Bank Mandiri ready to provide loans to Aneka Tambang

State-owned Bank Mandiri has expressed its full commitment to provide loans between US$75 million to $125 million state owned general mining company PT Aneka Tambang (Antam). The fund will be used to finance the construction of new ferronickel smelting plant Ferro Nickel (FeNi) III, which will cost the company about US$380 million.

Antam president director Dedy Aditya Sumanegara said in Jakarta on Monday that the new smelting plant which would be built by Tessag of Germany would receive funding from Germany?s IKB Hermes which has pledged to provide loans of between $350 million and 360 million for the project.

Besides, the German financial institution, Bank Mandiri has also committed to providing loans of about $75 million. "The rest of the funding will come from Antam?s own fund," he was quoted as saying by Koran Tempo.

If Hermes withdrew its commitment, Antam would raise up to $125 million from Bank Mandiri to finance the construction of the new smelting plant. In addition, Antam would also issue bonds worth $60 million to meet the fund requirement, he added. "Bank Mandiri has agreed with the plan" he said.

Hermes has assigned Price WaterhouseCoopers (PWC) to assess the smelting project. The assessment, which is now still underway, is expected to be completed by the end of this month (March).

FeNi III will double Antam?s total production capacity to 26,000 per year. The plant which will be located in Pomalaa, South East Sulawesi, is scheduled to start commercial production in 2005. (*)