German bank to finance ferronickel project

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)