Antam awaits approval on key project

Antam awaits approval on key project

The Jakarta Post, Jakarta

State-owned mining company PT Aneka Tambang (Antam) hopes the
government to approve its rights issue plan in a bid to raise
cash to help finance a bauxite mining project in Tayan, West
Kalimantan.

The estimated US$220 million project is intended to add the
value to the company's bauxite resources at the site. Currently,
Antam exports bauxite largely to Japan and China.

"To conduct a rights issue, we have to get the government's
approval as the controlling shareholder," Antam secretary Dohar
Siregar said on Friday.

Deputy of the Office of the State Minister of State
Enterprises Aloysius Ro confirmed that Antam, a publicly-listed
company, has proposed to the government to issue new shares to
raise funds.

With the project, Antam plans to produce chemical grade
alumina, which is used for various commercial and industrial
purposes including the manufacturing of ceramics, paint, spark
plugs, and toothpaste.

Dohar said that aside from the rights issue mechanism, Antam
was also preparing other financing alternatives, and is working
with international partners to determine the optimal financing
scheme for the project.

"The company expects to come to a final decision on the
financing scheme by the end of the first quarter of this year at
the latest," Dohar said.

The government still holds a 65 percent stake in the company,
while public investors own the remainder.

Last year, Antam enjoyed a 19 percent increase in sales on the
back of both rising sale volume and higher ferronickel and nickel
prices.

Sales surged to Rp 2.04 trillion (US$242 million) in 2003 from
Rp 1.71 trillion in 2002, with 85 percent of the revenues
obtained from exports.

The company is also in the middle of constructing its third
smelter at its nickel mine in Pomalaa, South Sulawesi, to
increase production to 15,000 tons from 11,000 tons per year. The
new smelter is expected to commence operation in early 2006.