Antam expects better 2003 sales: Report

Indonesian state-owned nickel and gold producer PT Aneka Tambang (Antam) is expected to record higher sales this year than its management had predicted originally due to strong global prices of nickel and gold, according to Dow Jones.

Antam's President Dedi Aditya Sumanagara said Friday that global nickel and gold prices will likely continue to rise until 2006 before they start correcting.

"There will be an improvement in sales this year," Dedi said. But he declined to provide any exact figures.

The company registered sales of 1.43 trillion rupiah ($1=Rp8,500) in the January-September period, up from Rp1.13 trillion in the same period a year ago.

Dedi said the average price of nickel in ferronickel is expected to hit $3.9 a pound this year, above the company's initial projection of between $3.2 and $3.5. He predicted the average price of nickel in ferronickel will continue rising to above $4/lb by 2006, as demand is expected to remain to be higher than supply.

The dollar's global weakness, and rising geopolitical problems arising from the U.S.-led invasion in Iraq has pushed the gold price to over $400/troy ounce currently, he said. This will likely yield an average gold price of between $350-$400/troy ounce this year, above the company's initial expectations of $320, Dedi added.

"The prospects for gold prices are also very good," he noted.

To increase its reserves the company has been exploring for nickel mainly in Halmahera, and gold in West Java near its current gold mine in Pongkor. The company is also exploring for bauxite, alumina, and coal.

"But most of our exploration expenditures are allocated for nickel and gold," Dedi said.

Based on production levels in 2002, Antam has estimated reserves and resources to continue producing saprolitic nickel for 18 years, limonitic nickel for 50 years, gold and silver for 50 years, bauxite for 110 years and iron sands for 21 years. (*)