Gulf expects speedy licensing process for Timor manganese smelter
Tuesday, June 23 2015 - 04:47 AM WIB
ASX-listed Gulf Manganese Corporation Limited said it has been advised that the licensing process time for its planned ferromanganese alloys smelter project in Timor has been substantially reduced as a result of the Indonesian Government's introduction of the Investment Coordination Board's (BKPM) "one stop shop" procedure.
The company said in a statement Monday that the Ministry of Industry, through the BKPM, has advised that the Industrial Business License (colloquially called an IUI) will take 20 ?25 days from application to be approved. Following the issue of the IUI the next step is to become a Registered Exporter (colloquially called an ET) which the Ministry advise will again take 20 ?25 days from application.
?Upon completion of these 2 licenses Gulf intends to commence the construction of the first furnace module with the plant expected to come online within 12 months of starting construction,? Gulf said.
To fall in line with the advised requirements of both the Ministry and BKPM Gulf has redrafted the Timor Smelter Study to comply with the "one stop shop" process.
The financial analysis of the redrafted Study shows that the project has the potential to return an EBITDA of US$374.7 million over a 10 year period supporting an estimated Net Present Value of US $ 160.6 million using an 8 percent discount factor.
The project requires a modest start up capital investment of US $66 million , which is staged over 5 years and provides estimated returns supporting an internal rate of return of 55.6 percent.
As described in the Study, Gulf will develop a fully integrated manganese business that provides the following value propositions:
? Sound project economics
? Operating costs at 80% industry average cost
? Highest quality ore supply (+50% Mn)
? Producing a premium manganese alloy (78%Mn)
? Established port and infrastructure
? Government full support, fiscal incentives of 10 year Tax Holiday
? Board/Management depth of manganese and Indonesian experience
? Global sales network
? Modest capital requirement
? Proposed Singapore listing
? Robust dividend policy with distribution of 50% of profits.
Editing by Reiner Simanjuntak