ANTAM pulls out of Newmont divestment

West Nusa Tenggara (NTB) governor Zainul Majdi said state-owned mining company PT Aneka Tambang (ANTM) Tbk has pulled out from its participation in acquiring PT Newmont Nusa Tenggara (NNT) shares. 

Majdi said he met ANTM management this morning, where ANTM insisted on getting at least 50% of the 31% shares to be divested, pretty much similar with the statement of SOEs minister Mustafa Abubakar yesterday. But looks like local administrations managed to mount pressures in the past few hours. "Antam decided to drop the plan to participate in the acquisition of 14% shares scheduled for divestment in 2008 and 2009. As a result, all the shares will be purchased by local administration," Majdi claimed.

Yesterday, SOEs minister assigned ANTM to represent central government in the acquisition of 31% shares pursuant to a cabinet decision. Local administration has engaged with PT Multicapital, a JV between Bakrie, Bumi Resources, and Recapital Advisors, as exclusive partner in the acquisition of 10% shares scheduled for divestment in 2006 and 2007. The total consideration for shares to be divested in 2006-2009 is about US$890 million, while the remaining 7% is scheduled for divestment next year at undecided price.

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Antam nickel output drops 33%

State-owned mining company PT Aneka Tambang (ANTM) Tbk reported 33% drop in ferronickel output in the second quarter 2009 due to the production halt at FeNi III plant since May 2009. 

ANTM expects the plant to resume operation in September 2009. ANTM also reported 27% drop in high grade nickel ore to 913,206 WMT. During the quarter, ANTM reported 36% drop in nickel ore to 2.347 million wmt.Bauxite sales also dropped 74% to 87,800 tons. 

Gold sales, meanwhile, jumped 93% in second quarter compared to the previous quarter, but for the first half 2006, gold sales actually declined 36% from the same period last year. 

As a result, ANTM reported 16% decline in sales revenue to Rp4.396 trillion in H1 2009. Domestic sales of gold skyrocketed by 244% to Rp1.33 trillion in the period, and that had helped ANTM in fill the gap of falling revenue from nickel and bauxite. 

In contrast to its operational performance, ANTM stock price has surged 84% in the second quarter. 

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Sale of Cibaliung Gold project completed

Arch Exploration Limited (ARX) has completed the sale of Cibaliung gold project in Indonesia to PT Aneka Tambang (ANTM) Tbk. 

ARX, listed in Australia, told ASX today that it has also fully redeemed the outstanding $2,000,000 January 2010 Convertible Notes by effecting a cash payment of $221,117 and issuing 17,775,000 July 2012 Options exercisable at 2.5 cents to the Convertible Note holders.

The sale relieves ARX of its obligation to fund Cibaliung and to service the associated project debt obligations to the ANZ Bank. Additionally, the Company’s guarantee in respect of the project debt and associated security over the remaining assets of ARX have also been released, leaving ARX in a position to pursue its exploration objectives in Indonesia.

ANTM, ARX, and ANZ Bank signed a binding heads of agreement in February 2009 where ANTM agreed to acquire ARX's interest in PT Cibaliung Sumberdaya (CSD) for US$1 and ANZ Bank's interest in the project. Prior to the acquisition, ARX is the majority shareholder of CSD with 95% ownership and Antam holds the remaining 5%.

Cibaliung gold project has a mine life of six years with annual ore production of 220,000 tons and production of gold equivalent of around 70,00 oz, and estimated gold reserves of around 412,000 oz.

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China acquires Teck, Herald?

Teck Resources, a top producer of zinc, copper, and metallurgical coal, said last Friday that it will sell a 17.2% stake to China Investment Corp for US$1.5 billion. 

While CIC said that the acquisition is for investment purposes, this is clearly part of China's "go abroad" policy in acquiring resources to support its manufacturing industry. China is currently the largest importer of most metal ores, including zinc and copper. 

Last year, Zhongjin actually teamed up with PT Aneka Tambang (ANTM) Tbk to acquire Herald Resources (HER), Australian-listed company which controls zinc/lead concessions of PT Dairi Prima Mineral in North Sumatra. The consortium lost the battle to Indonesian PT Bumi Resources (BUMI) Tbk.

Herald has suspended ground works in Dairi project due to financial crisis and the fall of commodity prices. Last week, BUMI said it opens for a possible cooperation in developing the project.

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Antam refinancing

BCA & Bank Mandiri provide USD121 million to refinance PT Aneka Tambang (Antam) Tbk's bond issued in 2003. Antam issued USD200 million bond in 2003 to finance its FeNi III project. The new facility bears interest of SIBOR+1.5% (6.9%) with maturity in five years. BCA provides USD71 million and Mandiri at USD50 million.

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