Antam appoints Citigroup Tayan project financial advisor

State diversified mining company PT Antam Tbk announced Thursday it had appointed Citigroup Infrastructure and Energy Finance Team of Hong Kong as its corporate financial advisor in connection with the Tayan chemical grade alumina project in West Kalimantan.

Antam said in a statement that Citigroup, working with its Jakarta branch, would advise and assist Antam in evaluating the financial feasibility of the Tayan project by analyzing key elements of the proposed financing plan including the amount of debt, risk allocation, source of funds, cost of capital and currency mix.

Antam also said it was currently negotiating with its international partners to conclude a joint venture agreement in respect of the Tayan Project. ?Citigroup will advise and assist Antam with its negotiations and on the related financial and structural issues and their direct impact on Antam,? Antam said.

?In realizing this project, our aim in appointing Citigroup is to help develop a self-sustaining and robust project, which will provide Antam a healthy rate of value-added growth without inhibiting our debt service ability,? Antam?s president D. Aditya Sumanagara commented in the statement.

In partnership with international partners, Antam plans to develop a facility which will produce 300,000 tons of chemical grade alumina, which is used for various industrial purposes such as the manufacturing of ceramics, paint, toothpaste and sparkplugs.

On December 22, 2003, Mizuho completed the Bankable Feasibility Study for the Tayan Project. The Tayan Project is estimated to cost US$220 million, funded 65:35 debt-to-equity and may generate annual revenues of $150 million.

Currently Antam exports bauxite from its Kijang mine in South Sumatra to Japan and China. (Robert)