Antam plans Tayan bauxite operations

Antam plans Tayan bauxite operations

SINGAPORE (Dow Jones): Indonesia's PT Aneka Tambang, or Antam, expects bauxite production at its Tayan prospect to start in 2004 at one million wet metric tons a year, the company's spokesman, Cameron Tough, told Dow Jones Newswires Monday.

Apart from the bauxite mining, Antam expects to form a US$150 million joint venture with two other international companies to produce alumina at 300,000 tons/year for the Tayan project, Tough said.

Bauxite is raw material for alumina production. Aluminum is made from alumina.

Antam, a major Indonesian nickel producer, will hold 51% in the joint venture.

The Tayan prospect is in West Kalimantan, and the contract of work area covers 12,620 hectares.

Indonesia's Department of Mineral Resources and Energy has given preliminary approval to Antam's application for a Contract of Work, which means the company can seek foreign partnership, Tough said.

However, the identity of the two international partners can't be revealed until the Indonesian president gives a final endorsement for the Contract of Work application, he added.

The estimated mine life of Tayan is 100 years, according to Tough.

Alumina output will be for both export and domestic sales, he said. Antam expects an 18% return on investment.

Currently, Antam's Kijang mine on Bintan island is the company's sole operating bauxite mine, with three million wet metric tons of reserves left. The mine will be closed in two to three years, Tough said.

Antam's other bauxite deposit is at Kendagawangan, also in West Kalimantan.

In 2000, Antam sold 1.24 million wet metric tons of bauxite.

The Indonesian government owns 65% of Antam, while the remaining stake is free-floated on the Indonesian stock exchange.