Antam to Resume Nickel Output at Plant, Sees Higher Gold Sales

JAKARTA, Sept. 10 -- PT Aneka Tambang, Indonesia's second-biggest nickel producer, will resume output at one of its ferronickel plants next week as prices recover.

    Antam, as the Jakarta-based company is known, closed the Ferronickel 3 plant in the first half for maintenance amid low prices. The company cut its 2009 output forecast to 12,000 metric tons from last year's 17,566 tons because of the shutdown.

    "We'll switch on Ferronickel 3 on Sept. 16," President Director Alwin Syah Loebis told reporters in Jakarta late yesterday. "The plant will be in full operation in the middle of October."

    Nickel futures have gained 55 percent this year, erasing last year's decline, as metals demand recovers. Earnings from gold, which took over as Antam's main source of revenue in the first half of this year, will increase, Loebis said.

    Gold sales may surpass 10 tons this year on 2.8 tons output and purchases from other miners, exceeding its 9 tons sales target, he said. The company sold 9.79 tons on 2.83 tons output last year, previous earnings showed.

    Output may increase to 3.5 tons next year, with additions from the Cibaliung mine bought in July, Loebis said.

    Antam fell 2 percent to 2,475 rupiah at 11:27 a.m. in Jakarta trading. The shares have more than doubled this year, beating the 75 percent gain of the Jakarta Composite index.

    Revised Spending

    Gold accounted for 58 percent of Antam's sales in the first half, while the lower nickel output resulted in a 37 percent contribution.

    The company is also studying the costs of two projects after expenses swelled during the global financial crisis, Loebis said. A new spending plan may be completed by the end of this year, he said.

    Antam is building an alumina plant in Tayan in Kalimantan near its bauxite mine, and a coal-fired plant in Pomalaa in Sulawesi near its ferronickel smelters.

    "For Tayan, we earlier estimated the cost to be $250 million and in the financial crisis it swelled to more than $400 million," Loebis said. The Pomalaa plant was supposed to cost $300 million before the crisis, he said.

    Loebis also said Antam will allocate $30 million to buy coal-mining concession areas in Kalimantan. "The due diligence will be completed this year, and we see some coal mines with good prospects," he said.

    (Source: Bloomberg)