Antam has high hopes for gold production

The Jakarta Post, Jakarta

State mining firm PT Aneka Tambang (Antam) has forecast its gold production to increase by 6.6 percent this year, following the full operation of its gold mine after being disrupted by fire.

The publicly listed company also projected ferronickel production to soar higher by 33.3 percent this year after it completed the maintenance of its ferronickel factory, which has been closed since September.

Antam president director Dedy Aditya Sumanagara said gold production was expected to increase to about 4,000 kilograms this year from 3,750 kilograms last year.

"Our gold production is expected to run normally after the fire last year, which caused the company to miss its gold production target of 4,000 kilograms," said Dedy after a ceremony on Monday.

The Antam gold mine in Bogor, south of Jakarta, was closed for 10 days last March, after 13 illegal miners were trapped and died of asphyxiation inside the company's mining concession following a fire at one of illegal mines operated by the illegal miners.

Dedy said the higher gold production was expected to be supported with higher prices this year following an estimated decline in the value of the U.S. dollar. Global bullion price is usually higher when the greenback is valued lower, or when there is a large-scale war and security disturbances worldwide.

About 18 percent of Antam's revenue comes from gold sales. The larger chunk of the company's revenue comes from its nickel business.

Dedy said ferronickel production for this year was projected at about 10,000 tons higher than 7,500 tons last year.

Ferronickel is a raw material from which nickel is derived. Nickel is mostly used for stainless steel and for some automotive components.

Antam had previously said the average price for nickel contained in ferronickel was likely to stand at between US$4.50 and $5 per pound this year, down from the current average of $6.19 per pound last year, as metal brokers are expected to reduce speculation activities on the commodity.

The price of nickel skyrocketed to a record high last year, spurred by strong global demand, particularly from China, amid a limited supply following disruptions in the operations of a number of giant nickel producers.

Antam is 65 percent owned by the government and 35 percent by the investing public.

The company's shares ended lower by Rp 40 at Rp 1,740 on the Jakarta Stock Exchange on Monday.