Deutsche Industriebank supports Antam's Ferro-nickel project

IKB Deustche Industriebank of Germany has committed to providing funding supports for state mining company PT Aneka Tambang's (Antam) Ferro-nickel III project in Pomala, Sulawesi, with Tessag Ina GmbH of Germany as the project's engineering, procurement & construction (EPC) contractor.

Antam's Associate Investor Relations M Kartobi said Tessag as the winner in the project's tender had since the beginning partnered with Deustche Industriebank. The project itself would cost around US$220 million, including interest cost during construction. If the interest cost is excluded, the project value would be $168 million.

"Currently, they are conducting financial closure for the project and it will need around four to six months to complete," Kartobi said.

What needed to be discussed, according to Kartobi, would be the composition of funding between those provided by Antam and those provided by the German bank.

Kartobi noted that Antam's management had wanted to bear 30 percent of the total cost, while the remaining should go to the German bank.

In addition, Antam had also wanted Deustche Industriebank to cooperate with local banks in funding the project.

When financial matters for the projects have been clarified, the construction of the project would commence, expected to be in the second quarter of next year. The project is expected to start operation 28 months after the construction starts. When the Ferro-nickel III project is in full operation, it should boost the company's Ferro-nickel output by 100 percent.

Tessage won the project because of its strong financial support. There were four bidders for the projects, namely Ferrostaal AG of Germany, SNC Lavalin Inc of Germany, Mitsui & Co Ltd of Japan, and Tessag Ina Gmbh of Germany.

But then the first two bidders withdrew their bids, leaving only Mitsui and Tessag. Antam decided to take Mitsui as the preferred bidder, but Mitsui faced funding problems, that forced Antam to choose Tessag. (*)