Antam waiting for government approval to take over Inalum

State mining company PT Aneka Tambang (Antam) is still waiting for the government to decide if it will appoint Antam to take over the operation of PT Indonesia Asahan Aluminium (Inalum).

Inalum is a joint venture between the Indonesian government and Nippon Asahan Aluminum (NAA), which is a consortium of seven Japanese companies. “The government’s team, which is led by the industry minister and includes Antam officials, is still negotiating with the Japanese companies on the possible takeover of Inalum. We are still waiting for the results,” Antam president director Alwin Syah Loebis told The Jakarta Post on Tuesday. He said that the team would also decide which state company would take over Inalum.

Alwin said that Antam was ready for the appointment. “We have to wait before a decision is made before making more detailed preparations for financing related to the takeover,” he said.

Inalum was established under an agreement with the Japanese government in 1976. The Indonesian government has a 41.1 percent stake in the company and the Japanese consortium holds 58.9 percent. The government said it wants to exercise its option to take over Inalum after the contract expires in 2013. The government will have to acquire the Japanese consortium’s stake, which is estimated to be between US$700-800 million, to take over Inalum.

State-Owned Enterprises Minister Mustafa Abubakar said that if Antam was named to take over the operation of the smelting plant, it would be responsible for paying compensation to the Japanese consortium.

The Inalum plant, which was built in 1975 at Asahan, North Sumatra, has a production capacity up to 250,000 tons per year, 60 percent of which is exported to Japan.

Ministry secretary Said Didu said Tuesday that Antam was a suitable company to take over Inalum.

“The processing of materials at Antam is almost similar to Inalum, so it will easy for Antam to manage Inalum,” he added.

While waiting for the government’s decision, Antam will concentrate on its own projects such as a chemical grade aluminium project in Tayan, West Kalimantan, and a steam power plant [PLTU] in Pomala, Southeast Sulawesi, he said.

“We will focus on our project while we wait the decision on Inalum,” Alwin said.

On its website, Antam reported that it achieved Rp 604.3 billion ($67 million) in consolidated audited net profit in 2009, with profits having slumped by 56 percent from 2008 as nickel prices dropped due to the global economic downturn.