Locals want 50% of INCO's nickel concession

South Sulawesi governor Syahrul Yasin Limpo said PT International Nickel Indonesia (Inco) Tbk has to cut its concession area by 50%. 

"We have started to talk with INCO to rationalize 50% of its 118,000 hectares concession," Syahrul said this week. 

Why?

"Because the company has only developed 9,000 hectares in 30 years of operation, while so many investors have expressed their interest to open nickel mine in the same area," Syahrul argued.

Will it hurt investment climate?

"I don't think so. If INCO keeps controlling such a huge concession, opportunities for competition will be limited, while so many investors want to develop the area," Syahrul said.

Well, this is interesting. INCO got the concession from central government. If local administrations manage to get what they wanted, probably Papua provincial administration will follow: asking Freeport Indonesia to give out 50% of its gold and copper concession. How about East Kalimantan on Kaltim Prima Coal or South Kalimantan on Adaro Indonesia? Believe me, lots of investors want to get even 10% of their concessions. BUT...

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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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