Jakarta (TheInsiderStories)–Japanese manufacturer of chemical products Showa Denko has agreed to sell 20 percent shares of PT Indonesia Chemical Alumina (ICA) to Indonesia state-run diversified miner PT Aneka Tambang Tbk (IDX: ANTM) also known Antam.
The company now has 80 percent shares at the joint venture company. ICA owns Chemical Grade Alumina (CGA) plant in Tayan District, West Kalimantan.
Showa Denko said in a statement, the share transfer agreement has been concluded on May 29 and the share transfer will be executed on August 31, without mentioning the total value of the share transfer. Currently ICA has total capital of US$188.5 million.
Antam and Showa Denko started construction of the Tayan CGA facility in April 2011. The plant costed of $490 million in investment and was commercially operated in February 2015.
The CGA facility is designed to produce 300.000 tons of chemical grade alumina per annum, with raw materials from Antam’s bauxite reserves in Tayan.
CGA is a raw material used for functional and electronic components such as refractories, abrasives, building materials, integrated circuits and liquid-crystal display screens.
The company has temporarily stopped it’s operation. But, the two shareholders of ICA have agreed to restart the plant in accordance with the ratio of each company’s interest.
Showa Denko said that the company gas recorded about 10 billion Japanese yen as loss on investment and about6.7 billion yen as loss concerning the company suretyship obligation and loans to ICA.
President Director of Antam Prabowo Ariotedjo explained, that the transfer of the Showa Denko ‘s share in ICA is part of the thorough negotiation and evaluation between the two companies.
“Antam has solid commitment to optimize the operation of Tayan Chemical Alumina Grade,” he said in a statement to Indonesia Stock Exchange.
On April, the miner has received the renewal recommendation permit of mineral export for low grade nickel ore amounted to 2.7 million wet metric ton (wmt) and bauxite ore as much of 840 thousand wmt from the Ministry of Energy and Mineral Resources for the period of 2018-2019.
In 2017, ANTAM has obtained mineral export license of low grade nickel with total amount of 3.9 million wmt in which the export license of 2.7 million wmt was acquired in March 2017 and the rest license of 1.2 million wmt was obtained in October 2017.
Meanwhile the export licenses of washed bauxite export were granted in March 2017. In 2017, Antam recorded total low grade nickel ore export of 2.73 million wmt and washed bauxite ore export of 766 thousand wmt and aims to produce and sale 1.6 million wmt of bauxite in 2018.
Based on the MEMR decree No. 5 Year 2017 on Enhancement of Minerals’s Added Value through Domestic Mineral Processing & Refining Activity, Antam was categorized as the holder of Mining Business License for Nickel and Bauxite Operation Production which already has been owned and operated the domestic mineral processing and refinery facilities as well as conducted smelter development project.
Indonesia allowed limited exports of nickel ore and bauxite and concentrates of other minerals in 2017 January after the country had faced a hefty budget deficit and missed its 2016 revenue target by $17.6 billion. The government now allows export for up to five years and limited to volumes decided by the government and independent inspectors and only on specific grades.
The nickel ore exports realization in the first half of 2017 reached only 403,000 tons or 5 percent of the export quota of 8.16 million tons or 8 percent of world nickel production.
10 nickel smelters still operate with a total capacity of 1,468,596 tons per year while 13 other nickel smelters are still under construction with a total capacity plan of 1,853,000 per year.
This year, the MEMR is targeting four smelter developments. In the first half of 2017, two smelters have been completed and will be commissioned in September 2017. Both are PT COR Industries in Morowali and Bintang Smelter Indonesia in Konawe with a total capacity of 1.34 million tons.
Meanwhile, two other smelters expected to be completed this year are iron ore smelter PT Sumber Baja Prima with the capacity of 65.847 tons per year in Sukabumi and zinc smelter by PT Kobar Lamandau Industri in Central Kalimantan with the capacity of 60,000 tons per year.
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