Antam puts off nickel project on delay in financial approval
Antam puts off nickel project on delay in financial approval
SINGAPORE (Dow Jones): Indonesia's major nickel producer PT
Aneka Tambang, or Antam, has postponed the construction of its
new ferronickel unit to next year due to a delay in financial
approval, Antam's officials told Dow Jones Newswires Friday.
This is the second time the construction has been postponed
since 1999. The new ferronickel unit is expected to be built in
Pomalaa, southeast Sulawesi.
Initially, construction of the new unit, at an estimated cost
of US$200 million, was scheduled to start mid-2001. Once
completed, the unit will lift Antam's capacity to 24,000 metric
tons per year from the current 11,000 tons.
The delay in financial approval is because of an inclusion of
a new nickel smelting technology, and the inclusion of new
marketing, technical and environmental studies that has delayed
the completion the project information memorandum, Antam
spokesman Cameron Tough said.
"The construction could proceed after the funding is in place,
possibly in early 2002," he said.
Hermes Kreditversicherungs AG, a German export-credit agency,
already expressed its support for the project, and final approval
is expected in October, corporate secretary Dohar Seregar said in
a separate interview.
"We have already received a letter of support from Hermes June
18," Seregar said.
After the final approval, it will take approximately three
months for financial closure and the credits could be withdrawn
then. The construction could start after that, Tough said.
The German export-credit agency is expected to guarantee loan
coverage for Germany's IKB Deutsche Industriebank AG.
Antam will fund 30 percent of the project on its own, while
the remaining will be debt financed, including a loan from
Germany's IKB Deutsche Industriebank.
Germany's Tessag Industries-Anlagen GmbH is the project's
engineering procurement and construction contractor.
The construction, which would take 28 months, is expected to
be completed in 2004, spokesman Tough said.
Antam's offtake agreements for its planned output from the new
unit with South Korea's Pohang Iron & Steel Co., or Posco, and
Germany's Krupp Thyssen Nirosta GmbH "are still valid," Tough
said.
Posco has agreed to take delivery of 7,000 tons a year of
Antam's output over a period of 10 years, from the start of
commissioning of the new plant. The German stainless steel
producer will take 8,000 tons/year for the same period.
Ferronickel is used in the production of stainless steel.
According to Tough, the new plant will use a new smelting
technology called the copper cooling smelting technology. The
technology will help improve the output capacity by allowing
throughput of higher grade ore.