Antam raises estimated costs of CGA project to $450

State-owned mining company PT Aneka Tambang (Antam) has raised the estimated costs of the company?s chemical grade alumina (CGA) plant to be built in Tayan, West Kalimantan by about 75 percent to US$450 million from the previous $255 due to surging steel prices, Kontan reported on Friday.

?The sharp increase in the estimated costs of the CGA project is caused by the rise in steel prices and construction costs,? Antam?s president director Alwin Syah Loebis.

He said that Antam was currently negotiating with a number of banks to get additional loans to cope with the cost of the alumina project.

The joint venture would provide 35 percent of the funds needed for the project, while the remaining 65 percent would be sourced from banks, he added.

CGA plant in Tayan planned to start construction this year and expected to begin commercial operation in 2011.

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

Tayan Alumina partnership had appointed Japanese firm Kawasaki Heavy Industries Ltd. as EPC contractor to build plant.

The plant would produce 300,000 tonnes per year CGA. Showa Denko will also act as offtaker of some of the plant?s out put and Marubeni will act as marketing agent. (*)