Weda Bay consortium to get $4.6b loans

PT Weda Bay Nickel, a consortium of state mining firm PT Aneka Tambang Tbk (Antam), Eramet SA of France and Mitsubishi Corporation of Japan, is close to securing US$4.6 billion loans to finance its nickel project in Weda Bay, Halmahera Island, North Maluku.

Muhammad Lutfi, Chairman of the Investment Coordinating Board (BKPM), said that the consortium is in the final stage of negotiating the loan. He refused to provide details about the lenders but said the Japan Bank for International Corporation would provide some of the funds.

The money will be used to develop supporting facilities for mining operation in the area, including a smelting plant and seaport.

Antam's President Director Alwin Syah Loebis, said the joint venture planned to start the construction of the smelting plant early next year.

?We hope Antam will be made the operator of the project,? he said.

Antam owns 10% of PT Weda Bay Nickel and has an option to raise its stake to 25%.

The Weda Bay nickel deposit is reportedly one of the largest undeveloped in the world, with measured, indicated and inferred nickel resources estimated at 5.1 million tons. The mine is said to be able to produce up to 65,000 tons of nickel annually. The consortium would use the hydrometallurgical process developed by Eramet at its research centre in France.

Eramet, which used to have 90 percent of the mine, sold 33 percent of its stake to Mitsubishi for $145 million in February this year.(*)