Release: Antam: FeNi II smelting plant running normally following repairs

Jakarta, October 20th, 2005 ? PT Antam Tbk is pleased to announce the FeNi II smelting plant is running normally after the completion of extensive repair work that began after an unplanned shut down at the end of March 2005. Preheating of the smelter began on August 25th, 2005 and on September 2nd, 2005 the smelter was completely switched on. On October 3rd, 2005, Antam achieved the first tap of nickel metal and the smelter is currently running normally with a full load of 24 megawatts.

Antam?s President Director, D. Aditya Sumanagara, said, ?Inline with the successful commissioning of FeNi II plant, we expect to achieve our revised annual ferronickel production target of 7,400 tonnes.?

FeNi II was first shutdown for a routine full overhaul on September 14th, 2004. However, on March 23rd, 2005, at the end of the commissioning period of the refurbished FeNi II smelter, Antam switched off FeNi II for safety reasons due to abnormal metal levels and higher than normal temperatures.

An analysis indicated there was damage to the refractory bricks at the bottom of the furnace due to the overheating caused by the incorrect implementation of ramp-up procedures. As the refurbishment included the installation of a new, more advanced type of cooling system for the furnace sidewalls, the commissioning was performed under the supervision of the technical advisor on the project, Hatch Ltd of Canada.

Following the unplanned shutdown, Hatch Ltd was again retained, and with Antam, redrafted the refurbishment plan of FeNi II from the start up preparations until commissioning to ensure a successful return to commercial operations. Although the bricks used in the initial refurbishment were suitable and had been approved for installation, Antam has now installed more durable refractory bricks as an extra precaution in the event of a similar event occurring once again. During the start up preparations, Antam received expert assistance from Cerro Matoso SA/BHP Billiton. Cerro Matoso SA is a ferronickel producer which uses a similar copper cooling system as that installed at FeNi II.

The repairs cost Rp70 billion (US$7 million), including the airfreight cost, were higher than the initial estimate of $5 million. Antam decided to have the bricks delivered by airfreight, which is far more costly, in order shorten the down time. Antam has made a claim for a portion of the cost of repairs under the terms of its Erection All Risk insurance, which covers testing and commissioning. Antam expects total ferronickel production this year of 7,400 tonnes, including 600 tonnes via toll smelting with Pamco of Japan. (end of release)