RI to export ferronickel to South Korea

RI to export ferronickel to South Korea

JAKARTA (JP): The state-owned general mining firm PT Aneka
Tambang clinched yesterday a five-year contract with Pohang Iron
& Steel Co. Ltd. of South Korea for the sale of 2,400 tons of
ferronickel a year.

The agreement was signed here yesterday by Aneka Tambang's
president, Darmoko Slamet, and the managing director of the
Seoul-based Pohang Iron, Koo-Sun Kang.

"The sales agreement, a five-year term, is very momentous for
our company, which has now doubled its annual ferronickel
production capacity to 11,000 tons from 5,500 tons," Darmoko
said.

He said the ferronickel price for the Korean company will be
based on market developments but Aneka Tambang expects to
generate an annual revenue of US$20.4 million per annum from the
new deal.

"Next month, we will sign another long-term sales contract
with giant steel producer Yieh United Co. of Taiwan for the sale
of 1,250 tons of ferronickel annually," he said, adding that his
company may also sign other contracts with a South African
company later this year.

Darmoko said his company's ferronickel business has good
prospects after the recovery of prices on the world market.

Nickel prices increased to an average of US$4.20 per pound
this month from $3 last year, he said.

Nickel prices even reached $4.46 per pound on Wednesday on the
London Metal Exchange, he added.

Nickel prices steadily declined from $6.27 per pound in 1988
to their lowest level of $1.83 in September 1993, due to a
worldwide economic recession and market oversupply after the
former Soviet Union entered the world market.

Expansion

Darmoko said that facing the robust market, the company,
currently operating two processing plants in Pomalaa of Southeast
Sulawesi, is now preparing the establishment of two other plants,
worth about $300 million, with a combined annual capacity of
11,000 tons, thereby doubling its total capacity to 22,000 tons
per year by the year 2000.

The new plants will be located in Pomalaa and on Gebe island,
Maluku, where the company operates a major nickel mine.

Darmoko said around 65 percent of his company's total revenues
stem from nickel and ferronickel exports.

Its nickel ore exports reached Rp 69.11 billion in 1992 and Rp
36.81 billion in the first nine months of 1993, while the
ferronickel exports were recorded at Rp 77 billion and Rp 40.06
billion.

Besides nickel, Aneka Tambang also produces gold, silver, iron
sand and bauxite.

Aneka Tambang's director of finance, Umar Tochfa, told The
Jakarta Post that the company's after-tax profit doubled to Rp 20
billion last year from Rp 10 billion in 1993, in spite of a
decline in its gold exports.

The gold exports of gold fell to Rp 17 billion last year from
Rp 29 billion in 1993.

Tochfa said that in an effort to strengthen its nickel
business, the company plans to sell part of its shares on the
domestic stock market before the end of this year.

"We will sell at least 30 percent of our shares" he said.
(fhp)