Aneka Tambang to spend $385m on expansion

JAKARTA (JP): Publicly listed state-owned mining firm PT Aneka Tambang has allocated Rp 2 trillion (US$385 million) for the expansion of its nickel plant in Pomalaa, Southeast Sulawesi.

The company's president, Dedy Aditya Sumanagara, said the company would develop three projects in Pomalaa within the next two years.

The three projects are the modernization of Pomalaa Nickel Plant II, the construction of Pomalaa Nickel Plant III and a geothermal power plant.

"The first project will cost $20 million, the Pomalaa Nickel Plant III about $235 million, and the power plant $130 million," Dedy was quoted by Antara as saying yesterday.

Nickel plant III is expected to have an annual production capacity of 12,000 tons of nickel, and the geothermal power plant will have an output capacity of 11 megawatts.

He said that construction was expected to start on all the projects in the second semester of 1998 and would be completed in 1999 and 2,000.

The modernization project is to be completed in early 1999, while nickel plant III and the power plant will be ready in 2000.

When nickel plant III is up and running in 2000, the company's combined production capacity will increase to 23,000 tons of nickel per annum, up from the current yearly capacity of 11,000 tons.

Dedy said the company would partially finance the expansion plan with funds raised in the initial public offer of shares this year.

The company offered 430.76 million shares to the public through the Jakarta and Surabaya stock exchanges, raising Rp 603.07 billion in fresh funds.

Dedy said earlier about 73 percent of the proceeds from the share offering would be used to develop nickel plant III, 9 percent to build the power plant and the rest to refinance the company's loans.

But he did not explain where the company would get the remaining Rp 2 trillion for the expansion plan.

Prices

Dedy said the current global nickel price was stable at $3.44 per pound in 1997, down from $3.66 in 1996.

He said the current nickel price level would not adversely affect the company's revenue this year or next year.

Sales from nickel accounted for 70 percent of the company's annual sales, gold for 20 percent, and the remaining 10 percent was generated from other minerals such as bauxite ore.

Aneka Tambang exports most of its products to Japan, Korea, Taiwan, China, Germany, Australia, Spain, India and the United States.

It posted a net profit of Rp 24 billion in the first half of this year, compared to Rp 22.6 billion in the corresponding period last year.

The company expects a net profit of Rp 69 billion this year, up from Rp 44.29 billion in 1996. (aly)