Antam speeds up construction of five smelting plants
Wednesday, May 23 2012 - 01:59 AM WIB
The five smelters include a chemical grade alumina smelting plant in Tayan, West Kalimantan, two ferronickel smelting plants in East Halmahera, Maluku and Pomala, Southeast Sulawesi, an alumina processing plant in Mempawah, West Kalimantan and a nickel pig iron plant in Mandiodo, Southeast Sulawesi.
The company however delayed its plan to build a ferronickel smelter in North Konawe, North Sulawesi due to a dispute over ownership of its nickel concessiona area with the local government.
Antam?s president director Alwin Syah Lubis said in Jakarta on Tuesday that the company would spend up to Rp 33.66 trillion (about US$3.6 billion) to build the five smelting plants.
?The smelting projects will be financed by internal funds and loans,? he said.
Alwin said that the progress of the projects has been encouraging. The US$450 million chemical grade alumina smelter in Tayan has for example entered a construction stage.
A consortium led by Japan Bank for International Corporation (JBIC) has agreed to provide 65 percent of the funds for the project .
?The remainders will be provided by shareholder of PT Indonesia Chemical Alumina,? he added.
The construction works have also begun at the US$1 billion ferronickel smelter in East Halmahera. Local and international banks have pledged to provide 65 percent of the funds for the project with the remaining funds to be provided by PT FeNi Haltim, a subsidiary of Antam. Alwin said that the alumina smelting plant in Mempawah and a nickel pig iron plant in Mandiodo were currently under feasibility studies. He is upbeat the two projects will be completed on schedules.
The construction of the smelting plants is part of Antam?s programs to comply with the new mining law under which beginning 2012, mining companies are banned from exporting unprocessed minerals. They should therefore build their own smelters or cooperate with smelting companies to process their production.
Export ban, however, has been effective for mining companies which have no contract plans on how to process their ores in 2014.
The ferronickel smelter in North Konawe project was earlier scheduled to begin in 2008 and to start operation in 2012, but Antam?s partner Jindal Stainless Limited withdrew from the project due to the land dispute. (*)