Antam seeking more partners to back SGA project
Wednesday, March 25 2015 - 01:11 AM WIB
Antam corporate secretary Tri Hartono was quote as saying that the company needed to find further partners to jointly develop a smelter grade alumina(SGA) plant, although it has one partner already: PT Inalum, another state-owned company.
?Under the plan, Antam and Inalum will be the domestic majority shareholder in SGA with a stake of at least 51 percent. However, we will need a partner or partners with the technology and funding for SGA development,? Tri explained.
Potential partners come from various countries, including China, according to Tri.
The SGA plant is estimated to need US$1.7 billion in investment, a massive cost that Antam cannot afford alone, as the company?s finances have been straitened after a ban on mineral ore exports hurt its sales.
Recently, Antam obtained approval from the House of Representative to receive a capital injection of Rp 3.5 trillion from the government as the majority shareholder. However, the company needs more than the figure as its five development projects last year cost the company around Rp 40 trillion.
As of January last year, the government has banned exports of mineral ore as a consequence of the implementation of the 2009 Mining Law, which requires mining firms to process and refine minerals into end products before selling them overseas.
Previously, exports of nickel ore and bauxite accounted for 30 percent of Antam?s total sales.
In a recent development, the so-called team for the acceleration of smelter development, which was established last month by the Energy and Mineral Resources Ministry, opened a discourse as to whether the government should lift the ban on bauxite exports to help finance the construction of smelting plants.
Said Didu, the head of the team, argued that a number of aluminum smelter projects had been delayed as miners did not have enough funds to continue construction since they were no longer able to gain funds from selling bauxite.
However, the special dispensation will only be given to firms that have already made significant progress with their smelter development, according to Said. If they were allowed to export, he continued, they would be required to pay export taxes and provide surety bonds to ensure that all export pro-ceeds would be used for the construction of the smelters.
Meanwhile, Tri said that the removal of the export ban would help his company obtain additional funds but could also cause a drop in prices from increased supply in the country; any such fall in prices would be detrimental to the company.
Currently, there is only one smelter processing bauxite in operation,namely the chemical grade alumina (CGA) plant operated by PT Indonesia Chemical Alumina, which is a subsidiary of PT Aneka Tambang.
Four other smelters are also planned. However, progress has been slow.
?Most are still below 30 percent, meaning that they are still working with feasibility studies or environ-mental studies and have yet to make significant progress,? the Energy and Mineral Resources Ministry?s director for minerals,Edy Prasodjo, said on Tuesday. (*)