Antam trying to materialize its US$1 billion nickel project by 2005
Tuesday, April 24 2001 - 06:30 AM WIB
State mining company PT Aneka Tambang (Antam) is working closely with its foreign partners, BHP of Australia and Falconbridge of Canada, to materialize a US$1 billion low-content nickel project in Gag island in Irian Jaya province by year 2005, Koran Tempo daily reported on Tuesday (April 24).
Antam corporate secretary Dohar Siregar told the daily on Monday that in a bid to raise Antam's nickel output, the company signed a cooperation agreement with BHP of Australia in 1998 to commence the nickel project in the Gag Island.
Antam owns 25 percent interests in the Gag island nickel project, while BHP controls 75 percent stake at the project. BHP promised to use advanced technology in the project, called Hydro Pressure Acid Ligine or HPAL.
However, BHP failed to implement the HPAL technology in the project, and this forced BHP to team up with Falconbridge to execute the project.
BHP offered Falconbridge half of its 75 percent interest in the project.
Falconbridge accepted the offer with several conditions; one of which was it insisted the problem of protected forest must be cleared first.
Dohar said both BHP and Falconbridge were committed to completing the project by 2005.
Dohar said, however, that the implementation of the project now faced new hurdles, namely from the new law on forestry, that banned any mining activities inside preserved forests.
"This now becomes a problem with us. But we are now working to solve this problem," Dohar said, adding that his party was discussing the matter with officials at the Ministry of Forestry.
He noted that the government must be able to find a win-win solution in the matter, considering that any cancellation to the project would give bad precedence to foreign investment in mining sector in Indonesia.
If the government, in this case the Ministry of Forestry, insisted to ban the Gag island project, Dohar said, the partnership among Antam, BHP and Falconbridge would automatically falter.
When that happens, he said, Antam would not be required to pay any compensation to the two foreign investors. But he warns that it would certainly destroy foreign investors' confidence on Indonesia because of the lack of legal certainty. (*)