EXCLUSIVE: Antam expects bauxite project to start production in 2003.

Publicly listed state general mining company PT Aneka Tambang said it expected its bauxite mining project in Tayan, Sanggau regency, West Kalimantan to start production in 2003.

"We have completed exploration and are now preparing feasibility study," company operation director Harsojo Dihardjo told Petromindo.Com in an interview on Thursday.

He said Antam had discovered 115.5 million tons of proven bauxite reserve, which would enable the company to extract 600,000 tons of ore to produce 300,000 tons of chemical grade alumina per year.

According to Harsojo, Antam is now in intensive negotiation with a foreign potential partner to form a joint venture to develop the Tayan project.

He explained that aside from having funds needed to develop the project, the potential partner also had the capability to market the projects' products. But he refused to name the company.

Once the deal was clinched, Antam would retain a minority interest in the project, he said.

Harsojo estimated investment for the construction of the mining facilities and processing plant at US$150 million.

According to company corporate secretary Dohar Siregar, Antam applied for a contract of work (COW) for the planned joint venture in November last year and the application is being studied by the government and the House of Representatives.

Antam, like other local mining companies, needs only the so-called Mining Contract (KP) to start a mining project. The KPs are issued by the government and do not need approval from the House.

But, under the existing regulation, the KP has to be changed into the contract of work (COW) once local mining firms want to form partnership with foreign investors. The government needs the House's approval to issue COWs. (Alex)