PT Aneka Tambang Tbk, the Indonesia’s largest listed gold miner, has appointed seven financial institutions to help it raise $1 billion, which it will use for the construction of a ferronickel smelter in eastern Indonesia.
The seven firms appointed to help the company raise the funds are Bank Mandiri, Mandiri Sekuritas, Goldman Sachs, Deutsche Bank, Standard Chartered, Sumitomo Mitsui Banking and Bank Negara Indonesia
The smelter is part of the company’s ferronickel expansion project in East Halmahera, North Maluku. It will support the government’s plan to boost economic growth and will comply with a regulation requiring miners to increase the quality of their product before shipping it overseas. The regulation takes effect in 2014. State power utility Perusahaan Listrik Negara will put up $600 million of its own funds for a power plant that will be part of the project.
Antam’s smelter will have an annual capacity of 27,000 metric tons of nickel. Construction on the project is expected to start by the end of the year and production is scheduled to begin at the end of 2014.
Nickel is used to make ferronickel, a material for processing into stainless steel. In the first half of this year, Antam produced 9,838 tons of nickel contained in ferronickel, up 3 percent from the same period in 2010.
Antam is also upgrading its ferronickel plant in Pomala, South Sulawesi, and is building an aluminum smelter in West Kalimantan. The miner will need $500 million for the Pomala plant, and $1 billion for the West Kalimantan plant. Antam hasn’t said how it would finance the two facilities.
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