Antam allocates about $90 million for capital expenditure

Stated owned gold mine company PT Aneka Tambang (Antam) has allocated US$90 million or about Rp 820 billion in capital expenditure this year to finance mine expansion, a chemical grade alumina plant and routine spending.

Antam?s president director Dedi Aditya Sumanagara said in Jakarta Monday that part of the capital expenditure would be used to develop a bauxite mine in Tayan, South Kalimantan.

As part of the bauxite mine development, Antam will build a chemical grade alumina plant, Dedi said, adding that the construction of the plant would cost about US$240 million.

He said that Antam would allocate about $36 million from its own fund to finance the construction of the plant. ?The remaining $200 million will be provided by a Japanese bank and a number of local banks,? he said.

Based on the 2003 Bankable Feasibility Study (BFS) completed for Antam by Mizuho, the Tayan project will produce 300,000 tons of chemical grade alumina per year.

Antam expects construction to begin in late 2007 and commercial operations to begin in 2010 to process the vast, high quality bauxite reserves into chemical grade alumina, for sales under offtake agreement to Japan and other countries.

Antam?s share in this project is 49 percent with other three partners -- Showa Denko KK of Japan, Straits Trading Amalgamated Resources Private Limited of Singapore (STAR), and Marubeni Corporation of Japan -- own 30 percent, 15 percent and 6 percent, respectively. Antam has option to increase its ownership to 51 percent in the future.

Antam will also allocate between $20 million and $30 million for development of new projects, including acquisition of gold mines. ?Between $20 million and $30 million of the total capital expenditure will be used for routine spending,? he added. (*)