum) on the project, and has finalized the required feasibility studies.

Dimas said that Antam and Inalum were waiting for a third partner for the project to help cover the massive costs. A number of foreign firms have proposed to join the project, and Dimas said that the partner would be determined this year.

Antam reported a 55.59 percent increase year-on-year (yoy) in revenue to Rp 9.04 trillion during the first nine months of the year, but its net losses nearly doubled from Rp 590.37 billion to Rp 1.04 trillion on the back of rising costs and slumping gold prices. The company'€™s gold sales '€” its financial backbone '€” rose by around 129 percent to 12.65 tons.

Meanwhile, another state-run miner, coal producer Tambang Batubara Bukit Asam, announced in a recently-published statement that its coal production went up by 17.1 percent yoy to 19.17 million tons last year. The company reported that its sales increased by around 7 percent to 19.17 million tons, with 53 percent of the sales absorbed by the domestic market.