Antam seeks financing for massive bauxite project

The Jakarta Post, Jakarta

State-owned mining company PT Aneka Tambang (Antam) said it would seek financing for its massive bauxite processing project in Tayan, West Kalimantan, next year after it completed negotiations with overseas partners to form a joint venture for the project.

"We expect to start seeking financing for the project next year after we sign a joint venture deal for the project with our partners," said Antam President Director Dedi Aditya Sumanagara during a meeting with the House of Representatives' energy and mining commission on Monday.

Dedy said that there were several companies from Japan that were potentially interested in forming a joint venture. However, he refused to disclose their names.

Publicly listed Antam has appointed investment bank Citigroup as its advisor to review possible options in financing the estimated $220-million project.

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

Dedy said that Antam was currently engaged in tough negotiations with the companies concerning the terms of the contract and sales agreement for the project.

"The joint venture is expected to consist of three companies, including ourselves, with a 40 percent share pattern for us. The agreement is scheduled to be completed by the end of this year, but remember that these agreements are complex affairs as they require the approval of all the shareholders," he said.

Antam shares ended Rp 25 lower at Rp 1,275 on the Jakarta Stock Exchange on Monday. Antam is 65 percent owned by the government, with the rest of the shares being held by the investing public.