JAKARTA (TheInsderStories) - Indonesia state-run gold and nickel miner PT Aneka Tambang Tbk (IDX : ANTM) may get loan facility from China Develoment Bank (CDB) worth $1.5 billion to finance its Menpawah Smelter Grade Alumina project, State Enterprise Minister Rini Soemarno said.
The Minister said the loan from CDB to Antam is still under negotiation. The loan is part of planned huge loan to be extended by CDB to Indonesia’s state enterprises worth $50 billion. Of this amount, $3 billion has been extended to three state owned banks, namely to PT Bank Mandiri (Persero) Tbk., PT Bank Negara Indonesia (Persero) Tbk and PT Bank Rakyat Indonesia (Persero) Tbk.
The Menpawah SGA project is estimated to cost around $1.7 billion and expected to have an annual capacity of 1.6 million metric tons.
Antam is set to receive capital injection from government Rp3.5 trillion ($262.5 million) to partly finance its other two major projects, namely ferronickel and anode slime projects.
Earlier, Aneka Tambang and PT Asahan Aluminium (Inalum) have signed an agreement to set up a joint venture (JV) company to develop smelter grade alumina (SGA) project in Mempawah, West Kalimantan to boost the value of bauxite reserves in the country.
Antam and Inalum aimed to have around a 55 per cent stake in the new JV and now seeking new partners on the project. According to Teddy three investors from Russia, China and Middle East in the process bid on the project.
The SGA plant, once in operation, will help Antam boost value of its bauxite ores. Last year, Antam’s bauxite reserves hit around 1 billion metric tons and could supply the company’s need for over half a century.
Indonesia is currently the world’s fourth-largest bauxite producer with total production of around 30 million tons a year, trailing behind Australia, China and Brazil. Early 2014, the government imposed a new regulation prohibiting mining companies from exporting mineral ores while allowing exports for certain levels of mineral concentrates only if the companies committed to building smelters by 2017.
In related development, Aneka Tambang has secured approval from its shareholders on Wednesday (Oct 7) to launch rights issue aiming at generating funds worth Rp 5.38 trillion ($378.87 million).
Under the rights issue scheme, the company will offer 14.492 billion of new shares in which every holders of 310 old shares, registered in the list of shareholders, will get 471 new shares at price of Rp 371 per share.
Aneka Tambang President Director Teddy Badrujaman said large portion of the rights issue proceeds will be used to help fund the construction of the first phase of Ferronickel plant in East Halmahera, Maluku, including the construction of processing and refining facilities and supporting infrastructure.
The key shareholder, in this case the government will exercise its rights in accordance with the portion, in line with the Government Regulation No. 73 Year 2015 dated September 21, 2015 on State Capital Increase.
The first phase of the Ferronickel plant requires funds amounting to Rp3.5 trillion with a production capacity of 13,500 to 15,000 tons per year and expected to be completed in 2018. As of August 2015, the project contractor has completed the construction of supporting facilities such as camp sites, main office, port and jetty and water intake facility. The project progress represents 6% of total project.
The remaining portion of the rights issue proceeds will be used to finance the company’s working capital related to operations, including cost of goods sold and operating expenses, as well as business development costs related to increased production capacity.
The rights issue will be offered on Oct. 15-20, 2015, followed by distribution of Rights on Oct. 21.
Aneka Tambang is set to reduce this year’s capital expenditure to 1.72 trillion rupiah ($128 million) from the 2.3 trillion rupiah previously allocated.