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tate nickel producer PT Aneka Tambang (Antam) expects no sharp rebound in the near future in nickel prices, as the international market will still be oversupplied until the end of the year.

President director Alwinsyah Loebis said Wednesday the prices of the metal would be relatively stagnant at around US$6 per pound until the year-end, not far away from around $5.5 per pound currently.

"The current prices are actually higher than around $4 earlier this year, thanks to increased demand from China," Alwinsyah said, but adding that the higher demand from China would only be short-lived. He did not explain why.

If prices work out as forecast, this level of selling prices could spell trouble for the publicly listed mining company which has been hit hard by low prices since mid-last year.

The $6 per pound prices will be lower than the average prices of the metal in 2008, when prices stood at $9.9 per pound. Moreover the 2008 figure already represented a 37 percent decline from 2007.

Despite the relatively low nickel prices, Antam - Indonesia's second largest nickel producer -decided against revising its output target for this year, which has been set at 12,000 tons of nickel in anticipation of the continuing relatively weak global demand.

It is already much lower than last year's output, which had reached a more impressive 17,566 tons, according to its annual report.

During the first quarter of this year, Antam's net profits plunged 87 percent to Rp 90 billion ($8.73 million) on the back of lower nickel prices.

However, overall company sales rose 26 percent to Rp 2.64 trillion during the same period, thanks to an increase in gold and silver sales.

Sales of gold and silver contributed around 30 percent of the company's total revenue, with the domestic market accounting for 71 percent of Antam's revenue from these two metals.

Alwin said that the company might additionally increase gold production by between 800 kilograms and 1 ton this year, from PT Cibaliung Sumber Daya which it acquired in February for $80 million.

Before the acquisition, Antam produced 2.9 tons of gold from its only gold mine in Pongkor, West Java.

With production of and prices for nickel, Alwin said the company is embarking on cost-cutting measures to enable it to squeeze out profits amid tighter margins.

As of April, Alwin said, the company has managed to cut production costs by 28 percent to $4.69 per pound from $6.57 a pound last year, making it possible for the company to actually make a profit even if the prices remain at about $6 a pound.

Also, Antam remains committed to expansion with a feasibility study soon to be carried out on its plan to acquire five coal mining companies, which are all located in Kalimantan with total deposits of 10 million tons.

The company plans to use the coal as fuel to supply power stations to generate electricity.

Alwin refused to mention the value of the planned acquisitions, but did mention that the company might fund the acquisitions from a combination of internal and external resources.