Aneka Tambang plans to increase stake in PT Gag Nickel

Publicly listed mining company PT Aneka Tambang (Antam) has an option to increase its stake in PT Gag Nickel Indonesia from the current 25 percent to 45 percent until 2005 when the company?s massive nickel project in Gag island, Irian Jaya is expected to start production, Koran Tempo daily reported Saturday.

Antam?s Corporate Secretary Dohar Siregar said in Jakarta on Friday that the other 75 percent of PT Gag Nickel?s shares were held by Australian mining giant BHP.

According to Dohar, Antam would face no difficulties to finance the additional shares in the nickel company because as part of the deal signed with BHP, the purchase of additional shares in PT Gag Nickel could be financed from dividends that would be received by Antam from the company.

"When the new project starts operation, Antam will receive dividend. From this dividend, Antam will exercise its option to purchase the additional share," he said.

PT Gag Nickel has an estimated nickel deposit of about 240 million tons. The company ha spend about US$57 million to finance a feasibility study on the nickel project, which recently came into the spot light due to controversies related to the status of the company?s concession area.

PT Gag Nickel is one of 150 mining projects which occupies protected or conservation forests. The newly issued forestry law bans open-pit mining operation in protected or conservation forests. If not amended, these projects might be suspended.

Before finding a legal breakthrough, the government has found an inter-departmental team to determine the fate of the mining projects especially related to big projects such as PT Gag Nickel, PT Citra Palu Mineral, PT Weda Bay Mineral and Nusa Halmahera Mineral.(*)