Sunday, March 24

Aneka tambang ups stake in Maluku mine


State-controlled miner Aneka Tambang will acquire a further 7.5 percent stake in local outfit Nusa Halmahera Minerals from Australian-based Newcrest Mining for up to $160 million. The two companies announced on Friday that they had reached an agreement on the purchase, Jakarta Globe Report.

Nusa Halmahera has the rights to the Gosowong gold mine, a 29,622-hectare concession area in North Halmahera district, North Maluku. The Gosowong mine currently contains some 6 million ounces of gold reserves.

Based on the agreement, Aneka Tambang, also known as Antam, will pay $130 million in cash and an additional $30 million should a further 1 million ounces of gold reserves be discovered prior to December 2017.

The agreement, subject to approval from the Energy and Mineral Resources Ministry and the Investment Coordinating Board (BKPM), will increase Antam’s stake in the local outfit to 25 percent.

In a statement, both companies claimed that the prospect “for future discoveries remains high” and stated their commitment to continue “significant ongoing investment” for exploration activities.

Executives from both companies spoke of a deepened relationship with the 18-year-old operation.

Antam’s president-director, Alwinsyah Lubis, said the acquisition will further enhance the miner’s portfolio, while hailing its “effective” working relationship with Newcrest Mining. “The Gosowong mine is an outstanding mine,” Alwinsyah said in the statement released in Jakarta on Friday.

Brett Fletcher, Newcrest’s executive general manager, said Antam’s acquisition will enable Newcrest to realize a return on its investment at a fair market value.

Antam has had a difficult time this year with commodities prices falling amid weakening demand. The situation was exacerbated by the government’s move to impose strict regulations and higher taxes to curb raw commodities exports in favor of value-added commodities.

Net income at Antam declined by almost 60 percent to Rp 627.8 billion in the first nine months of this year from the same period last year, while its revenue fell to Rp 7 trillion from Rp 7.8 trillion a year earlier, the company announced in October.

Revenue from gold was Rp 2.5 trillion in the first nine months of 2012, accounting for 36 percent of the miner’s total revenue. Ferronickel stood at Rp 2.2 trillion and contributed 31 percent of revenue, while nickel ore, at Rp 2 trillion, accounted for 28 percent.

However, despite the challenges of the current year and an uncertain future, Antam is determined to forge ahead in its push to build several smelting plants, Alwinsyah said.

Antam planned to allocate Rp 9 trillion for capital expenditure next year, as it has several capital-intensive projects in the pipeline, including a $450 million chemical-grade alumina plant in Tayan, West Kalimantan and a $1.6 billion ferronickel plant in East Halmahera, North Maluku.

Shares of Antam rose 0.8 percent to Rp 1,240 on the Indonesia Stock Exchange on Friday, compared with the 0.3 percent fall in the main stock gauge in the local bourse.