Antam to build plant for stainless steel

IDX-listed miner PT Aneka Tambang (Antam) is looking to expand its business by building a plant to produce stainless steel, said the company?s president director, Tato Miraza.

Tato was quoted by The Jakarta Globe as saying Thursday that the expansion by Antam into stainless steel would complete its strategy for vertical integration, meaning that the company?s business lines would cover from mining all the way to producing finished products.

Tato refused to provide specifics in the plans, saying that the company already has a team to conduct a feasibility study.

Tato foresaw demand for stainless steel in Indonesia would increase in line with the increasing investment in manufacturing industry in the Southeast Asia?s largest economy. He particularly highlighted the opportunities presented from the country?s automotive industry. Stainless steel is made by a mixture of metals that include iron and nickel.

Antam produced 6 million metric tons of nickel ore in the first half, a 50 percent increase from the same January-June period a year earlier.

International Stainless Steel Forum estimated that per capita consumption of stainless steel in Indonesia was only 1 kilogram in 2010, while major nations like China and South Korea already surpassed the threshold of 25 kilograms a year.

Antam is already investing heavily to expand its presence in downstream industry. It is expanding its ferronickel plant in Pomalaa, Sulawesi, and is constructing another ferronickel plant in Halmahera, North Maluku, with both plants expected to start operations in 2015. Ferronickel is a cheap alternative to nickel?s derivative products.

The company said last week that its $490 million chemical-grade aluminum plant in Tayan, West Kalimantan, was almost complete and its operations will start at end of October, on track with its original target. (*)