Antam reports drop in Q2 ferronickel production

State nickel and gold miner PT. Aneka Tambang Tbk. reported on Monday its second quarter revenue decreased by 2 percent compared to last year?s same period to Rp.715 billion (US$=Rp.9,800) due to lower nickel sales volume.

The company said second quarter production of contained nickel in ferronickel down 40 percent to 1,404 tonnes due to unplanned shutdown of its FeNi II smelter in Pomalaa during the quarter. Antam expects FeNi II to recommence operations in September this year.

The shutdown has forced Antam to lower down production target by 27 percent from 10,150 tonnes to 7,400 tonnes this year. To offset the reduction, Antam plans to increase its high-grade nickel ore sales by 400,000 tonnes.

Due to lower production, Antam's second quarter ferronickel export was down by 19 percent to 939 tonnes, but revenue only dropped slightly by 1 percent due to higher ferronickel price. Average ferronickel selling rice during the quarter went up by 17 percent to US$7.27 per lb.

Antam also reported its high grade nickel ore production decreased by 33 percent to 598,000 wmt to due the closure of its Gebe mine. Antam is expected to open new nickel mine called Mornopo to replace Gebe by the second half of this year.The mine is expected to produce 300,000 tonnes and 100,000 tonnes of high grade and low grade nickel ore respectively in 2005.

Meanwhile, Antam reported that its gold production from Pongkor mine, West Java increased by 24 percent to 1,033 kgs during the quarter. During the quarter, Antam sold 1,151 kgs of gold with selling price of $425.37 per oz, 7 percent higher than last year. (alex)