Update-Antam confirms FeNi III EPC award

State-run nickel and gold miner PT. Aneka Tambang Tbk. (Antam) confirmed on Saturday that it had awarded contract to construct its third ferronickel production plant (FeNi III) in Pomalaa, Sulawesi to Japan?s Mitsui Co. and Kawasaki Heavy Industry.

?Mitsui and Kawasaki had been awarded the EPC contract,? said Antam?s investor relations consultant Cameroon Tough. He said the contract did not include construction of power plant and said that the company now was in final stage to reach the deal on the power plant with an unidentified company.

Reports said that Antam was in negotiations with PT Pembangkit Jawa Bali (PJB), a subsidiary of public utility PT PLN, on prices of power that would be purchased by the mining company to support the new plant?s operation. Antam needs electricity supply of about 80 MW for the smelting plant.

Sources close to the deal the construction of the US$ 170 million FeNi III plant would commence later this year, with estimated construction time of 20 months.

Reports said that the plant is scheduled to commence production with annual production capacity of 15,000 tons starting early 2006. Combined with existing facilities the company?s total output capacity will increase to 26,000 tons.

Antam is planning to finance the expansion through $ 150 million bond issuance, which is seen to hit the market soon. (alex)