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)