Antam to triple ferronickel output next year

State-owned diversified mining company PT Antam targets to triple its ferronickel production to around 21,000 tons next year and 26,000 tons in 2007 as the result of the full operation of its three ferronickel facilities in Pomalaa, Southeast Sulawesi, the company's president said in a Public Expose on Thursday.

Antam currently operates two smelters, FeNi I and FeNi II, with a combined capacity of 11,000 tons of ferronickel per year. Meanwhile, the third smelter, FeNi III, with an annual output of 15,000 tons is expected to commence operation in the first quarter of 2006.

Antam president Dedi Aditya Sumanegara, however, projected that Antam's ferronickel output would decline to 7,400 tons in 2005 from 7,945 tons last year following the shutdown and refurbishment of the FeNi II plant during March-October period.

Antam produced 4,001 tons of ferronickel in the first nine months of 2005.

Antam?s nickel division, which exports three kinds of nickel ore and ferronickel, accounts for 76 percent of the company?s revenues last year.

Dedi also said Antam's production unit cost was expected to drop to the range of US$3.50-$3.70 per pound next year from $4.00 per pound estimated for 2005 as the result of the commercial operation of the FeNi III.

Aside from the higher fuel prices, Antam?s unit costs have also risen due to the fact that old and inefficient ferronickel processing equipment is running below capacity. However, with the FeNi II now running and the FeNi III to come on stream in the months ahead, Antam?s equipment will be more efficient and consistent, Dedi said.

Antam's third smelter will use nickel ore feed from the firm's large nickel deposits in Buli, North Maluku and from a deposit adjacent to Pomalaa owned by PT Inco.

The FeNi III has secured long-term contracts to deliver about 8,000 tons of ferronickel to TKN in Europe and 7,000 tons to POSCO in Korea annually. (Robert)