Aneka Tambang names Tessag winner

Publicly listed state owned mining company PT Aneka Tambang, Tbk (Antam), said it picked Tessag AG over Japan's Mitsui & Co. to build a $163 million nickel plant, after the German company agreed to fund the construction.

It said the refinery will begin before June 2001. The new plant will more than double Antam's nickel processing capacity to 24,000 tons a year from 11,000 tons when the factory is completed in 2003. .

``Mitsui was a preferred bidder for the project but they had financing problems'' for this project, said Dohar Siregar, Antam's corporate secretary. ``So, Tessag won.''

Tessag is getting loans to finance about 70 percent of the project's worth from Deutsche Bank AG, Dohar said. The remaining 30 percent will be funded from Antam's initial share sale proceeds in 1997.

Tessag's borrowing has allowed Antam to move ahead and expand its business at a time when many Indonesian companies are struggling to raise funds.

Antam began selection of the plant's contractor in May. The plant will be built in the southeastern region of Sulawesi, one of Indonesia's eastern islands.

The cost of the project doesn't include about $50 million in insurance and financial charges for a 60-megawatt power plant that Antam will jointly build with Canada's Nation Energy Inc. and others.

Antam is counting on the new refinery to boost its earnings, as it already has orders of 15,000 tons a year after the new plant is completed, Dohar said.

The orders for nickel comes from South Korea's Pohang Iron & Steel Co., the world's biggest steelmaker, and ThyssenKrupp AG in Germany.

Antam's profit fell 25 percent to 225.19 billion rupiah in 1999. Indonesia's government plans to reduce its stake in Antam to 51 percent from two-thirds. (*)