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After the final approval, it will take approximately three months for financial closure and the credits could be withdrawn then.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.