Antam considers new financing schemes for bauxite project

Tony Hotland Jakarta

After canceling a rights issue late last month, mining company PT Aneka Tambang (Antam) is considering other schemes to finance its bauxite mining project in Tayan, West Kalimantan.

"We're thinking of other alternatives such as selling non- productive assets like land and buildings, which have the potential to bring in up to US$10 million. We also have some kinds of reserves and their values are being calculated," Antam president director Dedi Aditya Soemanegara said after the company's shareholders meeting on Thursday.

He said that a rights issue would likely be the last option, considering that "it is not easy to conduct a rights issue".

Dedi added that the publicly listed company had appointed investment bank Citigroup as its advisor to review possible alternatives in financing the estimated $220 million project.

He also said that Antam was still in negotiations with a number of companies from Malaysia and Japan to become partners in the project.

"There are three companies including us and the share pattern is 40 percent for us, but we're open to new partners. The agreement is scheduled to be completed by the end of this year, but remember that such an agreement is complex because it requires approval from all shareholders," said Dedi.

Antam is also looking for long term contracts to buy the products from the project to assure revenues.

With the Tayan project, Antam plans to produce up to 300,000 tons of chemical grade alumna (CGA) per year. CGA is used for various commercial and industrial purposes such as the manufacturing of ceramics, paint, spark plugs, and toothpaste.

Meanwhile, Antam's shareholders agreed on Thursday to allocate 32 percent of the company's 2003 net profit -- or Rp 38.6 per share -- in dividends this year. The company booked a Rp 226.55 billion ($25.17 million) net profit in 2003.

Antam is 65 percent owned by the government and the remainder by the investing public. The House of Representatives is still discussing the government's plan to sell 14 percent of its shares in the second semester of this year.

The shareholders also installed Wisnu Askari Marantika as the company's new chief commissioner and Irwandi Arif as the company's independent commissioner.

"The mining business is getting tougher and we need new people to lead Antam to improve the corporate value and be quick in making decisions," said Roes Aryawijaya, a deputy of the Office of the State Minister of State Enterprises.

Antam's unaudited net profit during the first quarter of the year surged to Rp 147 billion, up 171 percent from the same period last year. The increase is attributed to higher commodity prices and increased ferronickel and nickel ore sales volumes.