Antam seeks bank loan to finance SGA project in Jakarta

State mining company PT Aneka Tambang (Antam) says it is looking for around US$650 million in bank loans to finance part of the construction of a smelter-grade alumina (SGA) plant in Mempawah, West Kalimantan, Jakarta Post reported.

Antam president director Alwin Syah Lubis said in Jakarta on Thursday that the firm and partner Hangzhou Jinjiang of China would need at least $1 billion to finance the project, 65 percent of which would be funded externally, while 35 percent would come from internal funds.

“We are conducting a feasibility study and hope it can be completed by the end of the year. Hopefully, we can start to look for funding next year,” he said during a gathering to break the Ramadhan fast.

Alwin said the smelter would produce 1.2 million tons of alumina a year when complete.

Antam controls a 55 percent stake in the smelter project while Hangzhou holds 45 percent.

If the company could realize funding sometime next year then construction on the plant could begin in 2014, Alwin said.

The alumina from the plant has been earmarked for PT Indonesia Asahan Alumunium (Inalum) in North Sumatra, which will use it to make aluminum.

Alwin said that the planned smelter would become a strategic asset if the company proceeded with plans to take over PT Inalum, which needs upwards of 500,000 tons of alumina a year.

The government is set to take full control over Inalum and is expected to then float the company on the stock market or offer it to investors after the acquisition.

Industry Minister MS Hidayat recently said that the government would exercise its option to take over Inalum after the contract to operate the plant held by NAA, a consortium of 12 Japanese companies, expires in 2013.

The central government has a 41.12 percent stake in Inalum, while the consortium holds the remaining 58.88 percent.