German bank to finance ferronickel project

JAKARTA (JP): Publicly listed state-owned mining company PT Aneka Tambang (Antam) confirmed on Wednesday Japan's Mitsui & Co. planned to construct the third unit of Antam's ferronickel plant in Pomalaa, Southeast Sulawesi, with loans from a German bank.

"The US$250 million project will go ahead now that the contractor has secured financing from a German bank," Antam president Deddy Aditya Sumanagara said, declining to identify the bank.

Japan's Export and Import Bank had been expected to finance the project, but negotiations became deadlocked when the Indonesian government refused to guarantee the loan.

Deddy said the bulk of the financing for the project would be put up by the German bank, with a small portion coming from Japanese creditors.

"We believe such an arrangement will be more profitable because of the appreciation of the yen," he said.

He also said his company was considering forming a cooperation with publicly listed PT International Nickel Indonesia to explore for nickel ore in Pomalaa.

"Nickel reserves in Pomalaa are potentially huge," he said.

The addition of the third ferronickel processing unit will more than double the company's output to 24,000 metric tons in 2001 from 11,000 tons at present.

Indonesia exports feronickel to South Korea, Taiwan, South Africa and a number of countries in Europe.

When discussing business diversification, Deddy said Antam was planning two new mining projects: the $60 million gold mining project in Halmahera, North Maluku, and the $25 million diamond mining venture in Kalimantan.

Antam also mines gold in several provinces, including West Java.(06)