Antam to use Bank Mandiri loan to purchase KPC shares: Report

State-owned general mining firm PT Aneka Tambang Tbk (Antam) is planning to buy shares of East Kalimantan-based coalminer PT Kaltim Prima Coal (KPC) using a bank loan originally meant for building its third ferronickel plant in Southeast Sulawesi, Bisnis Indonesia daily reported Wednesday.

Antam would use a US$150 million credit facility from state-owned Bank Mandiri to acquire a 20 percent stake in KPC, the paper quoted an industry source as saying Tuesday. The bank is expected to disburse the loan in May.

The loan had been originally planned for the construction of Antam?s third ferronickel plant, FeNi III, in Pomalaa, Southeast Sulawesi.

Bisnis Indonesia could not reach Antam officials for comments.

A source at the State Ministry of State Enterprises said he was not aware that Antam would use Bank Mandiri loan to buy KPC shares. He stressed Antam must use the loan to build its ferronickel plant as originally planned.

The ferronickel project costs around $230 million, Antam officials said.

Meanwhile, state coalminer PT Tambang Batubara Bukit Asam (PTBA) and KPC are still in talks over the KPC share price. The former had been offered by the government to purchase a 20 percent stake in KPC.

KPC had set the price of the 20-percent stake at $164.4 million, but PTBA said it was too high.

PTBA and East Kalimantan?s companies had failed to meet a January 31, 2003 deadline to settle transactions on the KPC shares. The government and KPC had agreed to extend deadline for another six months.

Last year, KPC formally offered to the government 51 percent of its shares in accordance with its contractual obligations. The government then allocated 20 percent of the offered shares to PTBA and the remaining 31 percent to East Kalimantan provincial administration. (*)