State gold and nickel miner Aneka Tambang has started construction of a $450 million chemical-grade alumina plant in Tayan, West Kalimantan, corporate secretary Bimo Budi Satriyo said.
The plant, which will have a capacity of 300,000 tons of aluminum oxide per year, is a joint venture between Antam and Japanese chemical firm Showa Denko.
“The factory will process our bauxite reserves to produce 300,000 tons of CGA. It will add up to $200 million in annual revenue to our unit,” Bimo said.
Antam, which controls 80 percent of the joint venture, held a ground-breaking ceremony for the plant on Monday. Operations are expected to begin in 2014.
“The commodities will be exported to Japan and also to the domestic market. They can be used to produce abrasives, integrated circuits and LCD screen panels,” Bimo said.
Capital will come from internal funds from the two partners, he continued, as well as loans from the Japan Bank for International Cooperation and debt guarantees by the Japan Oil, Gas and Metals National Corporation.
Frederik Daniel Tanggela, an analyst from Sucorinvest Central Gani, said the new venture was a good sign as it was in line with the Antam’s long-term plan to diversify its business.
“In 2014, we may see a lot of growth in Antam as their projects start operating. Apart from the Tayan CGA factory, its $1.6 billion ferronickel plan is also expected to start in 2014,” he said.
Antam and state electricity utility Perusahaan Listrik Negara plan to build a ferronickel smelter and a 260 megawatt power plant in Halmahera, Maluku.
“It’s too early to say whether the Tayan factory will significantly boost the company’s performance. This is a completely new line of business for Antam,” Frederik said. “Antam’s strategy in the last couple of years has been successful. It has a good management and the right treatment for its projects, so I think diversification is a good move.”
Antam shares closed up 1 percent at Rp 2,400 on Monday.
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