Antam Selects Partners for Pomalaa Power Plant

The Jakarta Globe, March 14, 2009

PT Aneka Tambang Tbk, Indonesia’s second-largest nickel producer, said it intended to develop a $300 million coal-fired plant in Pomalaa, Southeast Sulawesi Province, with a consortium including PT Nava Bharat Indonesia and PT Indika Energy Tbk.

The state-owned company said the development of the power plant was part of its strategy to reduce its ferronickel production cost. Antam, as the company is known, now uses a 102 megawatt hour diesel plant to supply electricity to its ferronickel smelters.

The joint venture — to be 20 percent owned by Antam and the rest by the consortium — will replace the diesel plant with two 75 MW coal-fired units.

Antam expects construction to begin at the end of 2010, with commercial operations starting in 2013. Hari Widjajanto, Antam’s senior manager for corporate strategic development, said that the company was considering coal mining acquisitions to support the plant.

In late January it was announced that Antam was eyeing six coal mining firms in East Kalimantan Province at an estimated cost of Rp 2.55 trillion ($214.2 million).

Bimo Satriyo, Antam’s corporate secretary, said that the acquisitions would come out of the company’s 2009 capital expenditure budget of Rp 3 trillion, which would be financed by internal cash flow.

The company said that despite the current downturn it intends to continue investing in mineral extraction and take majority stakes in 15 mining companies in the provinces of Papua and Jambi. It said that it would also work with local governments and private companies in Central Kalimantan Province to develop gold, coal and other mineral resources there.

Although rich in minerals, Central Kalimantan lacks the infrastructure required to support full-scale mining operations.

Antam’s unaudited net income fell 74.5 percent to Rp 1.31 trillion last year from Rp 5.13 trillion a year earlier. Sales dropped 21 percent to Rp 9.54 trillion from Rp 12.08 trillion. The net profit fall was partly driven by losses on short-term hedging contracts.